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'Traditional biscuit-barrel, tea-time occasions have gone'

07 April 2010

During the current economic climate, with limited options in terms of increasing the value of sales in the market, suppliers of biscuits and cakes have focused on revamping established brands and extending them with new recipes and formats, rather than introducing new names in a relatively high-risk environment.

In Biscuits & Cakes, a new Market Report Plus, market intelligence provider Key Note examines the impact of the recession on the UK market for biscuits and ambient cakes, and looks at the effect that snacking, eating ‘on-the-go’ and other trends will continue to have in the coming years.

Snacking and ‘on-the-go’ eating have remained significant influences. One category that has seen activity in both the biscuits and cakes sectors is miniature products. These products effectively target demand for: smaller portions; sharing; healthier eating; and ‘on-the-go’ consumption.

Miniature products are positioned to compete more directly with confectionery, and some convergence with this sector is occurring as more biscuit and cake brands are sold through impulse outlets, which have traditionally been dominated by confectionery.

The portability and portioned nature of these formats also persuades consumers to view products in the confectionery and biscuit/cakes categories interchangeably. There has also been expansion in ‘sharing’ packs of miniature products, targeting occasions such as the ‘big night in’.

Healthier products account for a large share of sales and there has been further innovation in this sector, with new products introduced under brands such as Go Ahead! and WeightWatchers. Some regular products have also been given healthier recipes through the removal of artificial additives or the substitution of particular ingredients with more wholesome alternatives.

In 2010, the Food Standards Agency (FSA) will report the conclusions of its consultation on saturated fats in confectionery, cakes and biscuits. The proposed voluntary cutback of 10% across the board has cost implications for suppliers but none will want to be left behind if competitors are pro-active on the issue. United Biscuits has already gone ahead with the reformulation of selected products.

Key Note expects that consumer interest in healthier eating will be balanced by the trend towards indulgence. Cakes, especially, can often be purchased specifically for the premium nature of their ingredients and recipes. The key issue for suppliers is to know their market and their brands: some will choose more streamlined healthy recipes and some will not. However, there may be some combination of the health and indulgence trends – for example, through concepts such as ‘wholesomeness’ in ingredients and quality.

The snacking and eating ‘on-the-go’ markets are both signposted by biscuit and cake suppliers for future development and growth. According to Burton’s Foods, while 50% of confectionery and 80% of bagged snacks are eaten out of the home, this drops to 38% for biscuits, indicating considerable potential for development. The move towards new packaging and new products will allow biscuits and cakes to address different consumers.

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