Executive Summary
The UK biscuits and cakes market was valued at £2.97bn in 2004, having grown by 17.3% since 2000. These products enjoy high levels of popularity among UK consumers, with biscuits and crackers being purchased by 92.7% of housewives in 2004.
Biscuits account for the largest sector in terms of sales. Chocolate biscuit bars continue to take the largest percentage of value sales, with nearly a quarter (24.5%) of sector value accounted for by these products. However, the fastest-growing area is that of 'healthier' biscuits. This subsector comprises cereal bars as well as 'better for you' products with reduced fat or, more recently, reduced carbohydrate content. These products have made considerable progress from being viewed as niche diet foods to being seen as viable alternatives to standard biscuits.
In the cake sector, the decline in family and formal occasions has led to the dominance of small, individual cakes over large whole cakes. Trends towards smaller households, staggered eating occasions and eating 'on the go' have also contributed to this. Product development has successfully targeted the demand for sweet, 'eat now' cake-based snacks, allowing listing alongside alternatives such as confectionery.
As well as 'healthier' products, other major drivers in the UK biscuits and cakes market include indulgence and children's products. Against the backdrop of ongoing rises in consumer disposable income, premium products including retailer own-labels such as Tesco's Finest have performed well. While the size of the UK's child population may be shrinking, the influence that children have on household spending in regards to biscuits and cakes is great.
Branding plays an important role in the biscuits and cakes market. As in many other areas of the food industry, suppliers have been keen to utilise the power of their brands to shelter new products as they enter the market. As a result, many new biscuits and cakes are ushered in as brand extensions to established labels, not only from the biscuits and cakes sector but also from breakfast cereals (e.g. Special K bars), confectionery (e.g. M&M's muffins) and yogurts (e.g. Ski bars).
The UK market for biscuits and cakes is relatively mature, although some areas continue to hold scope for growth. In the short to medium term, more brands are likely to be extended, and more ranges introduced to target impulse, lunchbox and 'on the go' sales. Key Note anticipates that this will serve to fuel continued growth in the market. |