Cakes and biscuits: Keeping it sweet?

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.

 

Dessert alternative

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.”

 

Gluten-free

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.”

 

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.