KN15143

KEY NOTE BISCUITS AND CAKES PLUS : SEPTEMBER 2003

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This report covers: Biscuits, Cakes, chocolate biscuit bars, everyday biscuits, everyday treats, crackers, crispbreads, healthier biscuits, childrens' biscuits, special treats, seasonal biscuits, savoury biscuits, wrapped cakes, small cakes, tarts, pies, slices, large cakes, cake bars, unwrapped cakes, reduced-fat bakery products, chocolate labelling, bakery jams, Western European biscuit consumption, Polish Cakes market, Chocolate concerns, new brands, diabetic foods, labelling of genetic modification,

Companies & Brand Names covered include: Bahlsen, Burton's Foods, Hazlewood Foods, Inter Link Foods, The Jacob's Bakery, Manor Bakeries, Memory Lane Cakes, Nestlé UK, Northern Foods Grocery Group, The Ryvita Company, Thomas Tunnock, United Biscuits, Walkers Shortbread, Fabulous Bakin'Boys, Cookie Coach Company, Hibernia Foods, Kellogs, Mars, Paterson Arran, Boulevard, Cadbury, Entenmanns, Duchy Originals, Fox's Biscuits, Mr Kipling, Mars, Ryvita, Tesco, Doves Farm, Green & Black,

TABLE OF CONTENTS

Executive Summary
1. Market Definition
REPORT COVERAGE	2
MARKET SECTORS	2
MARKET TRENDS	3
Trends in Consumption	3
Table 1: UK Consumption of and Expenditure on Biscuits, Cakes and Pastries (grams and pence per person per week), 1997, 1999 and 2000	3
Eating Patterns and Occasions	3
Product Development	4
Cakefectionery	4
Healthy Eating	5
MARKET POSITION	5
The UK	5
Table 2: Consumer Spending on Food, Biscuits and Cakes (index 1998=100), 1998-2002	6
Overseas	6
2. Market Size
THE TOTAL MARKET	7
Table 3: The Total UK Market for Biscuits and Cakes by Sector by Value at Current Prices (£m at rsp and percent), 1998-2002	7
by market sector	7
Biscuits	7
Table 4: The UK Market for Biscuits by Value at Current Prices (£m at rsp and percent), 1998-2002	8
Table 5: The UK Market for Biscuits by Type of Biscuit by Value at Current Prices (£m at rsp and percent), 2001	8
Chocolate Biscuit Bars	9
Everyday Biscuits	9
Everyday Treats	9
Crackers and Crispbreads	9
Healthier Biscuits	10
Children’s Biscuits	10
Special Treats	10
Seasonal Biscuits	10
Savoury Biscuits	11
Ambient Cakes	11
Table 6: The UK Market for Cakes by Value at Current Prices (£m at rsp and percent), 1998-2002	11
Table 7: The UK Market for Cakes by Type of Cake by Value (£m at rsp and percent), 2002	12
Small Cakes, Tarts, Pies and Slices	12
Large/Whole Cakes	12
Cake Bars	13
Large Pies and Tarts	13
OVERSEAS TRADE	13
Imports	13
Table 8: Imports of Biscuits (£000), 1999 and 2001	13
Exports	14
Table 9: Exports of Biscuits (£000), 1999 and 2001	14
3. Industry Background	15
RECENT HISTORY	15
NUMBER OF COMPANIES	15
Table 10: Number of UK VAT-Based Enterprises Engaged in the Manufacture of Rusks and Biscuits, Preserved Pastry Goods and Cakes by Turnover Sizeband (number and percent), 2002	16
EMPLOYMENT	16
Table 11: Number of UK VAT-Based Local Units Engaged in the Manufacture of Rusks and Biscuits, Preserved Pastry Goods and Cakes by Employment Sizeband (number and percent), 2002	17
REGIONAL VARIATIONS IN THE MARKETPLACE	17
DISTRIBUTION	17
Table 12: Retail Distribution of Biscuits and Ambient Packaged Cakes by Value ( percent), 2002	18
HOW ROBUST IS THE MARKET?	18
LEGISLATION	19
key TRADE ASSOCIATIONS	19
The Biscuit, Cake, Chocolate and Confectionery Alliance	19
4. Competitor Analysis
THE MARKETPLACE	21
MARKET LEADERS	21
Bahlsen Ltd	21
Burton’s Foods Ltd	21
Hazlewood Foods Ltd	22
Inter Link Foods PLC	22
The Jacob’s Bakery Ltd	23
Manor Bakeries Ltd	23
Memory Lane Cakes Ltd	24
Nestlé UK Ltd	24
Northern Foods Grocery Group Ltd	25
The Ryvita Company Ltd	25
Thomas Tunnock Ltd	26
United Biscuits (UK) Ltd	26
Walkers Shortbread Ltd	27
OTHER COMPANIES	28
Fabulous Bakin’ Boys Ltd	28
Cookie Coach Company Ltd	28
Hibernia Foods Ltd	28
Kelloggs GB	28
Mars UK	28
Paterson Arran	28
OUTSIDE SUPPLIERS	29
ADVERTISING AND PROMOTION	29
Table 13: Main Media Advertising Expenditure on Biscuits and Cakes (£000 and percent), Year to September 2001 and 2002	29
EXHIBITIONS	30
5. Brand Strategy
MARKET DEVELOPMENTS	31
Table 14: Leading Brand Shares of the UK Biscuits Sector by Value ( percent), 2001	31
BRAND TYPES	32
BRAND NAMES	32
Bahlsen	32
Burton’s Gold Medal Biscuits	32
Cadbury	33
Entenmanns	33
Duchy Originals	33
Fabulous Bakin’ Boys	33
Fox’s Biscuits	34
The Jacob’s Bakery Ltd	34
Inter Link Foods	34
McVitie’s	34
Mr Kipling	35
Mars	35
Nestlé	36
Ryvita	36
Tesco	36
Walkers Shortbread	36
OTHER BRANDS	36
Cookie Coach Company	36
Doves Farm	37
Green & Black	37
Paterson Arran	37
BRAND ADVERTISING	37
Table 15: Main Media Advertising Expenditure on Biscuits and Cakes Brands (£000), Year to September 2002	37
Bahlsen	38
Boulevard	38
Burton’s	38
Cadbury’s	39
Fabulous Bakin’ Boys	39
Fox’s Biscuits	39
Jacob’s Bakery	39
Mars	39
McVitie’s	40
Thomas Tunnocks	40
5. Strengths, Weaknesses, Opportunities and Threats
STRENGTHS	41
WEAKNESSES	41
OPPORTUNITIES	41
THREATS	42
6. Buying Behaviour
CONSUMER PENETRATION	43
Table 16: Penetration of Biscuits and Cakes ( percent of adults), 1996, 1998, 2000 and 2002	43
Penetration by Sex	43
Table 17: Penetration of Biscuits and Cakes by Sex ( percent of adults),
2002	44
Penetration by Age	44
Table 18: Penetration of Biscuits and Cakes by Age ( percent of adults), 2002	44
Penetration by Social Grade	45
Table 19: Penetration of Biscuits and Cakes by Social Grade ( percent of adults), 2002	45
Penetration by Region	45
Table 20: Penetration of Biscuits and Cakes by Region ( percent of adults), 2002	46
7. Current Issues
PRODUCT DEVELOPMENT	47
NEW BRANDS	47
CHOCOLATE CONCERNS	48
LEGISLATIVE AND GOVERNMENT ISSUES	48
Diabetic Foods	48
The Labelling of Genetic Modification	48
8. The Global Market
the Global Marketplace	49
Global Sales	49
INTERNATIONAL MARKET PERFORMANCE	49
The Republic of Ireland	49
China	50
Asia Pacific Region	50
9. Forecasts
INTRODUCTION	51
Table 21: Household Final Consumption Expenditure and Retail Sales Index (£m and index 1997=100), 1997-2001	51
forecasts 2003 to 2007	51
Table 22: The Forecast UK Biscuits and Cakes Market by Sector by Value at Current Prices (£m at rsp), 2003-2007	52
Market Growth	52
Figure 1: The Forecast UK Biscuits and Cakes Market by Sector by Value at Current Prices (£m at rsp), 2003-2007	53
FUTURE TRENDS	53
Demographics	53
Table 23: Age Profile of the UK Population (000 and percent), 2000, 2004 and 2008	54
Market Segmentation	54
Product Development	54
Competitor Forecasts	54
10. Company Profiles
Bahlsen Ltd	56
Burton’s Foods Ltd	58
Inter Link Foods PLC	60
The Jacob’s Bakery Ltd	62
Manor Bakeries Ltd	64
Northern Foods Grocery Group Ltd	66
United Biscuits (UK) Ltd	68
Walkers Shortbread Ltd	70
11. Company Financials	72
12. Further Sources
Associations	74
Publications	74
General Sources	74
Bonnier Information Sources	75
Government Publications	76
Understanding TGI Data	77
Number, Profile, Penetration	77
Social Grade	78
Standard Region	78

EXECUTIVE SUMMARY

The UK biscuits and cakes market forms part of a strong food industry and was valued at £2.74bn in 2002. Sales have been in line with those of the food market overall, with particular growth since 2000, as suppliers have developed products that are convenient and target current lifestyles and eating trends.

There are two main sectors in the market - biscuits and cakes. Biscuits have seen strong activity on the part of suppliers in recent years. The development of more portable products has been a significant feature, with the implementation of tube formats giving way to single-serve and miniature, bagged snack products more recently.

The cake sector has experienced an even higher level of growth, as products have been reformatted for the snacking and eating `on the go' market for the first time. Initial offerings were led by cake bars, although, since 2001, there has been considerable innovation in single serves of other cakes and pastries, including muffins.

Branding is a significant feature of both sectors. Major players in the biscuit sector include United Biscuits, Burton's Foods and Northern Foods, all with a strong portfolio of brands and sub-brands. However, smaller brands, such as Bahlsen, are also significant in particular categories. Cake suppliers are led by Manor Bakeries, who supply the Mr Kipling and Cadbury brands, with suppliers such as Hazlewood Foods and Inter Link Group offering products to the retailer own-label market.

Most product developments in the biscuits and cakes market have been dominated by brand extension. New formats have tended to be of established brands, a method of product introduction which lessens the risks involved. As well as stretching biscuit and cake brands, confectionery branding is also on the rise. In 2001/2002, products entered the market from brands such as Twix, Smarties and After Eight.

The success of new product formats and brand extensions is a strong indicator that the market still has potential for positive growth in the short to medium term.

Text © 2003 Key Note

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Last updated by Amanda Porteous July 2003