Crunch time for cakes and biscuits

when faced with miserable weather, many people love nothing more than curling up on the sofa with a hot drink and a pile of their favourite biscuits - especially when there's nothing but bad news around.

"The biscuit category is proven to be resilient when the economy is facing a recession," asserts Sue Garfitt, head of insights, category and marketing planning at Burton's Foods. "It is at harder times that consumers often indulge in little treats to cheer themselves up."

The credit crunch might mean everyone's watching their pennies, but biscuits are one of the last things that people cut back on, because they're seen as a relatively inexpensive treat.

Cadbury Fingers are a good example, being the number one brand in the special treat segment and having performed particularly well in recent months, according

to Garfitt.

In fact, indulgence is a big trend in biscuits and new products reflect this, such as the Chunkie Extremely Chocolatey Fruit & Nut Cookie, containing dark chocolate chips, milk chocolate chunks, nuts and raisins, and covered with milk chocolate. Fran Kitson, Chunkie Cookies brand manager, says: "Consumer trends are showing a continued growth in treating occasions and consumers are looking for more affordable luxuries, such as biscuits, to treat themselves during difficult times."

Other brands are looking to take people's mind off the recession by focusing on nostalgia. Wagon Wheels, for example, will be packaged in gold and in a Caramel variant for a limited time.


Recipe for success


Within c-stores, both healthier and special treats are in volume and value growth, ahead of total convenience (Nielsen MAT to January 2009). However, Mintel reports that one in four consumers now eat fewer biscuits than previously. If so, how do retailers make sure they keep regular customers and attract new shoppers into the category?

"The best c-stores are keen to learn, know their customer and understand the trends driving the market," UBUK commercial manager Nick Stuart says. "However, research still shows that only 47% of impulse outlets stock McVitie's Chocolate Digestives. It is extremely important that to maximise their sales and profits, the trade stocks the biggest selling brands."

But brands aren't always best, and c-store shoppers are increasingly buying own label cakes and biscuits, according to the latest TNS data (52 weeks ending December 28, 2008). It shows that sales of cakes in the convenience sector were worth £98.9m, up 0.4%. However, of this total, branded cake sales were down 6.3% to £58.1m, while own label products rose 11.7% to £40.7m. It was a similar picture with biscuits where sales of private label were up 17% to £19.1m, while branded biscuits fell 4.3% to £102m - in a category worth £121.1m but shrinking each year - down 1.5% in 2008.

Although own label biscuits have traditionally been less popular, it seems that convenience shoppers are now much more willing to try them. "Within biscuits, price has become more important with stores needing to be seen to compete with bigger grocery outlets," says Burton's Garfitt. "Pricemarked packs and consumer promotions help this perception."

Chris Webster, director of sales and marketing at sales channel expert Jenks, agrees: "Pricemarked packs are a major part of the offer, giving consumers the confidence that they're not being ripped off."

He believes that many c-store retailers haven't yet cracked the biscuits category. "It is important that retailers offer the right balance between the various biscuit categories (such as everyday, discount, everyday treat and special treat). You can't just go to the cash and carry and pick up packs of digestives and custard creams anymore."

Working with Fox's, Jenks will be talking to independent retailers, offering planogram suggestions through wholesaler publications, trade press and leaflets. He adds: "Biscuits often need better positioning in convenience stores - sometimes they're round the back when they work better next to confectionery."

It seems to have worked for McVitie's, which reports that when its snack packs were merchandised in confectionery, sales grew by 38%.

Or how about cross-merchandising? After all, stocking biscuits near tea and coffee can encourage shoppers to buy both.

Cakes and biscuits may not be growing categories, but let's not forget that most Brits still have a sweet tooth. The major challenge in the short-term is not so much capturing new customers as ensuring that existing ones don't leave the sector altogether or reduce their consumption in favour of other snacks or treats.