Naughty but nice

Consumers in the UK want to have their cake and eat it. They want indulgent and gooey, but they also want low fat and healthy. And what consumers want they usually get, so in the cakes market growth is being seen in both the indulgent and better for you categories. The same is true in biscuits. Indeed United Biscuits UK (UBUK), which has a presence in both markets, has identified three mega trends in these markets: healthier, pleasure, and making life easier.

That’s all very well, but where do you start when you are the wholesaler to a small independent retailer with extremely limited shelf space? Put simply you start with the big brands, and the big manufacturers are making the lives of cash and carry and wholesaler depot managers easier by tailoring ranges that will sell, thanks to the use of price-marking.

UBUK says it is committed to delivering its top selling brands at the best possible value to independent retailers, which is why it is launching a new range of price-marked packs. The idea is to give independents a range of best sellers at competitive prices. The featured packs are Jacob’s Cream Crackers, 300g at 69p; TUC Original, 150g at 89p; TUC Sandwich, 150g at 89p; Cheddars, 150g at 89p; and Ritz, 200g at 89p. Jacob’s Cream Crackers was the best selling savoury biscuit/cracker in the UK last year according to ACNielsen, followed by Cheddars.

Fox’s too is making a concerted effort to support the independent trade, again with price-marked packs. Five of the company’s best selling chocolate biscuit bar lines are available price-marked at 99p: Rocky Chocolate, Rocky Caramel and Classic, all in packs of eight; and Echo Chocolate and Echo Mint Crisp, in packs of six.

In addition, case sizes have been reduced from 12s to 8s and take the form of shelf-ready outers for easier merchandising.

What is more Rocky, which is the nation’s fourth best-selling chocolate biscuit bar with sales worth pound;27m, will be supported by a TV campaign in May and again in the back-to-school period in September. And Echo, which is currently enjoying 20% year on year growth, will be promoted by a press campaign in the national women’s press.

Tony Coe, national account manager for Fox’s Biscuits, comments: nbsp;”All these measures have been designed to give independents a real chance to compete in the chocolate biscuit bar arena. nbsp;Not only can retailers sell our brands with good margins with the price-marked packs but we have tried to find the best way to reduce their capital outlay by reducing the cost per case.”

Just like any other FMCG market, launches and relaunches are rife in the cakes and biscuits category.

McVitie’s Jaffa Cakes, for example, is the subject of a relaunch. UBUK describes the product as an “everyday treat”. It says that Jaffa Cakes can be consumed every day because each one contains less than 1g of fat – a message that is now clearly visible on the redesigned pack.

The brand’s limited edition Berry Blast variety was such a success when it was available last year, that UBUK has decided to introduce a permanent blackberry variety to the range, as well as a lemon and lime one.

The launch will be backed by a pound;2m spend including new TV advertising and an outdoor national poster campaign.

UBUK has certainly been busy – its McVitie’s Cake Company is launching two new whole cakes: McVitie’s Farmhouse Fruit Cake and McVitie’s Carrot Cake, plus it is relaunching Penguin Cake Bars in a 5-pack format.

And perhaps because of all the competition in the better for you category, UBUK is investing pound;3m in the relaunch of Go Ahead!, with a new logo and packaging redesign. The new design places emphasis on the lower fat and lower calorie messages. At the same time, Yogurt Breaks, gets a new strawberry variant, which contains less than 2g of fat per biscuit.

Meanwhile over at Manor Bakeries, Mr Kipling’s “exceedingly good” cakes have just got better for health-conscious consumers thanks to the launch of the Delightful range, which contain less fat than standard lines.

Emma Chamberlain, head of marketing at Manor Bakeries, reckons the new cakes will fill a big gap in the market – for those consumers who’d like to eat cakes but think they are too fattening. At launch, there are four Delightful variants: Apple Slice, Lemon Slice, Chocolate Slice and Cherry Bakewell. Recommended retail price is pound;1.09.

Own label has a strong presence in cakes and biscuits, thanks in part to the continuing success of Inter Link Foods. This is a company that’s grown in leaps and bounds due to a string of acquisitions. It recently released record half-year results, with sales up 52% in the six months to November 5, 2005, in a market that’s showing growth of just 4.8%. As a result, Inter Link now claims to be the number one retailer-branded cake supplier in the UK.

Divisional director for sales Mark Fielding says the majority of Interlink’s business with the wholesale trade is during the run-up to Christmas, with products such as Bronte Traditional Christmas Cakes and Hoppers mince pies featuring heavily. “Our combined wholesale business is worth around pound;1.5m at RSP. For Christmas 2006 we plan to revive the Mrs Peeks puddings brand to provide cash and carries and wholesalers with a true one stop shop for Christmas.”

He continues: “Retailer brands in general are performing strongly. The retailers support them but also customers have come to recognise that such products represent excellent value and quality. Most key customers now have a top tier of products such as Finest or Extra Special that not only represents good value but also the best possible quality.

“Meanwhile, healthier options are showing growth but from quite a small base. Cakes are still perceived as a treat and people prefer to have the great taste rather than compromise on that for fewer calories. Indulgent and premium products continue to play an important part but are not growing significantly. Celebration and birthday cakes, and licensed lines, continue to drive growth in the market and there is a constant high level of innovation because consumers are always looking to be tempted by a new treat.”

As well as its success in own label, Inter Link owns some strong brands including Soreen, the number four cake brand in the UK.

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=== Buyer’s viewpoint ===

All sectors of the cakes market are showing growth (everyday, kids, celebration and events). However cake bars and muffins are specific product areas that are in decline while the diet/health sector is growing.

Nisachill recently launched a fresh cream cake range, which has proved extremely successful and is projected to be worth more than pound;1m by the end of the year. However, elsewhere in the cake market Nisa-Today’s own label range development plans have been put on hold as we have been focusing on bringing Manor Bakeries away from van sales and into central distribution.

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