Greatest growth for healthier biscuits

The biscuits and cakes market is expected to continue growing over the next 5 years, according to the Biscuits & Cakes Market Report 2013. Market Report Plus examines the biscuit and cake industry in the UK. According to Key Note calculations, the market grew by 4.4% in 2012.

Biscuits and cakes are popular in the UK and penetration has been rising as consumers continue to enjoy affordable treats during the economic crisis. The sector for biscuits accounts for most of the market and increases its market share over the review period. The sector is further subdivided by types of biscuit. Healthier biscuits account for the largest subcategory within the biscuits sector, and the subsector has experienced strong growth in 2012 due to a surge in the popularity of breakfast biscuits.

Although the biscuits and cakes market grew in 2012, this was principally down to price inflation rather than an increase in demand. Cash-strapped Britons are purchasing biscuits on offer and brand loyalty is waning as consumers swap household brands for own-label equivalents. Retailers now offer products of similar quality but better value. Branded cakes have particularly suffered under this phenomenon as own labels now account for roughly 70% of cake value and volume sales.

The biscuits and cakes market is saturated with products and falling disposable incomes have failed to stimulate manufacturers to invest in large-scale innovation. With the exception of Mondelez UK Ltd previously known as Kraft Foods UK Ltd, which has recently pioneered the concept of breakfast biscuits, companies in the market are focusing on variation instead of launching new products.