1. Cakes and Cake Bars
UK - June 2011

2. Issues in the market
“More should be done to market the portability of cakes and particularly cake bars, with less than a quarter (24%) of consumers buying multipacks and eating individual cakes/cake bars outside of the home, although over half (54%) believe that cakes/cake bars are suitable for lunch-boxes, suggesting that more prominent merchandising within the lunchbox aisle could help to remind consumers of the category.” – Amy Lloyd
Food and Drink Analyst

3. Issues in the market
Has the trend towards artisan cakes and bakeries contributed to growth in the take-home market?
A high proportion of the interest in cakes and cake bars has been attributed to the recent popularity of more fashionable varieties of cakes such as cupcakes, macaroons and whoopie pies.
This trend originated in home baking and a genuine interest in food and its origins, this has filtered through to other specialist cake shops and retailers such as M&S and the grocers.
How much potential is there for out of home cake consumption?
With just under three fifths (58%) of consumers eating cakes and cake bars as a snack and less than a fifth of consumers doing so out of home or at work, there is ample opportunity to drive out-of-home consumption, especially with men.
How can occasions drive growth?
With venues such as The Ritz leveraging their reputation for afternoon tea, this has helped to drive awareness and popularity of the afternoon tea occasion, suggesting that the habitual nature of it could be brought back into adult life on a more permanent or frequent basis.
Can healthier variants help to broaden the consumer base?
Consumers who are buying low-fat/sugar varieties of cakes and cake bars are biased towards the retired and those in the AB socio-economic group. ABs and the over-55s are expected to see large growth in the UK population over the next five years (the former growing by 6.0% to 14.7 million and the latter by 8.2% to 19.3 million by 2016), boding well for future innovation in the market.
What are the limitations for premiumisation in the market?
Just under a quarter (23%) of consumers agree that they would like to see more premium ingredients such as superfruits or extra chocolate being used in cakes and those with children or living in households of five or more are more likely than average to agree with this statement. This suggests that there is room to improve the healthy positioning of cakes/cake bars with shoppers and particularly parents, hence adding value. .

4. Market drivers – balancing health with indulgence
Consumers are adopting a more moderate approach to eating, balancing health with indulgence and turning away from purely diet options.
Change in agreement with selected lifestyle statements on diet,
Taken from the TGI survey of around 25,000 adults
Source: GB TGI, Kantar Media UK Ltd Q (Oct-Sep)/Mintel
Mintel’s Inspire trend A Simple Balance For Health addresses this change in consumer behaviour, indicating that consumers are moving away from dieting to a more moderate approach to eating and exercise. This shift could help to reinforce the notion that the cake market is one of premium indulgence, rather than one that attempts to balance this positioning with health concerns.

5. Market drivers – propensity to snack provides opportunities
There are an estimated 13 billion at-home and 6 billion on- the-go snacking occasions in the UK per year (see Mintel’s Consumer Snacking – UK, June 2010 report). More than half (58%) of consumers eat/serve cakes/cake bars as a snack (see The Consumer – Occasions section), providing ample opportunity for the cakes and cake bars market.
Less than one fifth of consumers, however, eat/serve cakes/cake bars either as a snack at work or as part of their lunch/packed lunch, with almost one fifth eating them as a ‘snack elsewhere’, the majority eating/serving them at home. Over half (54%), however, believe that cakes/cake bars are suitable for lunch-boxes, suggesting that more prominent merchandising within the lunchbox aisle could help to remind consumers of the category.
Over a quarter of consumers agree that they tend to eat cakes at the weekend, when they can indulge, which is particularly the case for those aged under-35 and in the AB socio-economic group.

6. Market drivers – macro-economic factors
Price inflation has played a role in driving growth in the sector, with soaring cocoa, sugar and wheat prices affecting the market.
The price of cakes and biscuits rose by 10.7% in the 14 months to March 2011, while the cost of food in general rose by 6.3% during this period. Cakes and biscuits saw the largest increase between January and February 2011, with prices rising by 3.7%.
The UK’s grocers have, however, been working hard to keep prices down to ensure that the real inflation rate for core goods has been kept lower than the RPI and CPI, allowing consumers to carry on spending.
RPI detailed indices, biscuits and cakes, January 2010-March 2011
Source: Office for National Statistics/Mintel

7. Companies, brands and innovation
Own-label continues to dominate both in terms of sales and share as consumers look to trade down on price and brands struggle to retain listings in the category. With the category attracting a consumer who is earning a lower income and in the lower socio- economic groups, it is not surprising that own-label has gained traction here.
The cakes and cake bars market is, however, well differentiated by brands. Premier Foods remains the principal branded player in the market, taking around 18% of retail sales by value in Its leading position in the market has been attained through its array of brands including Mr Kipling, Cadbury (which it operates under license) and Lyons, which achieve high levels of trust in the market.
Bite-sized portions remain a strong opportunity in cakes, with mini versions eg Mini Mini Rolls or format variations eg Mini Jaffa Cakes appealing to consumers looking for occasional controlled indulgence and on-the-go snacking.
UK retailers have been quicker off the mark to jump on the trend for whoopie pies and macaroons after being rather slow to capitalise on the popularity of cupcakes. Available in a variety of flavours and colours, such products are proving a fashionable contender to replicating the cupcakes’ success.
As seen in the biscuits market, chocolate confectionary manufacturers are continuing to expand into new territories, with Mars teaming up with McVitie’s Cake Company to launch Twix branded caramel slices, its first foray into the cakes market. It is hoped that the collaboration will attract a younger consumer to caramel slices, which tend to appeal to older consumers, according to McVitie’s.
Brands including Cadbury, Mr Kipling and McVitie’s have been looking to seasonal occasions, with festivals such as Easter, Halloween and Christmas providing ample opportunity for brand/line extensions.

8. Market size & forecast for cakes and cake bars
Estimated at £1.6 billion in 2011, the cakes and cake bars market has grown by 12.4% between 2006 and 2010, although in real value terms the market has seen a fall of 9.5%.
Trading in 2010 has been slower than in 2009 with the cakes and cake bars market seeing less branded NPD activity than the biscuits market and own-label retailer’s turning to fresh and unwrapped cakes as a way to drive interest in the sector.
By 2016 the market is forecast to be worth £1.7 billion.
Cakes and cake bars market size and forecast,
Source: Mintel

9. Market segmentation for cakes and cake bars
The wrapped cakes and cake bars market has struggled to maintain momentum since 2009, with consumers turning away from ambient cakes to unwrapped cakes and other snacking categories.
Small/individual cakes and cake bars are continuing to dominate the market in terms of sales, although the segment has seen a drop in growth owing to a decline in pre-packed cakes and slices.
Large cakes and occasion cakes together represent 39% of the wrapped cakes market and suffer from less frequent usage by consumers.
Unwrapped cakes have gained share, representing 28% of the market in 2010, as consumers, especially women, look for more premium and indulgent snacks.
Value sales of small/individual cakes/cake bars, by type,
2008
2009
2010
% change £m %
Small cakes
302 42
325
335 48
10.9
Slice and Cake Bars
224 31
246 32
170 24
-24.1
Pies and Tarts
105 15
112
125 18 19
Mini Rolls 83 12 85 11 75
-9.6
Total
714
100
768
705
-1.3
Source: Mintel

10. Market share
Own-label continues to dominate the sector with consumers trading do with consumers trading down in the wake of the recession as a means of saving money.
The cakes and cake bars market plays host to a number of major players including Premier Foods and United Biscuits, both being represented by a variety of brands
Manufacturer market share of the wrapped cakes and cake bars market, 2010
*including Greencore, Inter Link Foods and Finsbury Food Group’s brands and licensed products, Memory Cake etc
Source: Mintel estimate
Premier Foods has held onto its dominating share in the branded cakes and cake bars market, representing almost a fifth of value sales.
NPD for Mr Kipling in 2010 included its ice-cream-inspired lines, which targeted the younger consumer and will see the launch of Mr Kipling’s Great British Puds: Spotted Dick Slices; Trifle Bakewells; and Rhubarb & Custard Pies.

11. Brand Research
The cakes and cake bars market is well differentiated by brands. It is a market where different textures, tastes and flavours results in products aimed at different audiences and even different meal occasions. Trust levels range from the high for the market leaders to the low for the niche products.
The bands in this comparison range from the indulgent, chocolate covered (Cadbury) to the low calorie (Weight Watchers) and the free from additives, natural ingredient range of The Fabulous Bakin’ Boys. In between these brands exists the more mainstream ranges from Mr Kipling and McVitie's.
Attitudes towards and usage of cakes and cake bars brands, January 2011
Base: internet users aged 16+ who have heard of the brand and expressed a view
Bubble size represents usage (% ever bought)
Source: GMI/Mintel

12. Consumer usage of cakes and cake bars
Cakes and cake bars eaten or bought in the last 12 months, April 2011
Base: 1,500 internet users aged 16+
More than three in five consumers have eaten/bought cakes and cake bars, with wrapped varieties such as mini rolls the most popular.
Unsurprisingly, large cakes are eaten the least frequently, being more likely than average to be eaten on special occasions eg birthdays.
Cakes and cake bars attract a similar base – women and heavily biased towards the under-35s.
Usage of all types of cakes is skewed towards infrequent use, with the large minority typically eating wrapped/unwrapped cakes/cake bars and large cakes less than once a month. The challenge is therefore to increase regular occasions and broaden the appeal of cakes and cake bars through NPD and to leverage usage of cakes and cake bars as an alternative to other snacks, particularly out of the home and on the go.
Source: Toluna/Mintel

13. Occasions when eating/serving cakes and cake bars
Consumers are most likely to be eating cakes and cake bars as a snack, with half doing so in the home, particularly men, those aged and those with children.
More should be done to market the portability of cakes and especially cake bars, with less than one in five consumers eating cakes/cake bars as an out of home snack.
Eating cakes and cake bars as a treat appeals to over two fifths of consumers, particularly women, providing an opportunity to market the indulgence of the category.
Most popular occasions for eating/serving cakes/cake bars, April 2011
Base: 1,244 internet users aged 16+ who have eaten/bought cake/cake bars in the last 12 months
Source: Toluna/Mintel

14. Consumer behaviour concerning cakes and cake bars
Over half of consumers are adventurous on flavour (particularly the 25-34s) and a third would like to see even more choice, providing opportunities for flavour innovation.
Cost is an issue, with more than half of consumers buying cakes and cake bars on promotion and a fifth switching to buying own-label varieties, especially those on lower incomes.
Consumers are proving willing to forgo health in favour of indulgence, with less than a quarter of consumers buying low-fat/sugar varieties of cakes/cake bars whenever possible.
Statements on purchasing/eating cakes/cake bars, by age, April 2011 
Base: 1,244 internet users aged 16+ who have eaten/bought cake/cake bars in the last 12 months
Source: Toluna/Mintel

15. Consumer attitudes towards cakes and cake bars
Women are more engaged in the cake and cake bars category as they are more likely to be higher frequency users.
Moderate indulgence appeals to the vast majority of consumers eating cakes/cake bars, although half of consumers still perceive the category to be ‘unhealthy’.
Opportunities exist to target the lunch-box market as over half of consumers agree that cakes/cake bars are suitable for this occasion, particularly those working full-time.
Index of agreement with statements on cakes/cake bars, by gender (Average = 100), April 2011
Base: 1,244 internet users aged 16+ who have eaten/bought cake/cake bars in the last 12 months
Source: Toluna/Mintel

16. Amy Lloyd Your contact Food and Drink Analyst mintel.com
mintel.com