The improving economy is a major factor in stimulating demand for better quality products in all types of bakery products.

Changes in household structures have also affected the market sectors. More women are working, meaning that they are less likely to bake at home. There has also been growth in the number of one and two person households leading to greater demand for smaller portions of all product categories.

The decline in formal, family, sit-down meals, particularly formal teas, has greatly affected the market, at tea-time was the occasion when most bakery products were consumed. The industry has responded by positioning products more as suitable for snacking and for inclusion in the lunch box.

Growing awareness of the importance of a healthy diet among consumers has led to moves to reduce the amount of fat used in bakery products. This is still at a relatively early stage, but is expected to be further developed.

The growth of in-store bakeries has had a very beneficial effect on the market as a whole, stimulating sales and interest in the sector. At the same time, it has helped the major grocery chains increase their dominance of the market and has further hurt the traditional high street craft bakers.

Total market volume has increased by 7 percent between 1991 and 1996 to 3.7 million tonnes. Market value had increased by 17 percent at current prices to reach £6,255 million. Bread and morning goods continues to be the largest sector of the market with a 71 percent share by volume and 47.5 percent by value.

Cakes and pastries have improved volume sales by 12 percent to 336,000 tonnes in 1996, while market value has risen by 18 percent to £1,380 million.

Meeting the demands of smaller households and the growth in snacking, small wrapped cake portions have been the most dynamic segment of the market, improving to 29 percent of the sector, level with large wrapped cakes. There has been an overall decline for unwrapped cakes, but these are now recovering as the economy improves and in-store bakeries expand.

The acquisition of Lyons Cakes has given Tomkins the three largest brands in the cakes and pastries sector, Mr Kipling, Lyons and Cadbury's. The company dominates with a market share of 38 percent, while no other manufacturer has a share of more than 3 percent. Own label products have grown to take 40 percent of sales by value.

Grocery multiples have increased their dominance of the sector to account for 76 percent of total sales value, while high street bakers have fallen to 10 percent of the market.

Expenditure on advertising in the main media has been in decline and was little over £3 million in 1995, the majority of which was spend on television advertising for the Mr Kipling brand.

Consumer research found that 48 percent of respondents bought individual cakes on a regular basis, while 44 percent bought cakes for special occasions. The presence of children in the household was a major factor in each case. Cakes were most likely to be bought by those aged under 35, and those living in Scotland and the North East, while those in the South West and Yorkshire were least likely to buy.

Croissants and pastries had been bought by 39 percent of respondents, with 25-34 year old ABs. Those living in Scotland had by far the highest response rate, while Wales and the West was the lowest by a wide margin.

There is no significant foreign trade in cakes and pastries.

There is expected to be more focus on smaller portions to meet the demands for snacking and for smaller households, while greater use of character merchandising will be used to appeal to children. Further development of reduced fat cakes and pastries is also likely. The growing demand for better quality is expected to increase the value of sales by 7 percent to the year 2001.

The bread and morning goods sector has increased volume sales by 5 percent between 1991 and 1996 to 2.6 million tonnes. There has been intense pressure on pricing, particularly for standard sliced white bread, and the total market value has risen by only 12 percent at current prices to £2,970 million in 1996.

The growing perception that all bread, not just brown bread, is healthy has affected the share taken by brown bread, which has been reduced to 15 percent by value. The development of premium white breads has helped the wrapped white segment improve its volume share, but the price reductions on standard white have helped reduce the segment's value share to just under 29 percent. Expansion of in-store bakeries and growing interest in more unusual products, as well as greater demand for the perceived quality of fresh produce have helped other breads increase to 17.5 percent of the total and morning goods to 39 percent.

The market is dominated by Allied Bakeries and British Bakeries with 16 percent and 14 percent of the bread market respectively and 22 percent and 20 percent of morning goods. The growth of in-store bakeries has helped own label lines to grow to 60 percent of bread and a 40 percent share of the morning goods sector. The growth of premium white bread has helped Kingsmill become the major brand for Allied Bakeries, while British Bakeries' biggest name is Hovis, which has been extended into white bread and morning goods.

In-store bakeries and price cutting have been major factors in improving the dominance of grocery multiples which accounted for 75 percent of bread sales by value and 77 percent of the morning goods sector in 1996. The shares taken by high street bakers have fallen to 8 percent and 19 percent respectively.

Advertising support for bread and morning goods has been running at a fairly consistent level of £11-12 million per year. The two leading companies concentrate support on their major brands, using television and press advertising. A wide variety of on-pack promotions are also used. Generic promotional support for the industry is produced by a number of trade organisations.

A very high proportion of respondents buy bread on a regular basis, 81 percent for white bread and 73 percent for brown. White bread was most likely to be bought by women and those aged under 25. Brown bread was favoured by those in the AB group. Scotland was the highest area for both white and brown bread, while the North East was above average for white, and brown bread was popular in Wales and the West, and Yorkshire.

Speciality bread had been bought by 33 percent and was favoured by 35-54 year old upmarket respondents. It was most popular in Scotland and least popular in the South West.

Fruit bread had been bought by 24 percent, with women, ABs and those with children most likely to buy. Scotland and Yorkshire had the highest penetration levels, while the South West and North East were the lowest areas.

Small buns and teacakes had been bought by 45 percent of respondents and had an older, downmarket, northern bias. Doughnuts had a 44 percent response rate and were more likely to be bought by those aged under 35 and living in the South, although they too had a downmarket bias.

Foreign trade has been growing but remains at a very low level, with less than 1 percent of the total market volume being imported and only some 2 percent of domestic production being exported.

The improving economy and the growth of in-store bakeries are expected to further stimulate interest in more exotic and better quality breads and morning goods. There will also be more focus on smaller sizes to cater for smaller households. It is expected that there will be relatively little growth in volume sales, but trends towards better quality and smaller sizes should help increase market value by 15 percent to the year 2001.

The biscuit market has grown by 10 percent between 1991 and 1996 to reach 666,000 tonnes. Market value has improved by 23 percent over the same period to £1,730 million.

The major growth areas have been countlines and chocolate covered biscuits as the improving economy has allowed consumers to indulge their taste for luxury treats. Countlines have risen to 30 percent of the market by value, while chocolate covered biscuits have grown to take a 24 percent share. Other sweet and semi-sweet biscuits, which fared relatively well during the recession, have been neglected and have fallen to 35 percent of the total. Reduction in the consumption of cheese and competition from savoury snack products have helped cause a decline in savoury biscuits, which accounted for 12 percent of market value in 1996.

McVitie's is the dominant company in the sector with a 25 percent value share for its branded lines, as well as considerable own label production. The Jacob's Bakery, Fox's, Nestlé, Burton's and Premier Biscuits contest second place in the market. Own label sales have grown to 32 percent by value.

The multiple grocery chains have increased their share of the biscuits market to a dominant 79 percent by value.

The consumer research found that 73 percent of respondents had bought plain biscuits and 72 percent chocolate. The presence of children was an important factor, and both had a downmarket bias. Both had their highest levels of penetration in the North East, while the South West was a low area for both.

Cream or jam-filled biscuits had been bought by 42 percent of respondents. There was a bias towards females and those with children in the household, while they were not popular among those aged over 55 and ABs. Scotland had the highest response level by a wide margin, with Lancashire, Southern, the South West and East Anglia all well below average.

Foreign trade is growing, although imports still contribute less than 10 percent of the domestic market by volume. Exports by British manufacturers are more than twice the volume of imports.

Further growth is expected to be stimulated by product innovation as biscuits are made more healthy and are targeted more towards the snack market with smaller packs and more biscuit bars and countlines. There is also expected to be greater emphasis on appealing directly to children with greater use of character merchandising. It is anticipated that the value of the market will grow by 15 percent by the year 2001.

Other bakery products have grown by 40 percent since 1991 to reach 56,000 tonnes in 1996, while market value has improved by 50 percent to £175 million.

Sales of crispbread have been revived by the introduction flavoured variants, but there has been greater growth in the expanding range of other bakery products being introduced, notably bread sticks and French toast. The result has been that crispbread has declined to 50 percent of the sector by volume and 37 percent by value.

Ryvita is the major brand in crispbread, with own label being the only serious challenge. Other products are very varied and a number of small companies, many of whom are Scandinavian, Dutch or Italian, are involved in the segment.

Grocery multiples again dominate the distribution structure, with a 75 percent value share of sales.

The consumer research showed that 32 percent of respondents had bought crispbread, and indicated a female, older and upmarket bias. Yorkshire and East Anglia had the highest response levels, while the Midlands and London were the lowest.

Bread sticks had been bought by 27 percent, with a female, upmarket bias, and those aged 25-54 most likely to buy. They were most popular in Scotland and London, with Lancashire, the South West and Southern below average.

Only 10 percent of respondents had bought French toast, with no significant differences by gender, age or socio-economic grouping being revealed. Yorkshire, Scotland and East Anglia were the areas with the highest penetration, while the Midlands and South West had the lowest.

Imports have grown to more than 10 percent of the home market by volume. Exports have been declining, but British manufacturers have maintained a trade surplus in the sector.

Increasing availability of an expanding range of products is expected to boost sales value by 29 percent to the year 2001.