Treat, sharing, on-the-go and healthier options are the four main areas which can turbo-charge biscuits and cakes sales in c-stores
What’s an afternoon tea without a slice of cake, or a cuppa without something to dunk? Not much, it seems, given that biscuits and cakes remain frequently-purchased snacking staples for c-stores.
Kantar Worldpanel data shows that people eat on average the weight of 16 basketballs in biscuits each year, that’s 9kg. The treats are worth £2.4bn annually, which is a fall of 0.3% in the year to last July 17. However, the cakes market is performing better – up 2.3% at £1.9bn in the year to July 2017. In the convenience channel alone value sales are up 12% over the past five years, according to IRI data.
While sales growth of both cakes and biscuits overall has not been meteoric in the past year, individual sub-categories of both demonstrate that they still have much to play for.
Kantar research shows that small cakes, large tarts, pies, Swiss rolls, flapjacks and cake portions are all in growth, while cake bars, fruit pies, muffins and slices are showing the greatest decline.
And HIM Research & Consulting reminds us not to underestimate biscuit shoppers either as they spend longer in store, buy more items and spend more than the average convenience shopper (CTP 2016).
Pladis says this is because the biscuit shopper is most likely to be on a top-up shop, which is the number one mission for convenience store shoppers. The biscuits giant says this category is therefore a key one to get right to retain high-value shoppers and drive incremental snacking sales.
Atul Sodha, owner of Londis store Peverells, in Uxbridge, Middlesex, is a biscuit “ambassador” for Pladis and he got help from the firm last year to rejig his range, experiencing growth as a result.
He says the McVitie’s owner used some of his epos data to help him merchandise better. “It’s important to do it right,” he says, “but you have to tailor it to needs in your store.”
Atul had put biscuits front of store with beverages, but he’s moved them to a high footfall area with soft drinks at the back of the shop.
Heather King, manager of Thorncombe Village Community Shop in Dorset, says cakes and biscuits combined are probably the most important category after fruit, vegetables, bread and milk for her.
However, biscuits are more important than cakes in her shop, because it also has a small café where homemade cakes are in demand.
Heather does the ranging herself and buys Booker’s “cheaper” range of pricemarked custard creams and everyday digestives such as Happy Shopper. These, alongside her range of locally-sourced more premium products, means she is offering something for everyone.
“The others we get from local suppliers. We are quite close to Moores Biscuits and we stock Border Biscuits and some unusual ones from Cottage Delight and Devon Cakes.”
She adds that she thinks it is good to have new items within this category to keep it interesting, so she likes to try most NPD.
Vip Measuria, who runs two One Stop stores in Derby, says cakes and biscuits are important in both his stores. He thinks it’s always worth trying NPD within this category as shoppers will often be interested in trying something new. “Make sure you have your bread and then cakes, such as Mr Kipling Apple Pie and Cherry Bakewells, then coffee in between, and then biscuits,” he advises.
Vip is similar to Heather in that in his Barrowash branch he stocks a mix of branded and locally-baked goods in the form of Battenberg, chocolate brownies, cornflake clusters, chocolate Swiss rolls, mini Victoria sandwiches and Rocky Road from local bakery Luke Evans.
Chris O’Connor, of Eat 17 in East London, also sells a lot of locally-baked cakes. “Cakes and biscuits are interesting and popular, but cakes especially. We use a lot of people who have worked in bakeries and have set up independently from home to make cakes.
“We have six or seven of these suppliers. We bake some of our cakes in-house as well. We get cakes in on a daily basis and we change them all the time.”
Seasonal biscuits +3.4% to £145.4m
Savoury biscuits +3.1% to £123.7m
Special treats +2.6% to £178m
Everyday treats +2.4 to £388.5m
Healthier biscuits +1.3% to £517.3m
Chocolate biscuit bars –2.1% to £356.9m
Children’s biscuits –2.8% to £110.1m
Everyday biscuits –7.1% to £300.5m
Source: Kantar Worldpanel 52 weeks to 17 July 2016
Cracking the market
Some convenience retailers find the category a tough one in terms of merchandising and profitability. Harj Gill, co-owner of The Windmill Select and Save in Rubery, Birmingham, says: “More could be done to support convenience store retailers. Wholesalers could also help us more. We buy from Nisa and you have to buy boxes of eight or 10 Mr Kipling cakes to sell for £1 because you get them for a cheaper price. If you buy three from them you have to sell them for £1.79.
“I’ve noticed some biscuits sell only when on promotion because people want value for money – people expect to be able to get them for the same price as the discounters.”
Raj Aggarwal, owner of Spar stores in Wigston, Leicestershire, and Hackenthorpe, Sheffield, agrees that biscuits is an important category, but is also very promotion- driven.
He says: “Cakes and biscuits are volatile, but are in my top five for turnover. Where we have promotions, such as Mr Kipling cakes for £1, and McVitie’s Chocolate Digestives when on a pricemarked reduced price promotion, they fly out and see a massive uplift. These promotions take place at least once in a three-month cycle.
“I allow about 3ft for cakes, 6ft for biscuits and another 3ft for promotional biscuits. In terms of space in store they come about ninth or 10th.”
Vip also finds that what sells best depends on what’s on promotion. He often has a lot of biscuits on promotion and very good deals, such as Jaffa Cakes – which he says are volume drivers – at better than half price at 50p for 12. “They are walking out,” he says.
Heather avoids relying heavily on promotions by ensuring that at least a third of her stock is pricemarked to create the image of good value.
Vip believes that suppliers can tar all types of grocery stores with the same brush, especially on cakes, as they don’t understand the convenience market. He adds that there are exceptions, though: “Biscuit suppliers do a bit better and Pladis does it very well for convenience stores with McVitie’s.”
Bag extra sales with bite-size packs
Bahlsen launched its Pick Up! Minis last August. These are mini variants of the full-sized Pick Up! biscuits made up of a thick slab of chocolate sandwiched between two crisp biscuits.
Each biscuit is individually wrapped and they come in milk chocolate and choco & milk flavours.
Early last year Pladis launched new McVitie’s Digestives Nibbles – the first innovation of its kind for the UK biscuit category, it claims, offering the taste of the McVitie’s Digestive biscuit range in a bite-size format.
This year it’s the turn of Burton’s Biscuit Company, with Maryland Cookie Bites (rrp £1.49), which it describes as “an indulgent innovation in a new pack format from the £45m Maryland brand”.
Border Biscuits has met demand in the snacking market with a snack pack comprising eight individually-wrapped mini packs, including Viennese Whirls, Butterscotch Crunch, Divinely Choc Chip Cookies and Crunchy Oat Crumbles. Brand and innovation director Lesley Ann Gray says: “We have further enhanced the mini pack portfolio with a Dark Chocolate Gingers variety that includes two biscuits per pack.” She says it is perfect for the food-to-go fixture as part of a meal deal.
“NPD continues to drive the brand and we have introduced Dark Chocolate Gingers and a new Cookies range. And we’re looking forward to exciting new developments across our best-selling varieties,” she promises.
Hena Chandarana, trade communications controller of Pladis, says 80% of biscuit category sales in the convenience channel come from just 8% of products.
McVitie’s occupies six out of the top 10-selling biscuit brands in convenience, she points out, but biscuit brands across the board have faced stiff competition from own-label products, discounter growth, range rationalisation projects and also changes in promotional strategy.
“A major driver impacting the dynamic between own label and brand is the rise of the discounters. Discount retailers play a disproportionately important role for biscuits, representing nearly 19% of category sales,” she says.
Pladis has a website devoted to impartial biscuit merchandising advice called Better Biscuits Better Business. It states that the top 10 best-sellers are McVitie’s Milk Chocolate Digestives, Dark Chocolate Digestives and plain Digestives, followed by Jaffa Cakes, Cadbury Milk Chocolate Fingers, McVitie’s Milk Chocolate Hobnobs, Oreo Cookies, Kit Kat 2 Finger biscuit bars (7x20.8g), Maryland Cookies Choc Chip and McVitie’s Rich Tea.
Go to www.betterbiscuits.com for more information.
Small cakes, small tarts and Swiss rolls are showing the most value growth in the market, Kantar WorldPanel data shows.
Small cake sales climbed 8.6% in the year to 17 July from £530.9m to £576.3m to give them 30.3% of the market.
Sales of small tarts, which have 6.2% of the market, increased sales from £111.8m to £118.5m.
Swiss rolls have 6% of the sector. Small Swiss rolls enjoyed a 5.4% sales uplift to £64.8m and large Swiss rolls, an 8.8% increase to £48.9m.
The biggest casualties were cake bars, down 11.9% to £37.8m, and fruit pies down 9.5% to £34.6m.
Health is a factor that has gradually crept into the cakes and biscuits market and has accelerated with the war on sugar and other ingredients perceived as “unhealthy”. Kantar data shows healthier biscuits now has the largest value share of the market at 21.1%. Use of plant protein and Free from are two other major trends that have started to affect the cake and biscuit market.
Marina Love, marketing director at Natural Balance Foods, the Trek Wholefoods company, says limiting sugar is the UK’s main concern. Some 53% of people say they are reducing their sugar intake, as identified in a Nielsen Homescan survey last year.
The same survey also found that 40% of people are looking to limit their intake of processed foods and 29% say they are seeking healthy snacks. “Free-from bars and biscuits are driving the growth in the total healthier biscuits category – pushing sales up by 26% year on year to £104m, compared with breakfast biscuits which are now worth £84m,” Love says.
Wellbeing is an increasingly popular trend that Mondelez says is changing consumer eating habits in savoury snacks, with consumers looking for “permissible” snacks that drive a shift away from the likes of crisps which they might consider less healthy.
Mondelez International launched Belvita Breakfast Biscuits in 2009, which not only bought into the trend for healthier products, but introduced a new consumption occasion to the category.
Susan Nash, trade communications manager at Mondelez, says Belvita is the UK’s leading healthy biscuit and has one of the highest repeat rates in the biscuit category at 62%, with a growth of 13% last year.
Consumers are also showing a preference for “lighter choices” and opting for products that are premium and which use top-quality ingredients, according to Leanne Crowther, co-founder of Flower & White, which sells gluten-free Merangz and Muffinz.
The demand for gluten-free is not a “quick fad”, she says. “Demand from the younger generation does not seem to be slowing down and come not from those who have a medical reason.”
Atul Sodha introduced more gluten-free products last year because he says there was a need for it locally. Atul suffers from Crohn’s Disease and he mentioned this on Facebook. After seeing this, a mother came into the shop with her child who had been told he should have less gluten.
“The mother said other kids had Wagon Wheels or Oreos and he wanted a snack of some sort, so she bought something from the Mrs Crimble’s range and she said ‘you should have seen the smile on his face’.”
Pladis is extending its range to provide options for consumers with specific health concerns, including McVitie’s Gluten-Free Original Hobnobs and Chocolate Hobnobs.
“With 55% of UK consumers now open to buying gluten-free products, bringing the brand’s extensive baking expertise to meet a range of consumer dietary requirements is something we are committed to achieving,” says Chandarana.
And the increased media and consumer focus on sugar intake has led to a growth in demand for both indulgence and health, which he believes is likely to develop further this year.
As well as leading the way in terms of gluten-free bakes, Mrs Crimble’s is also extending its range of convenient individually-wrapped cakes such as its Coconut Macaroons.
Gill Green, marketing director at Mrs Crimble’s brand owner Wessanen UK, says: “Offering products that fulfil multiple criteria and appeal to both Free from buyers and mainstream alike is crucial.”
The firm is switching its cake slices to an individually-wrapped format from March.
“We are also packing some products individually within an outer for pre-planned on-the-go occasions such as lunchbox solutions,” Green says.
The firm launched individually-wrapped Authentically French Madeleines last year, which it says fulfils the need for something “utterly delicious but also gluten-free and convenient”.
IGD forecasts food-to-go overall will grow from £2.5bn to £3.3bn in the convenience channel by 2021 (November 2016) making this “a key opportunity area for biscuits to tap into”.
David Costello, head of category and shopper management at Burton’s Biscuit Company, whose brands include Maryland and Jammie Dodgers, says changing shopper lifestyles and a shift in traditional mealtimes have played a part in the growing demand for smaller pack sizes.
Atul points out that these individually-wrapped options are perfect for placing in the coffee-to-go area. “On-the-go has really transformed the category. It’s an ideal solution for having with coffee,” he says.
Chandarana adds: “Currently, only 7% of biscuit products are in on-the-go formats, which highlights a clear need for manufacturers to bring new products to market that deliver against this mission.”
Soreen sales director Lindsey Collier remarks on “huge growth” in convenience formats in the cake category, noting that Soreen Lunchbox Loaves has driven this growth.
Soreen trialled its Malt Loaf Bar in the Co-op last year and will launch it more widely into convenience stores in 2017. It is an individually-wrapped malt loaf bar that Collier says is low fat, contains 4g protein and provides a source of fibre.
Mikado also recently relaunched its 39g impulse format with a new rrp and 55p pricemarked promotional offer to help drive biscuit sales for afternoon snacking.
Harj at The Windmill Select and Save thinks snack packs are doing slightly better than other pack sizes in the category. “My best-selling cakes are some of the price-marked Lyons cakes and some of the Heritage and Mr Kipling lines. I would say snack packs are doing slightly better than the rest of the market. People are having them on the go.
“Also people who live on their own might just want two cakes, which Mr Kipling has been doing along with companies that supply flapjacks and muffins.”
Premier Foods launched its Cake on the Go range in April, comprising some of its best-selling Mr Kipling and Cadbury cakes in twin-pack formats, including Mr Kipling Angel Slices, My Kipling Cherry Bakewells and Cadbury Mini Rolls (rrp 89p).
Nick Wood, channel director at Premier Foods, says the Cake on the Go range is ideal for convenience retailers, noting that single and twin-pack cakes have almost doubled in size within the channel over the past five years.
Quick off the blocks in this area was Cadbury Amaze Bites, which launched into the convenience channel at the beginning of 2016. Within convenience alone, the Cadbury Amaze Bites range has achieved sales of £2.1m, which represents 33% of total Cadbury Amaze Bites sales.
Avtar says Cadbury Amaze Bites have sold well in his store, some variants better than others. “The double chocolate one outsells the chocolate & orange variant by two to one. It’s a premium product and appeals to people who want an indulgent snack at home, or commuters because they can open the tub and reseal it. I’ve got them in the on-the-go section.
“The merchandising technique that works best for us is a metal and wood merchandising table dedicated purely to cakes.”
five steps to better biscuit sales
Pladis advises retailers to follow these five steps to grow biscuit sales:
Make biscuits impossible to miss – locate the biscuit fixture towards the front of store, close to high footfall areas; adjacencies with complementary categories such as hot beverages will benefit sales of both
Stock the best-selling lines – ensure you are stocking the nation’s favourite biscuits to boost your category sales
Draw shoppers to the biscuit fixture – merchandise key brands in clear brand blocks to create standout; place similar product types together so shoppers can easily find what they want; use branded POS material to highlight and attract shoppers to the fixture
Make prices easy to see – give shoppers confidence by clearly displaying prices on fixture; shoppers trust pricemarked packs; use these to demonstrate value for money and fair pricing
Maximise impulse and events – use off-shelf display to drive impulse sales on biscuit promotions. One in five biscuits sold in convenience are for immediate consumption so don’t forget your on-the-go biscuits and cereal bars. People also eat more biscuits at Christmas and gifting is a key opportunity – make sure you offer a seasonal biscuit range.
Soreen sales director Lindsey Collier recommends cake products are placed next to destination categories such as bread to maximise the potential for impulse purchase and to link them with tea and coffee.
POS material in store is key for the Free from category, says Julian Cruttenden, sales manager at Welsh Hills Bakery. “Full-bay merchandising is starting to appear more and more, which we would support as our consumer research confirms that shoppers find it easier to shop for Free from products from one place.”
Whether it’s by offering interesting and local tasty treats, stocking plenty of convenient on-the-go packs, or expanding the number of healthier and gluten-free options, retailers are sure to be able to get more from their biscuits and cakes category.