A slice of the market

In a world of healthy options and better for you products, consumers are still taking the opportunity to indulge in ‘treat’ products. Biscuits and cakes are ideal for this, as well as fitting into the sharing element of treating.

== Biscuits ==

According to Mintel, sales of sweet biscuits stood at pound;1,462m in 2006, having achieved 2.2% growth on the previous year against a prevailing trend of healthy eating. However, sales of everyday biscuits have stagnated, and chocolate biscuits and children’s biscuits are showing signs of decline. A declining child population and increasing regulation on food marketing and sales to children are starting to take their toll.

Seasonal biscuits have rallied, largely due to the trend for indulgent purchases. Nevertheless, the market is adapting and innovations have mainly been in healthier and premium products. Innovations have included new products with naturally healthy ingredients, reformulations of existing favourites to reduce salt/fat and on-pack health and nutrition messages.

Anna Cornelius, category development manager of Ryvita, says: “The biscuit market is in slight growth driven by healthier biscuits, seasonal treats and special assortments. It is likely that healthier options will continue to grow as the demand for healthy indulgence continues.

“2007 has been an extremely exciting year for Ryvita so far with some great new products introduced starting with Muesli Crunch, a sweet Crispbread, in January and adding a fourth variant, cherry, to the Goodness Bar range.

“This was followed by the Ryvita Goodness Bar Luxury range in June which is packed with fruit and nuts, but with just 111 calories and less than 7% fat, offers an indulgent tasty healthier alternative to other cereal bar and confectionery items.”

Awareness of health is a significant issue and Nielsen says that 41% of people surveyed, claim to monitor fat on a daily basis. Ryvita says that 68% of consumers prefer foods that are natural.

Cornelius says: “The wholesale channel is extremely important to Ryvita, because it is a vital route to market for the independent trade. We are working to increase the provision of healthy snacks to this channel, which would drive sales further. We are delighted that sales and distribution are exceeding expectations across the Ryvita portfolio, with the growth of healthier snacking products such as Ryvita Minis and Ryvita Goodness Bars driving incremental sales.”

David Roberts, national account manager of Furniss Biscuits, says: “The focus in the biscuits category at the moment is on premium products and consumers are in a position where they are prepared to pay a little more for better quality. Whatever the food category, consumers are looking for reassurance about the provenance of the ingredients and this is becoming the main driver for purchase.

At Furniss we have a commitment to use only quality ingredients in our biscuits and use as many local and natural products from Cornwall as possible. Increasingly consumers are also looking for food that doesn’t have a large carbon footprint and that has been sourced locally. In terms of health, consumers are increasingly aware of what they are eating. We make our ingredient content as transparent as possible and minimise the use of artificial additives in our products and have recently removed hydrogenated fats from all of our biscuits.”

The wholesale channel is approximately 60% of Furness’s business on a regional and national level and its products are performing well, says Roberts. He stresses the importance of point of sale and merchandising and says it is something Furniss takes very seriously. “Furniss representatives regularly visit branches to ensure that the range is displayed correctly and to its best advantage in order to maximise in-branch opportunities. As part of this we have found in-branch sampling a useful tool to promote the range. Other tactics that we find particularly effective are mail outs to the customers of wholesalers, including Furniss literature and samples to let them know more about the range, what’s available to them and any promotional offers that we are running.”

Sue Garfitt, category controller of Burton’s Foods, says: “Burton’s Foods has spurred market growth by investing in new product development within the sweet biscuit category and innovating in new areas to meet growing consumer demand for health and indulgence. Biscuits are ideally placed to meet the growing consumer preference for snacking, however there is a clear polarisation between the health and indulgence sectors. At Burton’s Foods we are continually innovating to ensure we meet changing consumer needs.”

Garfitt advises wholesalers to stock a variety of biscuits and give an appropriate amount of space to each. She adds that stocking best selling lines, avoiding duplication and using price-marked packs are key drivers.

Garfitt comments: “There are a wide variety of biscuit brands available, and it is tempting to cram as many as you can onto the shelf at the expense of offering genuine choice. But the benefit of stocking two different brands of choc chip cookies is limited compared with the benefit of stocking both Maryland Choc Chip Cookies and Cadbury Fingers for example, which meet different shoppers needs – one is in ‘biscuit barrel’ and the other is in ‘something special’.

“Stocking the best-selling brands in each segment makes the category easier to shop as the brands act as signposts for the segment. Make the fixture easy to shop by merchandising biscuits within the same segment together, having KitKat next to Twix for example.”

According to Bahlsen, the trends of health, convenience and indulgence that can be seen throughout the grocery trade are also driving the biscuit category, with the total market now worth in excess of pound;1.8bn.

Layne Chisholm, trading sector manager of Bahlsen, says: “Chocolate biscuit bars will continue to struggle as the healthier sector establishes itself as the largest in value terms. However, this doesn’t mean that we will see a decrease in sales of premium products, since the special treat sub-category is seeing growth as fast, if not faster than the healthier sector.”

Bahlsen has recently launched Dip It!, in Milk Crispies and Choco Choc Chip variants. The oval shaped biscuit is designed to make dunking quick and easy, even in narrow-rimmed mugs, beakers and glasses.

Chisholm says that Bahlsen’s wholesale business has grown by 42% over the last three years and now represents just under 15% of its branded turnover.

“We work very closely with all wholesalers, where we block merchandise our products into ‘Bahlsen Blue’ bays. We do realise that depot and store compliance may be difficult because of the sheer number of biscuits SKUs on offer. That is why we have a team of dedicated field marketers to advise the trade on merchandising, POS placement, new product information, stock replenishment, category and range reviews, and planogram implementation. This has resulted in driving sales on all brands, not just household names.”

According to United Biscuits UK, McVitie’s is the UK’s number one biscuit brand and is currently worth pound;192m at retail sales value and its core brands are bought by 83% of UK households. Mark Sugden, customer market director of UBUK, says: “McVitie’s has a strong portfolio of impulse snacks but the case format and size was restricting its maximum potential. Nearly 50% of shopper missions are eat-now, but only 15% of sales are eat-now. Convenience continues to be a key consumer trend and the new McVitie’s formats are more convenient for the retailer and the consumer. We expect this new activity to drive 30% growth across biscuits.”

According to UBUK, McVitie’s Chocolate Digestives account for almost one third of the everyday treat segment, which is worth pound;255m. To build on this UBUK has launched McVitie’s Yog Fruit Digestives, which contain real pieces of fruit and have a taste of yogurt. They are available in both Strawberry and Forest Fruits and will be backed with a pound;1.2m marketing campaign.

Jessica Wylie, trade PR communications manager of UBUK, says: “New McVitie’s Yog Fruit Digestives contain all the goodness of wholemeal and wheat, as well as the great taste of yogurt and fruit, so consumers can enjoy a wholesome biscuit treat. On the back of the growing popularity of yogurt, new Yog Fruit Digestives will drive trial with consumers, adding incremental sales to the category.”

McVitie’s is also supporting the forthcoming Rugby World Cup with an on-pack promotion running across Jaffa Cakes. The promotion features a text to win mechanic offering a top prize of pound;100,000.

According to BakeMark, shortbread is the fastest growing sweet treat in out of home consumption, with 50.2% growth in coffee shop sales in the last 12 months, a total of 49 million meal occasions.

BakeMark offers macaroons in chocolate chip or cherry, triple chocolate shortbread and ready to bake fruit flapjacks. The flapjacks contain cranberries, sunflower seeds and oats, designed to offer a better for you snack.

== Cakes ==

According to Mintel, the UK ambient cake market comprises three main segments; whole cakes, occasion cakes and individual cakes. Sales increased by 11% from 2001 to reach a value of pound;1.47bn by 2005. In order to progress, suppliers have had to develop products to deal with current eating trends that have shifted away from the role of cake as a teatime treat of celebratory indulgence.

According to Anthony Alan Foods, which produces the Weight Watchers range of cakes under license, the low fat cake sector is showing healthy growth. The sales figures for the sector show solid growth of 6.9% in value over the 12 weeks to 22 April 2007, with Weight Watchers sales showing growth of 15.3% over the same period.

Sarah Morgan, marketing director of Anthony Alan Foods, says: “In the total cake market, sales values are rising faster than volumes, suggesting that premium cakes are proving popular. That’s great news for Weight Watchers, which is perceived as a premium brand within the low fat sector. It now accounts for over 58% of low fat cake sales in the UK, compared to 53% two years ago. As the premium brand, Weight Watchers continues to drive the low fat cakes sector. Strong marketing support, for both the retail range and the Weight Watchers meetings network, has fuelled the growth of the cake range.”

The Weight Watchers range includes American-Style Mini-Muffins, Caramel Cake Bars, Caramel Shortcake, Chocolate Mini Rolls and Almond Cake Slices, and new products are in development for launch in January 2008.

Mintel says another approach taken to deal with the impact of healthy eating has been to position cake as an indulgent treat rather than an everyday product. This has been aided by the development of premium cakes with higher-quality ingredients, encouraging consumers to trade up in their indulgences.

Andrew Ely, managing director of Almondy, says: “The frozen cake category has evolved massively in recent years. Almondy has looked to bring not only delicious new premium products to the category but also re-start growth in the UK.

Ely says that building on current awareness and education is key, and end users need to be informed and made aware that frozen cakes no longer mean losing out to quality or taste, and it is essential for this to be promoted by wholesalers.

“The wholesale channel is crucial to Almondy and is a fundamental part of our business. We have a dedicated and committed team who work closely with wholesale and cash and carry operators as they are a valuable link between Almondy and the end user and in ensuring the range offered is suitable for their customers.”


=== Buyer’s viewpoint ===

We are in growth overall as we have increased our range through the depot versus direct deliveries to stores.

It is difficult to tell whether there are any significant trends or NPD in the category with the integration of new “core range” lines.

Mr Kipling and Cadburys are doing the best while McVitie’s (UBUK) is currently giving the best supplier support.

From suppliers we look for support in driving the sales through the depot and with that through the stores with competitive pricing. Also decent shelf life on delivery into depot so we can pass on the best dates to our customers.

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