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Biscuit and Cake Manufacturers Modify Products to Meet Changes in Demand

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According to the Biscuits & Cakes Market Update 2012, a new report published by the market intelligence provider Key Note, the biscuits and cakes market grew by 4.5% in 2011 to £3.62bn. Biscuits hold a majority share in the industry growing by 6.5% over the year, while the cakes sector increased by 1.1%. Market value rose primarily due to higher input costs and strong demand. On-the-go, sharing and individually-wrapped format innovation drove sales.


Consumers are finding ways to cope with the economic crisis. This means adapting their lifestyles in order to save money. As a result, they are increasingly spending nights at home and taking lunches and snacks with them, when they are out and about. This phenomenon has created a demand for mini sharing formats, which consumers can enjoy when they are entertaining or having a quiet night at home, as well as individually-wrapped products, which they can slip into their bags as a snack or put in their lunchboxes as a dessert. Thus, rather than introducing new products in an already saturated market, manufacturers have been modifying their well-established and much-loved biscuits and cakes to match consumer demand.


Biscuits and cakes are popular in the UK. Growing awareness of the fatty and unhealthy contents of the goods has not stopped consumers from treating themselves. Although healthier biscuits remain the leading segment in the biscuits category, growth has slowed. Meanwhile, seasonal biscuits, special treats and children's biscuits were the fastest growing sectors in 2011. Although consumers tend to be loyal to their favourite biscuit and cake brands, difficult economic times means that they are on the prowl for every bargain they can find, including buying supermarkets' own equivalents. This is putting pressure on manufacturers to promote their goods in order to stay in the game. However, rising input costs means that it is more expensive for manufactures to produce the goods, resulting in lower value sales.


Nevertheless, demand remains high and Key Note anticipates that 2012 will be a good year for manufacturers. They will continue to adapt their products to meet on-the-go convenience, converting them into sharing and individually-wrapped formats, and introducing price-marked packs. Key Note predicts flavour and design innovation in the whole cake, pies and tarts sector, as manufacturers attempt to revive the segment. In addition, biscuit and cake manufacturers will maximise sales during the Olympic and Paralympic Games and for the Queen's Diamond Jubilee, by adapting their products to suit the occasions. Furthermore, they will ignite a new level of dynamism in the industry through interactive campaigns that use social media, like Smartphone applications and Facebook. Based on the current market, Key Note expects the biscuits and cakes market in the UK will be worth £4.78bn by 2016.



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Press enquiries: Jack Sykes at Key Note at or 0845 504 0452. Press/review copies of the report are available on request.