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The UK retail biscuits and cakes sector
experienced 18.4 percent growth between 1990 and 1995, to increase its market share of
the food sector from 4.5 percent to 4.6 percent. By 1995, sales had reached £2.2bn.
Biscuits and cakes benefit from the national sweet tooth and are regarded as
indulgence purchases. However, they are relatively inexpensive and are regarded
as a weekly purchase for most consumers.
Sector sales have benefited
from a number of factors, such as the reduction in food preparation time and
increased penetration of manufactured foods. In addition, the decline in
kitchen skills arising from changes in the education system together with
household structure have meant that fewer people are now able to produce
home-baked goods.
The main sectors in the market are biscuits and
cakes, but both can be further subdivided. Sweet and semisweet biscuits account
for the majority of sales, but increasing market share is being taken by
countlines and premium biscuits. Manufacturers have devoted considerable
resources to product development and marketing in these sectors, as they can be
sold at higher price points and can be more easily branded than large packet
lines. Biscuit assortments are increasingly dependent for sales upon the key
Christmas season. Plain and savoury biscuits are well placed to gain from
healthier eating trends, but in many cases need to shift towards the mainstream
food market.
Ambient cakes have been losing market share to frozen and
chilled products, but have met the challenge with new product formats. Premium
cakes are well placed to meet new competition. In addition, individual serve
and wrapped items such as cake bars are geared towards modern eating
habits.
Consumer penetration of these products is high, with the
majority of households purchasing biscuits and prepacked cakes. The major
buyers are among the full nest age groups and research indicates that the
presence of older children has a positive impact on purchasing behaviour in
relation to these products.
Smaller pack sizes, particularly
individually wrapped portions, are a major development. Many companies have
also identified the need for products with a more positive health profile. The
influence of children on purchasing behaviour, or `pester power' is also
recognised, with products and promotions targeting this group.
Text © 1996 Key Note
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Last updated by jacob van Eldik 1th February 2000