Time for tea means time for cakes and biscuits, and shoppers are continuing to shop for these treats despite the healty eating message.
The month of January may be all about counting calories and cutting back the snacks in an attempt to make up for the indulgences of December. But never fear retailers, despite overarching health messages affecting shoppers’ buying habits, nine out of 10 people still regularly eat sweet biscuits, while six out of 10 agree that it’s okay to eat a small number of sweet biscuits every day as part of a balanced diet (Mintel, 2017).
In fact, as a nation, we buy biscuits nearly every week, with the average household in the UK shown to purchase them on 44 different occasions throughout the year, equating to about 92 packs per household each year (Kantar Worldpanel 52 w/e July 2017).
The biscuit category is key for the convenience sector, worth £2.3bn (Nielsen to w/e 29 October 2016) in the UK, and growing faster within convenience than within the wider market (up 0.6%, Nielsen MAT to 5 November 2017).
Mandy Bobrowski, UK & Ireland marketing director for Burton’s Biscuit Company, says demand for biscuits in the impulse channel shows the potential of the category. She adds: “We are working with retailers to ensure they see the best possible results from the biscuit fixture and, in turn, to enable them to drive incremental profits.”
Many retailers say that at least one of these categories – biscuits or cakes – is a very important fixture in their store. However, the popularity is bound to be influenced by the demographics of the area. For example, Yorkshire shoppers tend to drink a lot of tea, and biscuits and cakes go hand in hand with this tradition.
Further north, Mandi Duncan, owner of two Day-Today stores around Ayrshire, points out that she gets great sales of cakes thanks to the high proportion of elderly residents in the area. Mandi ensures to provide ample choice for these key shoppers.
“Elderly shoppers love their cake and we have quite a few elderly residents in the area so they come in frequently for their cakes. We keep a large range from the main brands as well as from local suppliers,” Mandi says.
Jerry Tweney, owner of Prestbury Village Stores in Cheltenham, Gloucestershire, agrees that biscuits and cakes are everyday essentials for more elderly shoppers, and points out that they’re likely to sell better if you retail in an area where there’s a lot of community groups and afternoon tea-type meetings.
“Cakes and biscuits are on my order, along with milk and bread, without fail. I don’t think this category is massively affected by the trend for healthier eating in my store as this is really a trend that the younger generation is following, not the elderly shoppers whom I find tend to buy these on a regular basis. These shoppers like to sit down at 11am with their cup of tea and a nice biscuit, and no health trend will change that.
“There’s also a lot of meet-ups in this area; there’s a WI and a lot of other community group meetings which always involve biscuits.”
But community group meetings are by no means the only time cakes and biscuits are consumed. With 44% of UK adults planning more quiet nights in, sharing and more indulgent treats are becoming an increasingly important part of the category. The everyday treat segment, worth £432m, is currently driving the category +5% (Nielsen MAT 7 October 2017) and this is predicted to grow further.
Pladis has looked at ways to tap into the everyday treat opportunity with its biggest ever research involving 14,000 people across the UK. It discovered that one-third of these consumption moments are based around sharing and indulgence.
Hopping into the family occasion
Cadbury Biscuits is aiming to bring more joy to the biscuit aisle with its new Cadbury Freddo Face Cakes – a soft cake sandwich with a creamy chocolate chip filling.
The new product is designed to be a fun addition to the family sharing occasion, with different Freddo face expressions to choose from.
Also available from this month are new Cadbury Freddo Biscuits available in £1.29 pricemarked packs and non-pricemarked packs. The iconic Freddo character shape will make its debut in biscuit form and will be half coated in chocolate.
The two new launches aim to recruit young families and the next generation of biscuit lovers through a trusted brand from the nation’s favourite chocolate (Nielsen MAT to w/e 4 November 2017), and will be supported by TV and digital activity.
Cadbury Biscuits marketing manager Chiara Missio said: “Given that our vision for Cadbury Biscuits is to bring more joy to the nation’s biscuit lovers while driving interest and value to the category, and the Cadbury Freddo brand having a well-established 30-year heritage, this makes for an ideal partnership that will truly excite parents with young families.
“Our research shows that the main consumption moment for these products is the family sharing occasion, and soft cakes and chocolate biscuits are the two top snack categories with 18% and 13% share respectively (U&A research). We believe this will unlock further sales, both in the main shop and top-up shop, so retailers should stock up now to make the most of the opportunity.”
Further providing the importance of this opportunity, HIM insight has shown that cosy nights in are a big trend for young affluent couples and will influence the convenience channel. The insight has also shown that three-quarters of those hosting such events won’t buy a dessert, representing a big opportunity for cakes and biscuits.
McVitie’s Digestives Nibbles, the chocolate-coated biscuit balls sold in sharing bags, taps into this occasion. It is now worth £13m (RSV Nielsen MAT 7 October 2017) and has added £17m to the category in its first year of launch (Nielsen March 2016 to March 2017).
In a further aim to appeal to a younger generation of consumers more aware of healthier eating, many brands have brought out ‘thin’ versions of their products so as to provide a lighter and therefore ‘healthier’ option.
Burton’s Biscuits unveiled its new Maryland Thins in June last year. Mandy Bobrowski explains that these are targeted at shoppers aged between 25 and 45, who are looking for lighter snacking options. She says the Thins allow retailers “to attract younger shoppers into the category through new and exciting products targeting afternoon snacking: the second biggest occasion for cookies (Kantar February 2017)”.
McVitie’s introduced its new Digestive Thins to the convenience market last March, stating that these had been developed to attract younger consumers and tap into their need for little, yet indulgent, rewards.
The brand says the product has outperformed all other new product development this year and remains the number one npd launch of 2017 (Nielsen w/e 5 August 2017).
The age of the shopper also has an impact on Jerry’s cake sales. He says his most popular cakes are the higher-end, locally-sourced products, such as those lines in the large Fatherson range that he sells. He thinks his shoppers are less interested in boxed and branded cakes, which are a more popular with young families. He admits, though, that another reason could be the price point.
“People can buy branded cakes in the multiples where they are likely to get a better price. That’s not what people come to my store to buy; they are looking for something a bit more interesting.”
sharing packs tick all the boxes
Lesley Ann Gray, brand and innovation director at Border Biscuits, says the brand has been tapping into increased interest in sharing packs.
She says its 400g sharing pack continues to be one of the brand’s most popular lines as customers look for quality products and value for money.
The box includes six different recipes from the Classic range including: Light & Chocolatey Viennese Whirls; Sweet Memories Butterscotch Crunch; Light & Buttery Chocolate Chip Shortbread; Chocolate Oat Crumbles; Buttery Sultana Melts; and Divinely Chocolatey Cookies.
“Products offering a variety of biscuit types for sharing occasions are among our top-selling items due to the range of flavours and textures to tempt everyone’s tastes.
“As shown by Mintel’s statistics last year, more than half of consumers see biscuits as a nice gift at any time of year, and the sharing pack is no exception. The pack offers a premium product at an accessible price point that is ideal to share casually with friends, or as a more formal gift.
“As a universal present, biscuits are a well-balanced gift that’s not overboard but is still sincere, meaning they reasonate well with consumers across various occasions throughout the year.”
While Jerry doesn’t think that cakes or biscuits have been affected by the sugar-reduction trend, he has seen an increased interest in gluten-free products. He points out that these only work well because they are still very tasty products, as a treat still must be a treat, whether it’s gluten-free or not.
“We sell the Walkers gluten-free lines as well as the Mrs Crimble’s lines. This is something people are asking for much more frequently now. They’re very tasty products.”
When Mandi revamped her Barassie store, she ensured to extend her offer of cakes and biscuits, doubling the existing range. The Mrs Crimble’s gluten-free cakes are a new addition, she says, which are selling well.
While many retailers have a dedicated gluten-free display, the increase in people without a diagnosed intolerance buying into the category means they should also also be merchandised within the main cake and biscuit category. Last summer the number of people diagnosed with coeliac disease stood at 1%, while 13% of the UK population avoids or aims to cut down on gluten, plus a further 8% say they would like to cut gluten out of their diets (Coeliac UK).
The importance of keeping up to date with new products in this category should not be underestimated. Innovation and new pack formats are factors that have played a key role in driving biscuit category growth, according to Burton’s Biscuit Company’s Bobrowski.
Robert Eggo, store manager at Spar Roe Lane, in Southport, says it is essential to keep up with npd in this area as people often like to try something new when treating themselves. “Biscuits are quite a slow category in general but people will always be interested in trying a new product. Whenever we put something new on the shelf people will pick it up and so we always try to keep up with what’s happening within the market.”
Promotions, too, have a huge influence on shoppers’ buying habits. Jerry thinks that there are two main ways people like to shop the cakes and biscuits category: those looking for premium products to share with guests; and those looking for value products to keep on-hand for day-to-day snacking.
“I think the two main trends are towards the top-end biscuits, such as the Walkers stem ginger and chocolate biscuits, and our small company products such as our Teoni’s handmade cookies.
“Then there’s those looking for two packs for £1, or any line on promotion at £1. Builders will come in every few days to buy their two packs of cheaper biscuits for £1 to keep them going at work. And if I have McVitie’s Hobnobs or Digestives on promotion at £1 then they will be the top seller in the category for the duration of the promotion.”
Indulgence and health innovations
Susan Nash, trade communications manager at Mondelez International, says that of the three main sectors of the biscuit market, sweet holds the lion’s share of sales, worth £1.4bn (Nielsen to w/e 6 August 2016).
In April Mondelez International unveiled its first Cadbury biscuit, Cadbury Roundie, which blends layers of crispy wafers with thick chocolate cream and coated in chocolate.
More recently, it introduced Cadbury Crunchy Melts – crunchy chocolate chip cookies with a soft melting centre, aimed at those seeking a little more luxury.
The company has also been looking to develop Oreo, one of the biggest contributors to growth for the sweet biscuits category in the UK, contributing £11.2m to the category in 2016 alone (Nielsen MAT to w/e 6 August 2016). It is currently valued at £50m in the UK, growing at 14%.
In October, the brand launched a public consultation asking consumers to help it decide on its next addition to the range, with 43% voting for a brownie batter centre in the Oreo cookie. This sku was launched last summer, supported by a £2.5m spend.
When it comes to healthy biscuits, Nash says that despite it being a relatively recent development, the sector continues to hold its own in the market, with a value of £485m (Nielsen to w/e 29 October 2016).
Mondelez’s Belvita Breakfast is now worth £80m, currently showing 6% growth. Launched in August 2015, Soft Bakes has been Belvita Breakfast’s biggest innovation to date, designed to help address consumer demand for different textures. Soft Bakes are worth £18.2m (Nielsen, Total Coverage, Total Value MAT 17 June 2017).
Belvita’s Soft Bakes range expanded further last August with the launch of Soft Bakes Filled. The product is a soft and chewy baked biscuit made from five wholegrains, with two fillings to choose from: Choco Hazelnut; and Strawberry.
The launch was supported by a £2m marketing campaign, including sampling, TV advertising and in-store activation.
Win with promotions
This finding is backed up by HIM research which shows that 30% of biscuit purchasers buy the item when it’s on promotion, which is higher than the average percentage of promotional purchases in other categories (19% of shoppers bought something on promotion).
Robert has also noticed this trend. He says that £1 pricemarked cakes are a top seller in his store. “We sell a lot of cakes, but those that sell particularly well are the £1 range. These are some of our best sellers when they’re on promotion, or have that £1 mark on pack.
He adds that this is the same case with biscuits. “In biscuits, it’s always the promotional lines that go fastest, as well as the npd.”
A sure-fire way to give your sales an extra boost from promotional stock is by cross-merchandising with coffee and tea, both on-shelf and to-go.
Spar Hackenthorpe store owner Raj Aggarwal has to offer excellent value for money to his customers as his store is within a housing estate where money is tight. Raj says that snacking products are very popular and so biscuits and cakes do well, but he does particularly well with deals that can’t be found elsewhere.
“There’s a job-lot supplier in Leicester and they take the products from suppliers when there’s been an issue with the packaging, such as they’ve put the wrong date on the box, or the boxes have been damaged. The products are all fresh and high quality, but they can’t be sold the usual way so they are sold off in big bags. We can sell them for £1 a bag and still make a 30% margin on them.
“Some of the products are Cadbury’s, Burtons, and other well-known brands, so you know they are good quality. Customers love these as they can see they’re getting excellent value for money.”
Raj says his Polish biscuits and cakes are also very popular as, again, these are competitively priced, usually only £1 per pack, and they still offer him 30% or 35% margins.
However, the importance of price and the interest in bulk buys will vary greatly depending on your shopper demographic. For example, Kris Harrison, store manager at Laceby Lodge Services in Grimsby, says his shoppers are mostly interested in food to go, so portion-sized packs are king.
“Before we opened we expected that multipacks of biscuits would go better than singles because they offer better value for money, but being a forecourt store people have a different mindset and they tend to just want those to go, so we devote more space to the singles.”
Biscuits sell especially well alongside hot drinks. “Our hot beverages section sells unbelievably well and is merchandised next to the packs of biscuits so that gives the biscuits a bit of a boost as people will be encouraged to pick up a pack with their jar of coffee.”
This trend is in keeping with a trend seen in many convenience stores, not just fuel stations. Lesley Ann Gray, brand and innovation director at Border Biscuits, says mini-pack offerings have been increasingly popular with the brand’s consumers, as they are an easy on-the-go snack that also aids portion control and reduces food wastage.
She adds: “Last year we tapped into the on-the-go trend with the launch of our new Café Bake range. The selection includes Yogurt, Cranberry and Pumpkin Seed Oat Crumbles, Pecan and Maple Syrup Oat Crumbles, and Lemon Drizzle Melts. The bakes come in stylish counter display units of 20 with each biscuit packaged in Border packaging.
“On the same theme, our Snack Packs provide a great option for snacking on the move, travelling, or popping in a lunchbox. The twin mini-packs contain biscuits in four different flavours such as divinely Chocolate Chip Cookies, Sweet Memories Butterscotch Crunch, Oat Crumbles and Viennese Whirls.”
Bobrowski advises convenience retailers to always make sure ‘must stock’ lines are available at all times, and that they restock shelves regularly to avoid missing opportunities. She recommends retailers place FSDUs at high-footfall locations, using them to interrupt shoppers’ journey, and place in secondary locations to highlight seasonal stock.
“Follow these simple steps to getting the best from your biscuit offering, and watch your sales soar,” Bobrowski concludes.
While cakes and biscuits traditionally appeal most to the older generation of shoppers, manufacturers are working hard to attract more younger customers into this category and many of the innovations over the past couple of years have been very successful in doing so.
The rising interest in cakes and biscuits for sharing occasions is helping boost the appeal of this category among families and younger generations. So the opportunities are growing and it’s important that you offer a good mix of the new products alongside the old favourites in order to capture all audiences.