Magazine article Marketing

A Bigger Slice of the Action

Magazine article Marketing

A Bigger Slice of the Action

Article excerpt

Consumers may be more health-conscious than in the past, but in tough times they think of cakes as an affordable treat, writes Jane Bainbridge.

Birthday, wedding, dinner party, treat, indulgent snack: it seems there is a cake for every occasion. A luscious sponge or fruity tart may tick all the wrong boxes as far as fat and sugar content are concerned, but even in these healthy-eating-obsessed times, consumers still find room for a slice of cake.

The UK market for cakes and individually wrapped cake bars is a big and mature one, with sales worth pounds 1.63bn last year, according to Mintel. This was a rise of 18% compared with 2005, although some of this growth was the result of rising raw material costs being passed on to consumers. More than two-thirds of adults regularly eat cakes, according to research by Toluna.

The ceremony of making the first cut into, or blowing out the candles on top of, a big cake is associated with celebration, but it is cake bars that are proving most popular in our busy lives. Sales of small individually wrapped cakes rose by 12% between 2007 and 2009, accounting for pounds 768m - almost half of the market. Cake bars help with portion control as well as being a more convenient format.

If harder times have driven UK shoppers to cut back their spending on food, when it comes to cake-buying it's all about value for money. As retailers have often focused attention on the lower-value end of the cake market, branded cakes have embraced price promotions to buoy volumes.

However, cake manufacturers have also been innovating to maintain consumer interest. Polarisation of trends is replicated across many food categories, with NPD tapping into the healthy-eating trend as well as the premium/indulgent trend.

In January, 41% of adults rated healthy eating as a concern, up from 37% six months previously, according to TGI. Cakes, by their nature, do not fall into the 'healthy food' category, so some manufacturers have added reduced-fat options. This is only a small part of this market, however; Weight Watchers, for instance, accounts for just 4% of cake sales.

Meanwhile, the premium end continues to flourish as it plays on the consumer attitude that if you're going to have a treat, you may as well make sure it's a good-quality one.

There are several established and trusted brands in the cake market, the leading ones all owned or licensed by Premier Foods. Mr Kipling is the biggest, accounting for about a fifth of value sales, followed by Cadbury (licensed to Premier Foods) and Lyons.

Whether they eat them or not, the UK public will be hard pressed not to connect Mr Kipling cakes with its long-standing 'exceedingly good cakes' advertising strapline. In January, Premier Foods added Oatibakes, flapjack-style cakes, to the range.

Special occasions such as birthdays and Christmas have always provided a boost to cake sales, but less traditional cake-eating occasions are now being exploited by manufacturers. Limited-edition cakes around Halloween and Easter now feature on supermarket shelves as do Mother's and Father's Day options, albeit to a lesser extent.

There are factors working against cake sales. Their calorific load will deter some people entirely, but others are opting to bake their own, as cooking from scratch has enjoyed resurgence. This ensures that the consumer knows exactly what the ingredients are. …

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