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Market Report Plus 2010

Seventeenth Edition March 2010Edited by Dominic Fenn

ISBN 978-1-84729-581-1

Biscuits & Cakes

Biscuits & Cakes Foreword

© Key Note Ltd 2010

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Biscuits & Cakes Contents


Contents

Executive Summary 1

1. Market Definition 2

REPORT COVERAGE.......................................................................................................................2

MARKET SECTORS..........................................................................................................................2Biscuits...............................................................................................................................................2Cakes .................................................................................................................................................2MARKET TRENDS............................................................................................................................3Responses to the Recession..............................................................................................................3Volumes Ahead of Value .................................................................................................................3Miniature Products ...........................................................................................................................3Healthier Products ............................................................................................................................4ECONOMIC TRENDS.......................................................................................................................4Gross Domestic Product....................................................................................................................4Table 1.1: UK Gross Domestic Product at Current andAnnual Chain-Linked Prices (£m), 2004-2008..................................................................................5Household Disposable Income.........................................................................................................5Table 1.2: UK Household Disposable Incomeper Capita (£), 2004-2008 .................................................................................................................6Inflation.............................................................................................................................................6Table 1.3: UK Rate of Inflation (%), 2004-2008 ..............................................................................6MARKET POSITION ........................................................................................................................7The UK...............................................................................................................................................7Table 1.4: UK Expenditure on Food and on Sugar andSweet Products (indices 2005=100), 2005-2009 ..............................................................................7Overseas ............................................................................................................................................7

2. Market Size 8

THE TOTAL MARKET......................................................................................................................8Table 2.1: The UK Market for Biscuits and Cakesby Value (£m at rsp), 2005-2009 ......................................................................................................8BY MARKET SECTOR......................................................................................................................9Biscuits...............................................................................................................................................9Table 2.2: The UK Market for Biscuitsby Value (£m at rsp and %), 2005-2009 ..........................................................................................9



Table 2.3: The UK Market for Biscuits by Sectorby Value (£m at rsp and %), 2009 .................................................................................................10Healthier Biscuits ............................................................................................................................10Chocolate Biscuit Bars ....................................................................................................................11Everyday Treats and Special Treats................................................................................................11Crackers and Crispbreads ...............................................................................................................11Children’s Biscuits ...........................................................................................................................12Savoury Biscuits...............................................................................................................................12Cakes ...............................................................................................................................................12Table 2.4: The UK Market for Ambient Cakesby Value (£m at rsp), 2005-2009 ....................................................................................................12Table 2.5: The UK Market for Ambient Cakes by Sectorby Value (£m at rsp and %), 2009 .................................................................................................13Individual Cakes, Cake Bars, Pies and Tarts...................................................................................13Large/Whole Cakes, Pies and Tarts ................................................................................................13OVERSEAS TRADE ........................................................................................................................14Table 2.6: UK Imports and Exports of Biscuits and Cakesby Value (£000), 2007.....................................................................................................................14

3. Industry Background 15

RECENT HISTORY..........................................................................................................................15

NUMBER OF COMPANIES ...........................................................................................................15Table 3.1: Number of UK VAT- and/or PAYE-based Enterprises Engaged inthe Manufacture of Biscuits, Rusks, Preserved Pastry Goods and Cakesby Turnover Sizeband (£000 and %), 2009 ...................................................................................16EMPLOYMENT ..............................................................................................................................16Table 3.2: Number of UK VAT- and/or PAYE-based Enterprises Engaged inthe Manufacture of Biscuits, Rusks, Preserved Pastry Goods and Cakesby Employment Sizeband (number and %), 2009 ........................................................................17REGIONAL VARIATIONS IN THE MARKETPLACE ....................................................................17DISTRIBUTION...............................................................................................................................17Table 3.3: The UK Market for Biscuits and Cakesby Distribution Channel by Value (%), 2009.................................................................................18HOW ROBUST IS THE MARKET?................................................................................................18LEGISLATION .................................................................................................................................18

KEY TRADE ASSOCIATIONS........................................................................................................19CAOBISCO .......................................................................................................................................19Food and Drink Federation............................................................................................................20

4. Competitor Analysis 21

THE MARKETPLACE .....................................................................................................................21

MARKET LEADERS........................................................................................................................21Burton’s Foods Ltd..........................................................................................................................21Finsbury Food Group PLC ...............................................................................................................22



The Jordans & Ryvita Company Ltd ...............................................................................................22Nestlé UK Ltd ..................................................................................................................................23Northern Foods Grocery Group Ltd...............................................................................................24Premier Foods PLC ..........................................................................................................................24United Biscuits (UK) Ltd..................................................................................................................25Other Companies............................................................................................................................26Bahlsen Ltd......................................................................................................................................26Duchy Originals...............................................................................................................................26Fabulous Bakin’ Boys ......................................................................................................................26Greencore Group............................................................................................................................26Kellogg’s GB....................................................................................................................................26Kraft Foods UK Ltd .........................................................................................................................27Mars UK...........................................................................................................................................27Park Cakes Ltd.................................................................................................................................27Paterson Arran Ltd .........................................................................................................................27The Snack Food Group ...................................................................................................................27Stiletto Foods (UK) Ltd ...................................................................................................................27Thomas Tunnock Ltd ......................................................................................................................27Walkers Shortbread Ltd .................................................................................................................27OUTSIDE SUPPLIERS.....................................................................................................................28

MARKETING ACTIVITY ................................................................................................................28Main Media Advertising Expenditure ...........................................................................................28Table 4.1: Main Media Advertising Expenditure on Biscuits and Cakesby Sector (£000), Years Ending September 2008 and 2009..........................................................28Exhibitions.......................................................................................................................................29

5. Brand Strategy 30

INTRODUCTION ............................................................................................................................30COMPANIES’ BRANDS .................................................................................................................30Budgens...........................................................................................................................................30Burton’s Foods ................................................................................................................................30Cadbury ...........................................................................................................................................30Jammie Dodgers .............................................................................................................................30Maryland Cookies ...........................................................................................................................31Wagon Wheels................................................................................................................................31Duchy Originals...............................................................................................................................31Fabulous Bakin’ Boys ......................................................................................................................31Finsbury Food Group ......................................................................................................................31Thornton’s.......................................................................................................................................31WeightWatchers .............................................................................................................................31Gü ....................................................................................................................................................32The Jordans & Ryvita Company .....................................................................................................32Kellogg’s..........................................................................................................................................32Fibre Plus .........................................................................................................................................32Nutri-Grain ......................................................................................................................................32



Rice Krispies Squares ......................................................................................................................32Kraft Foods......................................................................................................................................32Mikado ............................................................................................................................................32Oreo.................................................................................................................................................33Nestlé...............................................................................................................................................33Breakaway.......................................................................................................................................33KitKat ..............................................................................................................................................33Northern Foods...............................................................................................................................33Fox’s.................................................................................................................................................33Rocky ...............................................................................................................................................33Paterson Arran................................................................................................................................33Premier Foods .................................................................................................................................34Cadbury ...........................................................................................................................................34Mr Kipling .......................................................................................................................................34Traidcraft.........................................................................................................................................34United Biscuits ................................................................................................................................34Go Ahead!.......................................................................................................................................34Jacob’s .............................................................................................................................................35Jaffa Cakes ......................................................................................................................................35McVitie’s Biscuits.............................................................................................................................35McVitie’s Cake Company................................................................................................................35Weetabix .........................................................................................................................................36BRAND ADVERTISING..................................................................................................................36Table 5.1: Main Media Advertising Expenditure on Selected Brandsof Biscuits and Cakes (£000), Year Ending September 2009 ........................................................36Burton’s Foods ................................................................................................................................37Cadbury ...........................................................................................................................................37Jammie Dodgers .............................................................................................................................37Maryland Cookies ...........................................................................................................................38Wagon Wheels................................................................................................................................38The Jordans & Ryvita Company .....................................................................................................38Kellogg’s..........................................................................................................................................38Nutri-Grain ......................................................................................................................................38Kraft Foods......................................................................................................................................38Mikado ............................................................................................................................................38Oreo.................................................................................................................................................38Mars.................................................................................................................................................39Twix .................................................................................................................................................39Northern Foods...............................................................................................................................39Fox’s.................................................................................................................................................39Rocky ...............................................................................................................................................39Premier Foods .................................................................................................................................39Mr Kipling .......................................................................................................................................39United Biscuits ................................................................................................................................39Go Ahead!.......................................................................................................................................40Jacob’s .............................................................................................................................................40



Jaffa Cakes ......................................................................................................................................40McVitie’s Biscuits.............................................................................................................................40Penguin ...........................................................................................................................................40Weetabix .........................................................................................................................................40

6. Strengths, Weaknesses, Opportunities and Threats 41

STRENGTHS....................................................................................................................................41

WEAKNESSES ................................................................................................................................41

OPPORTUNITIES............................................................................................................................42THREATS.........................................................................................................................................42

7. Buying Behaviour 43

CONSUMER PENETRATION.........................................................................................................43Table 7.1: Penetration of Biscuits and Cakes in the Last 12 Monthsby Type of Product (% of adults), March 2008 and 2009.............................................................43By Sex ..............................................................................................................................................43Table 7.2: Penetration of Biscuits and Cakes in the Last 12 Monthsby Type of Product by Sex (% of adults), March 2009 .................................................................44By Age .............................................................................................................................................44Table 7.3: Penetration of Biscuits and Cakes in the Last 12 Monthsby Type of Product by Age (% of adults), March 2009 ................................................................45By Social Grade ...............................................................................................................................45Table 7.4: Penetration of Biscuits and Cakes in the Last 12 Monthsby Type of Product by Social Grade (% of adults), March 2009 ..................................................46

8. Current Issues 47

BRAND ACTIVITY..........................................................................................................................47BakeMark and Lyle’s Golden Syrup Flapjacks ...............................................................................47Dorset Cereals .................................................................................................................................47Furniss of Cornwall .........................................................................................................................47Handmade Cake Company.............................................................................................................47Marmite...........................................................................................................................................47Rootz ...............................................................................................................................................47Sugar Puffs ......................................................................................................................................48Wish 4 Fair Trade ............................................................................................................................48CONSULTATION ON SATURATED FAT AND CALORIES ..........................................................48ETHICAL PALM OIL.......................................................................................................................48



9. The Global Market 50

GLOBAL CONSUMPTION OF BISCUITS AND WAFERS............................................................50Table 9.1: Per Capita Consumption of Biscuits and Wafersin Selected Countries (kilograms), 2005 and 2007........................................................................50CORPORATE DEVELOPMENTS....................................................................................................51Bahlsen (Germany) .........................................................................................................................51Bauli and Nestlé (Italy) ...................................................................................................................51Britannia (India)..............................................................................................................................51Kraft (France) ..................................................................................................................................52Lance and Stella D’oro (US)............................................................................................................52Nestlé...............................................................................................................................................52United Biscuits ................................................................................................................................52

10. Forecasts 53

THE ECONOMY.............................................................................................................................53Gross Domestic Product..................................................................................................................53Table 10.1: Forecast Growth in UK Gross Domestic Productin Real Terms (%), 2009-2013 ........................................................................................................53Inflation...........................................................................................................................................53Table 10.2: Forecast UK Rate of Inflation (%), 2009-2013 ...........................................................54FORECASTS 2010 TO 2014 ..........................................................................................................54Table 10.3: The Forecast UK Market for Biscuits and Cakesby Value (£m at rsp), 2010-2014 ....................................................................................................54FUTURE TRENDS ...........................................................................................................................55Demographics .................................................................................................................................55New Product Formats .....................................................................................................................55Healthy Eating ................................................................................................................................55Resumption of Longer-Term Trends..............................................................................................56

11. Company Profiles 57

Burton’s Foods Ltd..........................................................................................................................58Finsbury Food Group PLC ...............................................................................................................60Nestlé UK Ltd ..................................................................................................................................62Northern Foods Grocery Group Ltd...............................................................................................64Premier Foods PLC ..........................................................................................................................66United Biscuits (UK) Ltd..................................................................................................................68

12. Company Financials 70



13. Further Sources 72

Associations.....................................................................................................................................72Publications.....................................................................................................................................72General Sources ..............................................................................................................................72Government Sources ......................................................................................................................73Key Note Sources ............................................................................................................................73

Understanding TGI Data 76

Number, Profile, Penetration.........................................................................................................76Social Grade ....................................................................................................................................77Standard Region.............................................................................................................................77

Key Note Research 78

The Key Note Range of Reports 79

Biscuits & Cakes


• “Biscuits have seen good growth considering the tough times, as consumers have come home to trusted brands and still see biscuitsas an affordable treat. Half-price, better-than-half-price andround-pound deals have driven sales this year.”

Peter Connell, Trading Manager,Musgrave Retail Partners GB Ltd

The Grocer, 19th December 2009

• “Whilst consumers are still willing to spend in indulgent categories, they are doing so with less frequency than before. In addition, a significantly higher volume is being sold on promotion as retailers seek to attract the consumer.”

Greencore Group PLC

Annual Report and Accounts 2009

• “Consumers realise shopping at the supermarket is cheaper than eating out, so even premium can be value for money. Retailers are now reacting to that and they’re looking for the value-for-money combination of quality and price.”

Mark Bruce, Brands Director,Finsbury Food Group PLC

The Grocer, 17th October 2009

© Key Note Ltd 2010 1

Biscuits & Cakes Executive Summary

Executive Summary

This report examines the UK retail market for biscuits and ambient cakes.Key Note estimates that this market grew each year between 2005 and 2009, to a value of £3.38bn. While the food market as a whole has tended to outperform other sectors during previous recessions, the value increases that have taken place since 2008 have been driven largely by higher costs, feeding through to retail prices. Volume sales have outperformed value.

The squeeze on consumer spending caused by the recession brought with it a focus on price. Although sweet foods are often regarded as affordable indulgences, prices for biscuits and cakes still became more competitive. Discounted prices, extra product free and similar activities allowed consumers to shop across promotions, rather than reinforcing loyalty to particular brands. The successful introduction of tertiary branding and the extension of value own-brand ranges also served to erode price points.

However, suppliers have continued to develop products and brands to add value to the market. Snacking and ‘on-the-go’ eating have remained important influences, with more miniature products being introduced. Individually wrapped products have been created for lunchboxes, snacking and solo eating. There has also been development in ‘sharing’ packs of miniature products, targeting occasions such as the ‘big night in’.

Healthier products account for a large share of sales and there has been further innovation in this sector, with new products introduced under brands such as Go Ahead! and WeightWatchers. Some standard products have also been given healthier recipes through the removal of artificial additives or the substitution of certain ingredients with more wholesome alternatives.

The market continues to be dominated by the brand portfolios of major manufacturers such as United Biscuits, Burton’s Foods and Premier Foods.In 2009, Kraft Foods invested heavily in its Oreo brand, while Nestlé continued to give heavy support to its market-leading KitKat brand. Kellogg’s also widened its branded cereal-bar range during the year.

As the economy emerges from recession and levels of promotion fall off,price points in the biscuit and cakes sector are likely to rise. This will enable further investment in new product development by manufacturers and will form a good basis for a recovery in market values.


Biscuits & Cakes Market Definition

1. Market Definition

REPORT COVERAGE

This report examines the UK market for biscuits and ambient cakes. Fresh, frozen and chilled cakes are excluded from the analysis, as are sales through foodservice outlets; the retail market is the focus of analysis.

Key Note has restated the market sizes within this report as necessary to reflect the most current trade data.

MARKET SECTORS

Biscuits

The biscuits sector has been segmented in line with trade categories,as follows:

• healthier biscuits

• chocolate biscuit bars

• everyday treats

• crackers and crispbreads

• everyday biscuits

• seasonal biscuits

• special treats

• children’s biscuits

• savoury biscuits.

Cakes

The market for ambient cakes is divided into two segments:

• individual cakes, cake bars, pies and tarts

• large/whole cakes, pies and tarts.



MARKET TRENDS

Responses to the Recession

The end of 2008 and the beginning of 2009 saw the transition of the UK economy from credit crunch into full-blown recession. Many retailers, led by Tesco, were quick to introduce tertiary and value brands.

Tertiary branded products are generally those that are offered at price points below standard and premium brands (including retailer own-label products). They are controlled by, and are exclusive to, a particular retailer but carry a non-retailer brand. The tertiary brand offer differs between retailers but it generally centres on grocery lines, including packaged food and household cleaning products. From the end of 2008, Tesco was the main retailer to use this type of branding, with product ranges including Country Barn biscuits.

Other retailers chose to introduce or extend value own labels, offering products at the lowest own-label price points. For example, from March 2009, Waitrose introduced its Essentials brand targeting this market.

During 2009, many retailers extended their value ranges to include a broader portfolio of products, in response to demand from consumers for products in this price tier.

Volumes Ahead of Value

As total consumer spending has fallen, suppliers have been competing harder for a share of this expenditure. In 2009, the emphasis in terms of market share switched to maintaining volumes.

Price-based promotions were widely used, with ‘money off’ offers andprice-marked packaging both promoting stronger value for money. However, this type of activity encourages more promiscuous shopping on the part of consumers. Rather than developing brand loyalty, it can lead consumers to choose from products on promotion, rather than across the full range.

The switch from manufacturers’ brands to own labels, itself a price-based decision, also had the effect of reducing the market’s value. Since the last recession in the 1990s, retailer brands have seen a huge improvement in quality and there is now a wider choice in terms of price points and product ranges. Retailer products have also seen considerable price-based promotion as a way of competing with branded offerings.

Miniature Products

With limited options in terms of increasing the value of sales in the market, suppliers have focused on revamping established brands and extending them with new recipes and formats, rather than introducing new names in a relatively high-risk environment.



One category that has seen activity in both the biscuits and cakes sectors is miniature products. These products effectively target demand for:

• smaller portions

• sharing

• healthier eating

• ‘on-the-go’ consumption.

Miniature products are positioned to compete more directly with confectionery, and some convergence with this sector is occurring as more biscuit and cake brands are sold through impulse outlets, which have traditionally been dominated by confectionery. The portability and portioned nature of these formats also encourages consumers to view products in the confectionery and biscuit/cakes categories interchangeably.

Healthier Products

The trend towards healthy eating has also had an impact on the market.Not only does the healthier-biscuits category remain the largest segment of the biscuits market, but in 2009 product development tended to centre on improving the health credentials of standard brands.

For example, Nestlé relaunched its Breakaway biscuits using 100%wholemeal and oat flour, while Blue Riband, Breakaway, Toffee Crisp and Drifter multipack bars were marketed as containing only 99 calories.

United Biscuits cut the levels of saturated fat in its established Digestives, HobNobs and Rich Tea brands at the end of 2008 and had done so again by the start of 2010. The group also reduced saturated-fat levels in its Go Ahead! and Jacob’s Cream Crackers brands.

With the Food Standards Agency (FSA) turning a spotlight on levels of saturated fat in this category in summer 2009 and due to report back by spring 2010, other suppliers are likely to invest in reformulation.

ECONOMIC TRENDS

Gross Domestic Product

Between 2004 and 2007, the UK’s gross domestic product (GDP) continued to grow both at current prices and in real terms. This fostered a favourable environment for the development of new recipes and brand investment. Product launches centred on the growing segments of indulgence and health.

Growth slowed in 2008 and by early 2009 the UK economy was officially in recession, following a second successive quarter without growth. For thefood market, these difficult conditions were exacerbated by price hikes in response to cost increases in 2007 and 2008.



Biscuits and cakes are relatively low-priced indulgences. However, their market values were adversely affected by heavy price-based competition,as well as the wider introduction of products at lower price tiers.

Household Disposable Income

Household disposable income per capita showed consistent rises between 2004 and 2008, leading to higher spending across the food market as a whole. This was evident in the success of value-added brands in the health, luxury and convenience categories.

In previous recessions, the food market has tended to outperform other markets because consumers cut back in other areas but retain or even increase their spending on food and drink. However, consumers can be more selective in their purchases and cut back in some categories. The major retailers have responded with an increased focus on lower prices.

Table 1.1: UK Gross Domestic Product at Current andAnnual Chain-Linked Prices (£m), 2004-2008

2004 2005 2006 2007 2008

Current prices 1,202,956 1,254,058 1,325,795 1,398,882 1,448,054

% change

year-on-year - 4.2 5.7 5.5 3.5

Annual chain-linked

GDP 1,227,387 1,254,058 1,289,833 1,322,842 1,330,118

% change

year-on-year - 2.2 2.9 2.6 0.6

GDP — gross domestic product

Source: Economic & Labour Market Review, November 2009,National Statistics website © Crown copyright material is reproduced with the permission of the Controller of HMSO (and the Queen’s Printerfor Scotland)



Inflation

Inflation was lower than rises in disposable income between 2004 and 2008. This allowed the population to feel more affluent and subsequently take a more indulgent attitude towards spending. Within the food market, strong competition between the major grocery multiples meant that some sectors actually experienced deflation from year to year.

However, the impact of rising input costs (for ingredients, as well as energy, transport, etc.) began to feed through to the retail sector in 2007/2008. This means that some of the value growth in the food market in 2007 and 2008 was the result of higher prices, rather than increased sales volumes.

In 2009, the growth in price-based deals gave consumers a wider choice in terms of the prices paid for food, including biscuits and cakes.

Table 1.2: UK Household Disposable Incomeper Capita (£), 2004-2008

2004 2005 2006 2007 2008

Household disposable

income per capita (£) 13,078 13,572 13,952 14,331 14,921

% change year-on-year - 3.8 2.8 2.7 4.1

Source: Economic & Labour Market Review, November 2009,National Statistics website © Crown copyright material is reproduced with the permission of the Controller of HMSO (and the Queen’s Printerfor Scotland)

Table 1.3: UK Rate of Inflation (%), 2004-2008

2004 2005 2006 2007 2008

Inflation (%) 3.0 2.8 3.2 4.3 4.0

Percentage point

change year-on-year - -0.2 0.4 1.1 -0.3

Note: inflation is at retail price index (RPI).

Source: Monthly Digest of Statistics, November 2009, National Statistics website © Crown copyright material is reproduced with the permission of the Controller of HMSO (and the Queen’s Printer for Scotland)



MARKET POSITION

The UK

National Statistics data indicate that, at current prices, UK expenditure on sugar and sweet products grew relatively slowly between 2005 and 2007. However, spending rose substantially in 2008 and this trend continued in 2009. The growth in expenditure exceeded that for the food category as a whole from 2007 to 2009, indicating a recovery in market share for sugar and sweet products, following an earlier setback.

Higher values in the sugar and sweet products sector are attributable to a number of factors, including rising input costs. In addition, with total consumer expenditure continuing to rise in 2006 and 2007, as well as in the early part of 2008, there was strong development in premium andhealthier-eating brands, which command higher prices.

In 2009, with the squeeze on spending in more expensive categories, expenditure on relatively low-priced sweet indulgences rose again.

Overseas

The level of overseas trade in biscuits and cakes is low when compared with many other sectors. This is due to limited product life, as well as factors such as country-specific preferences. While the largest established markets are found in major Western economies, growth is evident in other markets, such as India, the Middle East, the Far East and Eastern Europe.

Table 1.4: UK Expenditure on Food and on Sugarand Sweet Products (indices 2005=100), 2005-2009

2005 2006 2007 2008 e2009

Food 100 103 108 118 123

Sugar and sweet products 100 99 102 108 120

e — Key Note estimates

Source: Key Note, based on data from Consumer Trends Q3 2009,National Statistics website


Biscuits & Cakes Market Size

2. Market Size

THE TOTAL MARKET

In 2009, the UK market for biscuits and cakes was worth an estimated £3.38bn, having grown consistently year-on-year since 2005.

A number of factors have influenced the performance of the biscuits and cakes market, some positively and others less so:

• The recession has contributed to higher volumes in some categories of biscuits and cakes. With a downturn in spending on big-ticket items, consumers have looked to relatively inexpensive indulgences such assweet foods.

• Trading down from dining out to eating in, and the general trend from going out to staying at home, has boosted expenditure on some foods.

• The popularity of the ‘big night in’ has also helped sales of ‘sharing’ products, such as tubs and bags of biscuits and miniature cakes, as well as more traditional formats such as tins of biscuits.

• Lower out-of-home spending has meant more use of home-prepared lunchboxes, often including sweet products such as biscuits and cakes. Consumers have looked to spend their food budgets more effectively.

• Consumers have also engaged in more planned eating of products by stocking up on multipacks, rather than spending on impulse.

• Inflationary pressures on costs, including ingredients, energy and transport, have filtered through to the retail market, pushing up values.

Table 2.1: The UK Market for Biscuits and Cakesby Value (£m at rsp), 2005-2009

2005 2006 2007 2008 2009

Biscuits 1,649 1,706 1,804 1,975 2,145

Cakes 1,036 1,075 1,139 1,190 1,235

Total 2,685 2,781 2,943 3,165 3,380


rsp — retail selling prices

Source: Key Note



BY MARKET SECTOR

Biscuits

The biscuits sector saw relatively strong growth in value between 2005 and 2009, particularly in the last 2 years of the period, when the annual increase exceeded 8%. In 2009, the sector was worth an estimated £2.15bn.

Volume growth in the biscuit category in 2009 was positive, but this was largely driven by price-based promotions. Discounts and extra product free were used to stimulate and maintain consumer interest in the category. As a result, the value growth that took place in the market was driven by rising costs, rather than increased volumes or added product value.

The lack of true value growth also limited the opportunities for investmentin new product development. Although there was some innovation in the market, the majority of product investment was focused on revamps and relaunches, rather than entirely new brands.

Table 2.2: The UK Market for Biscuitsby Value (£m at rsp and %), 2005-2009

2005 2006 2007 2008 2009

Value (£m at rsp) 1,649 1,706 1,804 1,975 2,145


Sector share of

total market (%) 61.4 61.3 61.3 62.4 63.5


Source: Key Note



Healthier Biscuits

The healthier-biscuits segment comprises:

• reduced-fat, reduced-calorie biscuits, such as those marketed under theGo Ahead! and WeightWatchers brands

• cereal bars.

Healthier biscuits is a growing sector of the market, as consumers look for better-for-you alternatives. Retailer own labels, such as Sainsbury’s Be Good to Yourself and Tesco’s Healthy Eating, have an important position in this category, alongside the manufacturers’ brands.

In 2009, healthier biscuits remained the leading segment of the biscuits market. However, volumes were down; the value of sales was instead boosted by inflationary price increases. Go Ahead!, from United Biscuits, was among the brands that introduced new products and recipes. With many diets and healthy-eating plans being abandoned as a result of boredom, innovation is important in maintaining interest in the category.

Table 2.3: The UK Market for Biscuits by Sectorby Value (£m at rsp and %), 2009

Value

(£m at rsp) % of Total

Healthier biscuits 448 20.9

Chocolate biscuit bars 371 17.3

Everyday treats 268 12.5

Crackers and crispbreads 260 12.1

Everyday biscuits 232 10.8

Seasonal biscuits 197 9.2

Special treats 167 7.8

Children’s biscuits 112 5.2

Savoury biscuits 90 4.2

Total 2,145 100.0


Source: Key Note



Sales growth in the cereal-bars sector slowed in 2009. These products have achieved annual growth for a number of years because they are regarded by many consumers as a healthy option for snacking. The high level of branding in the sector also means that it is heavily supported in terms of advertising and promotion. The heavyweight brands are led by the breakfast-cereal supplier Kellogg’s, which offers a range of cereal-bar products, including Special K bars, Nutri-Grain and Rice Krispies Squares.

Chocolate Biscuit Bars

Chocolate biscuit bars include some major and heavily supported brands,such as KitKat from Nestlé, Twix from Mars, Rocky from Fox’s and Penguin from United Biscuits. Multipacks, bought largely for use as snacks and in lunchboxes, account for the majority of sales.

Sales of chocolate biscuit bars have suffered in the face of competition from lower-fat and lower-sugar snacking and lunchbox options. However, the drive within healthy eating, particularly for children’s lunchboxes, is to offer something that will actually be consumed, rather than discarded. There has been some amelioration in standard brands — for example, the introduction of wholemeal flours in Nestlé’s Breakaway and the relatively low calorie levels advertised by that supplier’s multipack products.

Everyday Treats and Special Treats

Everyday treats is among the most exposed categories in the biscuits market, containing a significant proportion of high-sugar, high-fat products, yet lacking strong ‘treat’ positioning to compensate for this.

Special treats include premium-recipe biscuits under brands such as Fox’s Temptations, McVitie’s Moments and Cadbury’s Luxury Cookies.

Treat biscuits were among the categories to gain in 2009, as consumers looked for value-for-money indulgences. Volume gains were also made as a result of promotions across the category. Brand investment was a factor in keeping product profile high, with activity including advertising for Fox’s range, featuring its brand ambassador Vinnie the Panda. There was also some product innovation, such as a new recipe for Maryland cookies, incorporating golden syrup as an ingredient across the portfolio.

Kraft has been investing strongly in the UK biscuits category, in a bid to develop its Oreo brand into the market leader. In 2009, a chocolate cream variant was introduced, extending the brand’s presence. Products were also extended into sharing tubs and multipacks for lunchboxes and snacking.The Mikado brand was another introduction by Kraft during the year.

Crackers and Crispbreads

Crackers and crispbreads are generally purchased to act as an accompaniment to other foods, although there has been some innovation in the market, with a wider range of recipes allowing some products to be eaten on their own, for more casual eating occasions. Major brands include Jacob’s and Ryvita.



Children’s Biscuits

The children’s biscuits sector comprises products developed specifically for children, such as Wagon Wheels and Jammie Dodgers. However, children actually consume across a considerably broader portfolio of products.

The main trend in this sector has been a shift towards portioned products with individual wrapping. These offer portability as well as portion control.

Savoury Biscuits

Savoury biscuits are non-sweet biscuits that offer more flavour than standard crackers and thus can be eaten on their own. The leading brands include McVitie’s Cheddars. There has been some crossover with the crackers and crispbreads sector, where more recipes are incorporating added ingredients to offer stand-alone eating, rather than just an accompaniment.

Cakes

Ambient cakes experienced a slowdown in value growth in 2009, but the sector still increased by 3.8%, to a value of £1.24bn. As in many other sectors of the food market, suppliers opted to focus on preserving volume sales through price-based promotions, rather than committing to high-risk new brand or product development.

The ambient-cakes sector is vulnerable to strong competion from fresh and frozen cakes — not only family-sized products, but also individual portions. The frozen sector, in particular, has seen higher sales during the recession, because this format is viewed as offering value for money. In addition,frozen-cake recipes can be considerably more sophisticated than those for ambient cakes, incorporating ingredients such as cream and fruit.

Table 2.4: The UK Market for Ambient Cakesby Value (£m at rsp), 2005-2009

2005 2006 2007 2008 2009

Value (£m at rsp) 1,036 1,075 1,139 1,190 1,235


Sector share of

total market (%) 38.6 38.7 38.7 37.6 36.5


Source: Key Note



Individual Cakes, Cake Bars, Pies and Tarts

The trend towards smaller cakes and individual products continued in 2009. These products better serve demand for single servings and ‘on-the-go’eating occasions, as well as portion control. In addition, one of the issues facing the ambient-cake market has been the ageing nature of its buying base. Newer formats can address a younger market.

With the trend towards smaller households and staggered eating times, family-sized cakes and pies have become purchases for more formal eating occasions. Smaller products address wider needs without concerns such as portion control and the retention of freshness.

In 2009, new introductions of individually portioned products included Cadbury Mini Bakes.

Large/Whole Cakes, Pies and Tarts

Large/whole cakes, pies and tarts have seen declining sales for a number of reasons. The success of the frozen-desserts market, which offers a range of products from value to patisserie brands, has increased the competitive pressure. The relatively high fat and calorie content of pastry-based products has deterred some buyers, and there has also been some crossover from family-sized products to small and individual products, as noted above.

Celebration cakes have taken a greater market share as a result of the decline in home baking, as well as the successful use of brands and licensing.

Table 2.5: The UK Market for Ambient Cakes by Sectorby Value (£m at rsp and %), 2009

Value

(£m at rsp) % of TotalIndividual cakes, cake bars,

pies and tarts† 815 66.0

Large/whole cakes, pies and tarts 420 34.0

Total 1,235 100.0


† — includes multipacks as well as individually wrapped items

Source: Key Note



Spending on premium cakes has been adversely affected by the recession, with price points being brought down in response to demand for lower-cost products. In addition, some consumers are opting to trade down from premium to standard. For larger products, the difference in price between the tiers is more marked than is the case for smaller or individual cakes.

OVERSEAS TRADE

The UK market for both cakes and biscuits is relatively self-sufficient, with overseas trade accounting for a minority share of sales. Overall, however,the UK remains a net importer of products. This reflects the international nature of major players such as United Biscuits and Bahlsen.

Biscuits see a much higher level of overseas trade than cakes, partly because of the products’ longer shelf lives.

Table 2.6: UK Imports and Exports of Biscuitsand Cakes by Value (£000), 2007

Imports Exports

Intra-EU Extra-EU Intra-EU Extra-EU

Biscuits† 631,355 34,467 263,812 107,206

Cakes‡ 160,427 12,193 62,464 4,936

† — biscuits, rusks, preserved pastry goods and cakes

‡ — cakes and pastry products, and other bakers’ wares, with added sweetening matter, excluding biscuits, crispbread, gingerbread, etc.

Source: Product Sales and Trade PRA15810 (Bread, Fresh Pastry Goods & Cakes) and PRA15820 (Rusks & Biscuits, Preserved Pastry Goods & Cakes), National Statistics website © Crown copyright material is reproduced with the permission of the Controller of HMSO (and the Queen’s Printer forScotland)


Biscuits & Cakes Industry Background

3. Industry Background

RECENT HISTORY

The biscuits and cakes market saw significant development from the late 1990s onwards. The food market as a whole weathered the recession of the early to mid-1990s well and emerged in a relatively strong position for continued growth. With higher levels of consumer disposable income,added-value products saw the highest level of innovation. Product development had three main drivers: premium, health and convenience.

More products were introduced at the highest price tier, with an emphasison the quality of ingredients and recipes. This was aided by the investment made by the multiple retailers in their own premium brands, such as Taste the Difference from Sainsbury’s and Finest from Tesco.

Interest in healthy eating fuelled the development of brands such as WeightWatchers and Go Ahead!, as well as retailers’ own labels. It also contributed to increasing sales of organic biscuits and cakes.

Changing eating trends, including eating on the go, snacking and staggered eating occasions, gave rise to a need for more portioned products and resealable product packaging. This added value to the market.

Other influences, such as Fairtrade ingredients and functional recipes, also fuelled development in some areas of the market.

NUMBER OF COMPANIES

The manufacturing base for biscuits in the UK is fairly small, comprising just 215 VAT- and/or PAYE-based enterprises in 2009, according to National Statistics. Of these, the majority are small to medium-sized, with annual turnovers of less than £1m. Many of these smaller groups focus on local distribution or a relatively narrow product range.

The cost of financing successful national brands acts as a considerable barrier to growth for many companies. The major biscuit brands are backed by large companies that offer a high level of support for their portfolios — not only through formal marketing but also through price offers and relaunches.



EMPLOYMENT

In terms of employment, the industry is dominated by smaller operations:in 2009, only 18.6% of UK VAT- and/or PAYE-based enterprises employed100 or more staff. The manufacture of most products is process based and,as such, is likely to be plant intensive rather than labour intensive.

Table 3.1: Number of UK VAT- and/or PAYE-basedEnterprises Engaged in the Manufacture of

Biscuits, Rusks, Preserved Pastry Goods and Cakesby Turnover Sizeband (£000 and %), 2009

Number ofEnterprises % of Total

Turnover (£000)

0-49 10 4.7

50-99 30 14.0

100-249 40 18.6

250-499 20 9.3

500-999 25 11.6

1,000-4,999 45 20.9

5,000+ 45 20.9

Total 215 100.0

Source: UK Business: Activity, Size and Location, National Statistics website © Crown copyright material is reproduced with the permission of theController of HMSO (and the Queen’s Printer for Scotland)/Key Note



REGIONAL VARIATIONS IN THE MARKETPLACE

There is little evidence of regional variations in the market for biscuits and cakes. Products are pre-packaged and relatively low in price, meaning that they can be sold through a variety of retailers, from small to large.

DISTRIBUTION

Sales of biscuits and ambient cakes continue to be dominated by the multiple grocers. These outlets are tailored towards current grocery-shopping habits, and the large store format allows a wide range of products and brands to be stocked. In addition, the supermarkets have been active in developing the supply of products through their own-label ranges.

The march of the multiples into the convenience-store format has further reinforced their position. For example, in January 2010, Sainsbury’s listed525 large stores and 303 convenience stores on its website.

Table 3.2: Number of UK VAT- and/or PAYE-basedEnterprises Engaged in the Manufacture of

Biscuits, Rusks, Preserved Pastry Goods and Cakesby Employment Sizeband (number and %), 2009

Number ofEnterprises % of Total

Number of Employees

0-4 70 32.6

5-9 30 14.0

10-19 25 11.6

20-49 35 16.3

50-99 15 7.0

100-249 20 9.3

250+ 20 9.3

Total 215 †100.0

† — does not sum due to rounding

Source: UK Business: Activity, Size and Location, National Statistics website © Crown copyright material is reproduced with the permission of theController of HMSO (and the Queen’s Printer for Scotland)/Key Note



The growing range of products available in single- and twin-serve formats, such as bagged miniature biscuits, single wrapped muffins and similar products, has also meant that biscuits and cakes can now be listed alongside other ‘eat now’ and snacking items in a range of impulse outlets, from petrol forecourts to confectioner/tobacconist/newsagents (CTNs).

HOW ROBUST IS THE MARKET?

The retail market for biscuits and cakes is very robust. Food scares have largely bypassed the sector and the wide range of products and brands means that suppliers can target changing trends effectively.

Arguably the greatest threat to the biscuits and cakes sector comes from the health lobby. Products in this category are traditionally high in sugar and fat, including saturated fat, and the UK public are continually informed of the need to reduce their intake of ‘treat’ products. For many people, however, these products remain everyday foods, rather than an occasional indulgence. Even so, suppliers are taking a pro-active approach by offering healthiersub-brands and improving the health profile of standard products.

LEGISLATION

The main laws applying across the food industry are as follows:

• Food Safety Act 1990 (as amended) — provides the framework for all food legislation in Great Britain. Similar legislation applies in Northern Ireland.

• General Food Law Regulation (EC) 178/2002 — European Commission legislation on general food safety.

• General Food Regulations 2004 (as amended) — provides for the enforcement of certain provisions of Regulation (EC) 178/2002 (including the imposition of penalties) and amends the Food Safety Act 1990 to bring it in line with Regulation (EC) 178/2002.

Table 3.3: The UK Market for Biscuits and Cakesby Distribution Channel by Value (%), 2009

Multiple grocers 80

Symbol groups and independent retailers 7

Others 13

Total 100

Source: Key Note



More detailed legislation includes the following:

• Colours in Food Regulations 1995 and amendments: 2000 and 2001

• Consumer Protection Act 1987

• Contaminants in Food (England) Regulations 2003

• Flavourings in Food Regulations 1992

• Food Additives Regulations 1992

• Food Labelling Regulations 1996

• Food (Lot Marking) Regulations 1996

• Food Premises Registration (Amendment) Regulations 1997

• Food Standards Act 1999

• General Product Safety Regulations 1994

• Imported Food Regulations 1997

• Materials and Articles in Contact with Food Regulations 1987

• Miscellaneous Food Additive Regulations 1995 and amendments: 1995, 1999, 2001 and 2003

• Organic Products (Imports from Third Countries) Regulations 2003

• Organic Products Regulations 2001

• Sweeteners in Food Regulations 1995 and amendments: 1996, 1997, 1999, 2001, 2002 and 2003

• Trade Descriptions Act 1968

• Weights & Measures Act 1988.

KEY TRADE ASSOCIATIONS

CAOBISCO

CAOBISCO is the association of the chocolate, biscuit and confectionery industries of the EU. Its members come from the EU, with two non-EU observer members (Switzerland and Norway).

CAOBISCO outlines its tasks and objectives as follows:

• to obtain and relay to its members information on any new project or initiative of interest to its industries



• to advise and inspire the policymakers responsible for Community and international legislation with an impact on its economic environment, based on argumentation and positions drawn up by the experts on its various committees

• to work closely and actively with other organisations on dossiers of common interest, to guarantee a consistent legislative framework, propitious to the development of its industries

• to promote the image of its industries as being responsible and law abiding and to maintain the confidence of the authorities and the consumer

• to defend the principles of fair competition and industrial ethics

• to encourage and promote the spirit of co-operation and solidarity among its members and national representatives.

CAOBISCO also compiles and publishes annual statistical data on its sectors.

Food and Drink Federation

The Food and Drink Federation acts as the voice of the UK food and drink industry, the largest manufacturing sector in the country. Its membership comprises manufacturers of all sizes, as well as trade associations dealingwith specific sectors of the industry.

The Federation helps its members to operate in an appropriately regulated marketplace to maximise their competitiveness. It communicates the industry’s values and concerns to the Government, regulators, consumers and the media. The organisation also works in partnership with key players in the food chain to ensure that food is safe and that consumers can trust it.


Biscuits & Cakes Competitor Analysis

4. Competitor Analysis

THE MARKETPLACE

The UK market for biscuits and ambient cakes is dominated by the largest companies, which offer a number of major brands and sub-brands. Retailer own-label products also account for a substantial share of sales. Since the beginning of the 2000s, some smaller companies have made headway in particular areas of the market, such as organics.

MARKET LEADERS

Burton’s Foods Ltd

Company Structure

Burton’s Foods Ltd supplies branded and own-label biscuits. The brands supplied by the company include Maryland Cookies, Viscount, Jammie Dodgers, Edinburgh Bakery and Wagon Wheels. The group also supplies biscuits under licence for the Cadbury and Bertolli brands.

Burton’s Foods was bought by the private-equity group Duke Street Capitalin March 2007. In September 2009, the group came under the management of Canadian Imperial Bank of Commerce and Apollo Global Management, with a minority stake for Duke Street, following a debt-for-equity swap.

Current and Future Developments

Burton’s launched a new Out of Home Snacking division in November 2009. The operation deals specifically with the foodservice snack market. New product formats have been designed for distribution via hotels, business and industry, vending machines, pubs, and travel and leisure outlets.

In December 2009, Burton’s Foods appointed the branding agency LFH to handle all stages of its packaging design and production. The arrangement covers a 2-year period and aims to ‘maximise cost savings’ for Burton’s.

Financial Results

Burton’s Foods Ltd reported a turnover of £301m and a pre-tax profit of £6.4m for the 53 weeks ending 3rd January 2009.



Finsbury Food Group PLC

Company Structure

Finsbury Food Group PLC supplies a range of premium and celebration cakes, low-fat cake slices and speciality, organic and gluten-free breads.

The main cake-making subsidiaries are: Memory Lane, which suppliesown-label cakes; California Cake Company, offering low-fat and standard slices; and Campbell’s Cakes, which supplies cold set products. The group supplies cakes for Tesco’s Finest and Sainsbury’s Taste the Difference ranges.

Finsbury Foods acquired Yorkshire Farm Bakery, a specialist in gluten-free products, in April 2008. It also gained A&P Foods, a premium cake manufacturer, as part of the deal. During 2008, the group restructured, creating three distinct divisions: Cake, Bread and Free From.

According to Finsbury Food Group’s 2009 annual report, own-label products account for around 70% of the company’s total revenue. However, there has been an increase in sales of branded products.


In June 2009, Finsbury Food Group acquired Goswell Enterprises for £2.2m. The target company supplies speciality brands, including Vogel and Cranks,to UK multiple retailers.

For the year ending 30th June 2009, Finsbury Food Group reported a 2% rise in like-for-like sales, with a £5m drop in adjusted pre-tax profit. The company attributed the fall to a difficult trading environment and the costs associated with reorganising the business.

In a trading update published in November 2009, Finsbury stated that itscake sales were down by 6% for the 17-week period to the end of October. The company attributed the dip to the impact of the recession on consumer behaviour and its effect on sales of premium ranges.

Financial Results

Finsbury Food Group PLC reported a turnover of £178.9m and a pre-tax profit of £1.8m for the 53 weeks ending 4th July 2009.

The Jordans & Ryvita Company Ltd

Company Structure

In June 2008, it was announced that the cereal and cereal-bar supplierW Jordan was to merge with The Ryvita Company Ltd, a subsidiary of Associated British Foods PLC and the supplier of a range of crispbreads and rice cakes under the Ryvita brand.

Associated British Foods took a 20% stake in Jordans in 2007 and has a 62% interest in the joint business, The Jordans & Ryvita Company Ltd.




In June 2009, Ryvita appointed Grey London to handle its £3m advertising account.

Commenting on performance over the year to September 2009, Associated British Foods PLC stated that it had successfully integrated Jordans Cereals and Ryvita into a single business. Ryvita continued to perform well, with good year-on-year sales growth in its core crispbread business. Jordans’ trading improved during the year, after a slow start, with growth achieved in most of its key branded lines.

Financial Results

The Ryvita Company Ltd (as the firm was named at that time) reported a turnover of £52.3m and a pre-tax profit of £7.2m for the year ending13th September 2008.

Nestlé UK Ltd

Company Structure

Nestlé UK Ltd is a subsidiary of the Swiss company Nestlé SA, which isinvolved in many categories of the retail food and drink market. In the biscuits sector, the company supplies the leading chocolate biscuit brand,KitKat, as well as Blue Riband and Breakaway.


In 2009, Nestlé invested £24m in advertising across the KitKat portfolio,to achieve sales of more than £100m. Sales of the two-finger variant were worth more than £91m during the year, according to the group. Marketing expenditure for the KitKat brand in 2010 will be more than £25m.

Nestlé said that sales of confectionery, including brands such as KitKat, rose by 4% on an organic basis during the first 9 months of 2009. The group reported some ‘softness’ in growth for biscuits and sugar confectionery, but the chocolate business continued to make good progress.

In January 2010, Nestlé confirmed that it plans to invest £15m to upgrade its York wafer factory over a 3-year period. The wafer is used in the production of KitKat. The group also expects to reduce carbon emissions by 60% and cut gas consumption by 30% through the investment.

Financial Results

Nestlé UK Ltd reported a turnover of £1.38bn and a pre-tax profit of £48.5m for the year ending 31st December 2008.



Northern Foods Grocery Group Ltd

Company Structure

Northern Foods Grocery Group Ltd, a subsidiary of Northern Foods PLC, includes the Fox’s Biscuits operation, which supplies brands such as Creations, Echo and Rocky.


In September 2009, Northern Foods recruited a new in-house marketingteam for the Fox’s biscuit brand. The previous month, the group awarded its media-planning and media-buying business to MediaCom.

In November 2009, Northern Foods announced a new strategic plan, Project Golden. The strategy is to be introduced in two phases, in response to the recession. The aim is to produce more in the Fox’s biscuits range, cut costsand allow the company to innovate. The group reported that it had been unable to meet demand for some lines, which limited the scope of brand development. The plan involves a £26.5m investment in extending robotic production and packing at the company’s three biscuit plants in Uttoxeter, Kirkham and Batley.

Reporting on performance for the half year ending 26th September 2009, Northern Foods stated that total sales were flat, with a 2% rise in operating profit. In the biscuits division, brand share for Fox’s was at its highest level since 2006. This was attributed to the success of the brand’s character-led advertising, featuring Vinnie the Panda.

Financial Results

Northern Foods Grocery Group Ltd reported a turnover of £184.6m and apre-tax profit of £9m for the year ending 28th March 2009.

Premier Foods PLC

Company Structure

Premier Foods PLC is engaged in the manufacture and marketing of ambient grocery products for major multiple retailers, cash-and-carry outlets, convenience stores and foodservice operators.

In December 2006, the company acquired RHM, the owner of Avana Bakeries (which supplies whole cakes) and Manor Bakeries (which supplies a range of ambient cake brands, including Mr Kipling and Cadbury cakes). RHM also supplied the Delightful lighter cake.

Premier Foods implemented a new divisional structure with effect from1st January 2008. Three divisions were formed: Grocery, Hovis and Chilled & Ireland.




From autumn 2009, Premier Foods undertook a raft of activity and launches targeting a ‘lost generation of consumers’. The group said that it aimed tore-engage lapsed consumers. The first of the new product launches was Inspirations, a range of small cakes.

Premier reported that the Mr Kipling brand gained market share during the half year ending 27th June 2009, particularly for seasonal products.

In 2010, Premier’s new product development will focus on wrapped cake bars. According to Versha Patel, the company’s head of category:

“We have a lot of exciting stuff in the pipeline, including strong lunchbox lines. At the back end of 2010 we also expect to see indulgence creeping back in, with people extending their repertoire and adding more indulgent treats.”

Financial Results

Premier Foods PLC reported a turnover of £2.6bn and a pre-tax loss of £403.9m for the year ending 31st December 2008.

United Biscuits (UK) Ltd

Company Structure

United Biscuits (UK) Ltd owns the market-leading McVitie’s biscuit brand, which includes products such as Rich Tea, Digestives and HobNobs. The McVitie’s Cake Company makes a range of eat-now cakes, including those under the Jaffa Cakes brand. The group also supplies Masterfoods-branded products such as Galaxy Muffins and M&M Brownies under licence.

In October 2006, Blackstone Group and PAI Partners acquired the UK and Northern European business of United Biscuits.


In November 2009, United Biscuits announced that it was to invest over £2m at its site in Aintree, Merseyside, where it plans to open a Centre of Excellence for cracker production. The site will boost the firm’s output of crackers and will also create facilities to produce McVitie’s Jaffa Cake bars.

United Biscuits reported ‘modest’ profit growth in 2008, stating that markets were affected by high raw-material costs. Reporting on the first 6 months of 2009, the group claimed that it had made a good start to the year.

Financial Results

United Biscuits (UK) Ltd reported a turnover of £999.4m and a pre-tax profit of £60.9m for the 53 weeks ending 3rd January 2009.



Other Companies

Bahlsen Ltd

Bahlsen Ltd is a subsidiary of the German group Bahlsen GmbH & Co KG.The company imports and sells high-quality biscuits, cakes and snacks. The brands it supplies include Choco Leibniz, First Class and Messino.

In 2009, Bahlsen undertook a raft of new advertising for its Messino brand.

Duchy Originals

Duchy Originals is a premium organic-food brand. The brand offers three biscuit ranges: chocolate, sweet and savoury. These encompass a variety of products, including milk chocolate butterscotch biscuits, a chocolate biscuit selection, shortbread and oaten biscuits.

In September 2009, Duchy Originals went into partnership with the Waitrose supermarket chain. Under the agreement, the retailer gained the exclusive right to originate, manufacture, distribute and sell Duchy Originals products in the UK. Waitrose aims to expand the range from 200 products to around 500 and will pay a royalty to Duchy Originals on all wholesale and retail sales.

Fabulous Bakin’ Boys

Fabulous Bakin’ Boys supplies a range of small cakes, muffins, cookies and similar products. At the end of 2008, a range of king-size cakes were added to the cupcake range, achieving sales of £3m in their first 6 months.

In 2009, a new impulse format and new flapjack recipes were introduced.

Greencore Group

Greencore Group of the Republic of Ireland is a major supplier of everyday and celebration cakes to the retailer own-label market.

Greencore claims the leading position in the Christmas cake market, producing more than 4 million seasonal cakes each year.

Commenting on the results for the Cakes & Desserts business in its 2009 annual report, Greencore stated that consumers were spending less frequently in the category and were buying more on promotion.

Kellogg’s GB

Kellogg’s is best known for its range of breakfast cereals. However, it has extended many of these brands, including Special K and Crunchy Nut Corn Flakes, into the cereal-bar category. The group also supplies the Nutri-Grain range of breakfast bars.

In 2009, Kellogg’s reported a strong rise in sales for its Rice Krispies Squares brand, as well as for Special K cereal bars.



Kraft Foods UK Ltd

Kraft Foods acquired the Ritz cracker and Oreo cookies brands in 2006.

In October 2009, it was announced that Kraft Foods is to invest £13.9m in a new biscuit research and development (R&D) centre. The new facility will focus on new product development for brands including Oreo, Prince, Saiwa and TUC. The centre will be sited in Saclay, France, and will open in 2011.

Mars UK

Mars UK, part of the US-based Mars Incorporated, supplies Twix, a leading chocolate biscuit bar, and Tracker cereal bars.

Park Cakes Ltd

Park Cakes Ltd supplies own-label products to Marks & Spencer, as well as a small branded range under the Park Cakes label. The group was acquired from Northern Foods by Vision Capital in 2006, for £160m.

Paterson Arran Ltd

Paterson Arran Ltd owns the Bronte biscuits brand and the Paterson shortbread and oatcake label.

The Snack Food Group

The Snack Food Group supplies cakes and muffins under brands such asAbbey and Handmade Flapjack Co. In January 2004, the Group merged with the Cookie Coach Company.

Stiletto Foods (UK) Ltd

Stiletto Foods (UK) Ltd supplies the Mrs Crimble’s range of wheat-free, gluten-free and dairy-free cakes and biscuits.

Thomas Tunnock Ltd

Thomas Tunnock Ltd offers a range of chocolate biscuit brands, including Tunnock’s Teacakes, Caramel Wafer and Snowballs.

Walkers Shortbread Ltd

Walkers Shortbread Ltd manufactures a range of biscuit and cake products, including Shortbread and Fruit Cakes. The group supplies products under the Walkers brand, as well as making products for Duchy Originals.

New biscuits were introduced under the Duchy Originals label in 2009.



OUTSIDE SUPPLIERS

The biscuits and cakes sector has a range of external suppliers. Primary ingredients are bought directly or through brokers and agents. A number of major food manufacturers, including Dairy Crest and Kerry Foods, also have interests in supplying products for use as ingredients.

As in many other sectors of the food market, biscuits and cakes are manufactured through capital-intensive, rather than labour-intensive, processes: production-line technology is the key basis for many operations. These facilities are supplied by specialist providers of processing and packaging machinery. Packaging is a key aspect of product design.

Tertiary suppliers of services include design and marketing consultants, logistics suppliers, and advertising and public-relations (PR) agencies.

MARKETING ACTIVITY

Main Media Advertising Expenditure

In the year ending September 2009, main media advertising expenditure on biscuits and cakes increased by 8.3%, to £34.2m. The biggest rise was in the crispbreads and crackers sector, boosted by £3m of expenditure on Kellogg’s Special K Mini Breaks (see Table 5.1, in Chapter 5 — Brand Strategy).

In addition to formal advertising, substantial promotion was carried out in stores in 2009, in the form of price-based offers. Investment was also made in other types of marketing, such as websites.

Table 4.1: Main Media Advertising Expenditureon Biscuits and Cakes by Sector (£000), Years Ending

September 2008 and 2009

% Change2008 2009 2008-2009

Cereal bars 12,286 13,298 8.2

Biscuits 12,219 12,739 4.3

Crispbreads and crackers 4,197 6,377 51.9

Cakes and fruit pies 2,856 1,749 -38.8

Total 31,558 34,163 8.3

Source: Nielsen Media Research



Exhibitions

There are a number of exhibitions, both domestic and international, that may be attended by confectionery groups. They include the following:

• Food and Drink Expo — will be held at the National Exhibition Centre (NEC) in Birmingham between 21st and 24th March 2010.

• ISM (‘the world’s biggest confectionery trade fair’) — scheduled to take place in Cologne, Germany, between 30th January and 2nd February 2011.

• IFE (‘the international food and drink event’) — will be held between 13th and 16th March 2011, at ExCeL in London.

• Anuga (an international food fair) — scheduled to take place in Cologne, Germany, between 8th and 12th October 2011.


Biscuits & Cakes Brand Strategy

5. Brand Strategy

INTRODUCTION

Branding is a major feature of the biscuits and cakes market. However,many new products from current players take the form of extensions of established brands, rather than completely new names. This offers a more sheltered entry to the market: products have a head start in terms of consumer familiarity. This type of brand activity has also paid other dividends: it simplifies marketing activity, with fewer names to be promoted.

COMPANIES’ BRANDS

Budgens

In 2009, Budgens revamped its premium bakery and cakes range. Products were relaunched under the new Budgens Best brand, which replaced Our Kitchen. Further lines were relaunched as part of the standard offer.

Burton’s Foods

The Maryland, Jammie Dodgers and Cadbury Fingers brands entered the‘on-the-go snacking’ category in summer 2009, with the introduction of pouch packs under the Snack Bites label. The 125-gram (g) resealable packs also targeted sharing occasions.

Cadbury

The Cadbury Brunch range was extended with BrunchBreaks and BrunchBakes from March 2009. BrunchBreaks are slices topped with granola, raisin and hazelnut or with sunflower seeds, raisin and hazelnut, anddrizzled with chocolate. BrunchBakes are biscuits baked with oats, honeyand Cadbury’s chocolate.

From June 2009, as noted above, a new format was introduced to Cadbury Fingers: Snack Bites. The range targeted adult ‘on-the-go’ eating.

For Christmas 2009, a Cadbury Cookie Selection joined the Cadbury Selection carton, Cadbury tub and White Chocolate Fingers. In addition, a new look was given to the Cadbury Heritage barrels.

Jammie Dodgers

Jammie Dodger Splat Snacks were introduced in early 2009. These chewy‘splat’-shaped biscuit and cereal snacks are made from crisped rice, oats and raspberry fruit pieces and are designed for children’s lunchboxes and asafter-school treats.



Maryland Cookies

The Maryland cookie brand was relaunched with a new recipe in May 2009. The company replaced sugar syrup with golden syrup to offer a more‘home-baked’ taste. The product packaging was also revamped, with more images of the cookies and a lighter background.

Burton’s reintroduced the Maryland brand to its Christmas range in 2009, with a Merryland 675g cookies tub and a white chocolate chip miniature cookies carton.

Wagon Wheels

The 1970s gold packaging for Wagon Wheels was revived in February 2009, for a limited-edition caramel variant that was available in six-packs from February until the summer.

Duchy Originals

The Duchy Originals label was rebranded during 2009. A new logo carried wood-etching-style pictures of Duchy’s Home Farm to emphasise the provenance of the products. The new look was first introduced to the biscuit line from March. The biscuit range was also extended with the addition of Hazelnut & Cranberry, Chocolate with Vanilla All Butter Shortbread and Sweet Oaten and Heather Honey biscuits.

Fabulous Bakin’ Boys

From early 2009, a ‘grab and go’ format was introduced for three ranges of individually wrapped flapjacks, muffins and loaf cakes.

Raspberry Bakin’ Dozen and Oaty Bakin’ Dozen flapjack fingers were also introduced as an ‘ideal after-school value snack option’, in packs of 13.

Lunchbox muffins were introduced in four-packs, in Double Chocolate andMilk Chocolate Chip flavours.

Finsbury Food Group

Thornton’s

At the end of 2009, three new products were added to the round-cakes range. The range of everyday recipes included coffee and lemon flavours.

WeightWatchers

October 2009 saw the introduction of Caramel Mallows. The marshmallow and wafer sandwiches were offered in multipacks of six.



Gü

In April 2009, Gü introduced Naughties, bite-sized premium cake bites in tubs. The range was targeted at eating occasions such as mid-morning snacks, after-lunch sweet ‘fixes’ and late-afternoon ‘pick-me-ups’, and the varieties included Rocky Road, Millionaire’s Flapjack and Gü-ey Chocolate Sponge Rolls. The introduction was supported by £250,000 of marketing expenditure, including press and outdoor advertising and an online ‘How naughty are you?’ promotion.

The Jordans & Ryvita Company

The Ryvita brand saw the introduction of new recyclable packaging in 2009. The rebranded pack featured ways in which the product can be eaten, rather than product shots. The new look aimed to offer better shelf stand-out.

Kellogg’s

Fibre Plus

At the end of 2009, Kellogg’s introduced the Fibre Plus bar in Milk Chocolate and Dark Chocolate variants. The bar is oat based and, according to Kellogg’s, provides 20% of the recommended daily allowance (RDA) of fibre.

Nutri-Grain

From January 2010, Nutri-Grain branding was removed from the Elevenses range of daytime snacks, creating a stand-alone sub-brand. The packaging across the range was also revamped, with a new purple clock motif. The range includes the renamed Golden Oat Bakes and Oat Cookies Choc Chip.

The Nutri-Grain range will be renamed Nutri-Grain Morning Bars and will be positioned as a breakfast substitute.

Rice Krispies Squares

A Totally Chocolatey variant of Rice Krispies Squares was launched in 2009.

Kraft Foods

Mikado

In February 2009, Kraft introduced Mikado, a chocolate-coated biscuit positioned as an everyday treat. The ultra-thin half-chocolate-coated biscuit sticks are packaged in pocket-sized, flip-top boxes, and are sold in 39g individual packs, 3x39g multipacks and a 75g sharing box.



Oreo

In May 2009, a new 154g roll pack was introduced for the Oreo brand.The new format contains 14 biscuits.

Chocolate Creme Oreos were introduced in July 2009, backed by a marketing campaign, including television advertising.

Nestlé

Breakaway

In summer 2009, Breakaway was relaunched with a new fibre-rich recipe.The biscuit was reformulated to contain 100% wholemeal and oat flour,and the product’s packaging was also updated.

KitKat

Two-finger KitKat was relaunched in 2009, with a new recipe containing no artificial flavours, colours or preservatives. The new recipe was promoted through an advertising campaign.

Also during the year, a caramel variant was added to the KitKat range.

In December 2009, it was announced that the KitKat chocolate brand would become certified Fairtrade from 2010. The development will boost sales of Fairtrade chocolate by an estimated £43m a year.

Northern Foods

Fox’s

The half-coated Chunkie range saw the addition of Extremely Chocolatey Fruit & Nut Cookie from March 2009.

For Christmas 2009, Northern Foods introduced Fox’s Wonders, premium chocolate biscuits in a purple metallic tin. A Fox’s Fabulously Special Selection tin was also available.

Rocky

The packaging for the Rocky biscuit range was given a new look at the endof 2009, with music imagery used to reflect a ‘fresh urban personality’.

Paterson Arran

Paterson Arran introduced a new shortbread snack targeting children in 2009. Orang-u-Tangys, bite-sized biscuits shaped like an Orangutan and containing orange pieces, boasted reduced levels of saturated fat. The product was offered in multipacks of 25g bags.



Premier Foods

Cadbury

Cadbury Fudge was added to the Cake Bites range in July 2009. The products comprised small individual cakes made of sponge layers with Cadbury Fudge and covered in Cadbury chocolate.

August 2009 saw the launch of Cadbury Mini Bakes. The bite-sized products were initially introduced in two recipes: Chocolate Brownies and Chocolate Flapjacks.

Mr Kipling

In early 2009, the Delightful cake range was repositioned to appeal to dieters. The new recipes contained fewer than 80 calories per slice — less than half the calorie count of the original format. Country Slice also joined the range. The products’ packaging was changed to reflect the new nutritional values.

For summer 2009, Mr Kipling introduced strawberry-flavoured cakes to its French Fancies and Slices ranges. The cakes contained pieces and extract of real strawberries.

Toffee Apple Bakewells and Carrot Cake slices were introduced in October 2009. For Halloween, Mr Kipling Fiendish Fancies, Cadbury Trick or TreatMini Rolls and Cadbury Cake Bars in Scary Orange and Cinder Toffee flavours were introduced in limited-edition packaging.

The product range for Christmas 2009 included Mr Kipling Rum & Raisin Slices, Lyons Family Mince Pie and Mr Kipling Festive Fancies.

Traidcraft

In September 2009, the Fairtrade brand Traidcraft added a Fruit, Chocolate and Nut variant to its cookie range. The packaging for the range was also updated, offering more information about the sourcing of ingredients.

United Biscuits

Go Ahead!

Levels of saturated fat in Go Ahead! products were reduced in 2009: by 50% for Crispy Fruit Slices and by 18% for Yoghurt Breaks.

Oat Bakes, individually wrapped baked snacks, were introduced inmultipacks of five in June 2009. The initial variants were Apple & Blackberry and Mixed Berry.

Fruit Crunch Bars were added to the Go Ahead! range in summer 2009.The bars, in Chocolate Red Berry and Citrus Twist variants, were available in multipacks of six.



At the beginning of 2010, United Biscuits announced that it was removing artificial colours and flavours from its Go Ahead! Crispy Slices, Fruit Bakes and Yoghurt Breaks. New packaging highlighted the changes.

Jacob’s

Jacob’s Cream Crackers had a healthy-eating makeover in 2009, with increased fibre and a 30% cut in saturated fat.

Jacob’s Crack’o’Bites were introduced in August 2009. The miniature crackers were initially available in three variants — Cheese, Sour Cream & Chive and Barbecue — in 25g and multipack formats. Baked, rather than fried, and containing no artificial colours or flavours, the crackers are also free from monosodium glutamate (MSG) and hydrogenated vegetable fats.

Jaffa Cakes

A strawberry-flavoured variant was introduced to the Jaffa Cakes range between April and July 2009, in single and twin packs.

For Halloween 2009, Lemon & Slime Jaffa Cakes and Jaffa Cakes SpookyMini Rolls were available.

The Jaffa Present was introduced for Christmas 2009, containing the same number of biscuits as the Jaffa Yard.

McVitie’s Biscuits

In 2008, McVitie’s cut the saturated fat in its Digestives, Rich Tea andHobNobs standard and light variants by 50%. In November 2009, this was followed by a further 50% cut. The move was marked on packs with a flash reading ‘Now Lowest Ever Saturated Fat, Same Great Taste’.

In May 2009, the HobNobs brand was repackaged to increase shelf stand-out. The brand logo became the focus of the pack, with an orange background introduced to unify the range. A different splash of colour was used to differentiate each variant: Original, Milk Chocolate and Dark Chocolate.

In September 2009, a new pouch format was introduced for a number of McVitie’s Mini biscuit lines. Mini Milk Chocolate Digestives, HobNobs and Chocolate Chip Cookies were introduced in 125g tear-and-share packs.

Disney McVitie’s Cookies & Creams were introduced at the end of 2009.The products were available in collectable Mickey Mouse tins.

McVitie’s Cake Company

In April 2009, new cake ranges were introduced under the Jacob’s Club and Crawford’s biscuit brands. Products under the Crawford’s brand included chocolate and Madeira whole cakes, as well as mini rolls coated in milk chocolate. Sponge cake bars were launched under the Jacob’s Club brand,in chocolate orange cream and chocolate cream variants.



Mini Croissants were introduced from April 2009, to be eaten from the pack or reheated in the oven. Chocolate and Strawberry were the initial variants. The launch was backed by nationwide sampling and in-store promotion.

McVitie’s Cake Company’s offer for Christmas 2009 included Penguin Yule Logs, a special-edition Jamaica Ginger & Rum Cake, Irish Cream bars andMint Digestive Slices.

Weetabix

In summer 2009, Weetabix revamped the Alpine image on its Alpen range. The mountain silhouette on the packaging was replaced with a photograph of the sun rising over a snowy mountain ridge. New television advertising for the brand was also used to promote the cereal and cereal-bar range.

BRAND ADVERTISING

Table 5.1 outlines levels of main media advertising expenditure by various biscuit and cake brands in the year ending September 2009. The entries have been listed in alphabetical order, rather than value order, in order to give a clearer picture of the range of campaigns undertaken by each supplier.

The table is followed by examples of recent marketing activity.

Table 5.1: Main Media Advertising Expenditure on Selected Brands of Biscuits and Cakes (£000),

Year Ending September 2009

Biscuits

Bahlsen — Choco Leibniz biscuits 1,780

Bonne Maman — Galettes biscuits 90

Fox’s — biscuit range 751

Fox’s — Golden Crunch biscuits 1,040

Fox’s — Rocky Bar 143

Fox’s — Whipped Creams biscuits 82

Kraft — Mikado biscuit sticks 1,385

Maryland — Choc Chip Cookies 955

McVitie’s — biscuit range 563

McVitie’s — Digestive range 1,248

McVitie’s — Mini Chocolate Digestive 1,480

Nabisco† — Oreo cookies 2,466

Tunnock’s — Caramel Wafer 318

Table continues...



Burton’s Foods

Cadbury

In September 2009, Burton’s Foods ran a promotion on packs of Cadbury Digestives, Rich Tea, Shortcake and Oat & Choc Chip, offering the chance to create a personalised mug. Consumers entered the promotion online, using an on-pack code, and uploaded their preferred picture. The image was then printed on the mug and sent to them. The aim was to reinforce the link between the biscuits and hot drinks.

Jammie Dodgers

The Jammie Dodgers brand undertook a range of activity as part of its partnership with Red Nose Day in 2009. From the end of January, 2 pence was donated to Comic Relief for each Jammie Dodger Red Nose Day pack sold.

...table continued

Cereal Bars

Kellogg’s — Choco Rice Krispies Squares 332

Kellogg’s — Nutri-Grain bar 2,446

Kellogg’s — Rice Krispies Squares 4,827

Kellogg’s — Special K cereal bar 2,844

McVitie’s — Go Ahead! Yoghurt Breaks 977

Nature Valley — Crunchy Granola 934

Weetabix — Alpen Bars 529

Crackers and Crispbreads

Jacob’s — Cream Crackers 530

Kallo — Rice Cakes 142

Kellogg’s — Special K Mini Breaks 3,014

Ryvita — crispbread range 106

Ryvita — product range 2,406

Cakes

Mr Kipling — Cake Bites 105

† — the Nabisco brand is owned by Kraft Foods

Source: Nielsen Media Research

Table 5.1: Main Media Advertising Expenditure on Selected Brands of Biscuits and Cakes (£000),

Year Ending September 2009



Maryland Cookies

The revamp of the Maryland Cookies brand was backed by television advertising in 2009, featuring the new brand characters Cookie Guy and Nigel, with the strapline ‘Choc Full of Yumminess’. The commercials ranfrom June to October.

Wagon Wheels

From April 2009, Burton’s Foods partnered with World Wrestling Entertainment (WWE) to promote the Wagon Wheels brand. Activity throughout the summer included on-pack promotions offering prizes including a school visit from a WWE wrestler. A microsite, ‘viral’ e-mailsand a regional radio campaign also formed part of the promotion.

The Jordans & Ryvita Company

In May 2009, Ryvita launched a Summer Fit Challenge campaign inpartnership with IPC Media. The promotion included a 14-day eating plan, which drove awareness of the Ryvita Crispbread, Minis and Thins ranges. Advertorials ran across Woman, Woman’s Own and Now magazines, and online at www.goodtoknow.co.uk.

Kellogg’s

Nutri-Grain

From summer 2009, Kellogg’s invested £2.5m in a campaign highlighting the higher level of fruit filling in its Nutri-Grain Soft Bake bars. The role of the bar as a breakfast replacement was also emphasised.

Kraft Foods

Mikado

The introduction of Mikado in early 2009 was backed by a £3m television advertising campaign using the strapline ‘More than a little bit tempting’. Activity also included advertising on the sides of buses.

Oreo

During 2009, Kraft Foods dedicated £4.3m to a marketing campaign for the Oreo biscuit brand.

From April 2009, Oreo partnered with Vue cinemas for a 6-month period,with activity including in-foyer sampling and marketing material. Oreo advertising was also screened before family ‘blockbusters’.



Mars

Twix

Advertising for the Twix brand from September 2009 focused on linking the product with hot beverages, specifically tea. The promotion included the offer of a free cup of tea with every bar purchased. Consumers were able to enter a code online to enjoy a cup of tea at a number of outlets or have a packet of five teabags sent to their home.

Northern Foods

Fox’s

In summer 2009, a new online auction site was created for Fox’s Vinnie the Panda character. This allowed consumers to bid for ‘memorabilia’ relating to the mascot. The eBay-based site continued the use of the character, which was first introduced in May 2008.

Rocky

In September 2009, Fox’s repositioned Rocky as the ‘biscuit bar with an attitude’. Advertising centred on the British Biscuit Advisory Board,a fictitious body educating consumers about ‘safe biscuit eating’. Spoof legal posters appeared in ten cities around the UK, a website was constructed and national press advertising also promoted the brand. A national television campaign followed at the end of September.

Premier Foods

Mr Kipling

In 2010, the Mr Kipling brand entered into a sponsorship deal with the television show All Star Mr & Mrs. ‘Idents’ featuring the cake range will be shown on either side of each advertising break.

United Biscuits

In July 2009, United Biscuits introduced a new interactive campaign:Bonkers About Biscuits. Labelling on packs directed consumers to the company’s website, where they could vote for their favourite UK brand of biscuit. A £5,000 prize was on offer each day for an 8-week period.

The promotion was backed by a 4-week television campaign from September. The new interactive website also offered users the chance to find out which biscuit most suited their personality.



Go Ahead!

The launch of Go Ahead! Fruit Crunch Bars in summer 2009 was backed by a consumer public-relations (PR) campaign targeting women.

Activity for the Go Ahead! range in 2009 included promotions and competitions, promoting the brand’s ‘feel good’ positioning. From May,the brand offered consumers the chance to win trips to New York, Cuba or Turkey, with runner-up prizes including Nintendo Wii games consoles.The brand’s website was also relaunched.

Jacob’s

From September 2009, new television advertising was undertaken for the Jacob’s Cream Crackers brand. The new commercials featured the celebrity gardener, author and chat-show host Alan Titchmarsh.

Jaffa Cakes

In March 2009, the Jaffa Cakes brand partnered with Virgin Atlantic to offer consumers the chance to win a family holiday to Orlando, Florida.

McVitie’s Biscuits

From May 2009, McVitie’s Minis were advertised on television for the first time, with an animated 6-week campaign. The commercials featured a wheatsheaf visiting locations where the biscuit could be enjoyed out of the home. A dedicated McVitie’s Minis webpage was also introduced.

From early 2010, United Biscuits invested £2.5m in television advertising for its Digestives, HobNobs and Rich Tea brands. From February, advertising promoted the group’s £5m saturated-fat-reduction programme across the three brands. Other activity included the rerunning of the Dunk or Noton-pack campaign from March.

Penguin

In February 2009, Penguin teamed up with the Zoological Society of London to launch an on-pack promotion to help fund research into the declining penguin population in the Antarctic. The ‘missing penguin’ campaign offered an instant-win chance of a holiday in South Africa, with runner-up prizes including tickets to London Zoo. The promotion aimed to raise £50,000 for penguin-related research by the Zoological Society of London.

Weetabix

The Alpen brand was backed by a £3.4m advertising campaign, including television commercials, in 2009. The strapline used was ‘Alpen: we know you know how good it is’.


Biscuits & Cakes Strengths, Weaknesses, Opportunities and Threats

6. Strengths, Weaknesses, Opportunities and Threats

STRENGTHS

• Biscuits and cakes are regarded as low-priced indulgences, but consumers are willing to spend more on these products when appropriate.

• Biscuits and cakes have maintained a high level of penetration in the food sector for a number of years.

• Strong brands are a feature of the market.

• The UK has one of the highest per capita consumption rates for biscuitsin Europe.

• Biscuits and cakes are purchased by the majority of the population.

• The range of products in the market addresses different eating occasions and consumer preferences.

• Biscuit and cake recipes are flexible enough to incorporate wider market trends when necessary.

WEAKNESSES

• Strong branding demands substantial financial investment.

• Biscuits and cakes are not regarded as healthy products, because they contain high levels of fat and sugar.

• Sales can be seasonal — for example, when consumption of hot beverages dips in warmer weather, so can biscuit sales.

• The fragmented nature of the market means that communication between manufacturers and retailers is complex.

• As part of the food industry, the biscuits and cakes category is subject to stringent legislation.


Biscuits & Cakes Strengths, Weaknesses, Opportunities and Threats

OPPORTUNITIES

• Limited-edition activity offers wide scope for timed product launches.

• Established products can be revived with new packaging and promotional expenditure.

• New permanent variants offer the chance for low-risk brand building.

• New pack formats can also offer market interest.

• The market for healthy-eating products has yet to be fully exploited.

• The changing demographic profile of the UK population will encourage the launch of new product types.

• There is further scope for brand exploitation in other areas of the food market.

THREATS

• The high level of investment needed to launch national brands deters product innovation.

• Health lobbies encourage consumers to reduce their consumption of ‘unhealthy’ foods such as biscuits and cakes.

• The strength of the multiple grocers’ own brands threatens established manufacturer brands.

• The ageing nature of the population could have a negative impact on sales, as older groups tend to be lighter consumers of these products.

• A downturn in consumer spending may reduce growth in sales of premium brands and thus reduce product investment.


Biscuits & Cakes Buying Behaviour

7. Buying Behaviour

CONSUMER PENETRATION

Biscuits and cakes enjoy high levels of consumer penetration, with more than half the population eating these products. Sweet biscuits showed the highest level of penetration among British adults in the year ending March 2009, at 83.1%, although this was a little lower than the 88% recorded in 2008. There was also a decline in the penetration of savoury biscuits and crackers in 2009, but fresh and packeted cakes managed an increase.

Products for solo eating, individual portions and share packs are longer established in the biscuits category than in the cakes category. However,the development of more products for eating ‘on the go’, snacking and lunchboxes may have boosted penetration levels for cakes.

By Sex

Women are more likely than men to be consumers of all three biscuit and cake categories. However, penetration levels among men are not far behind, as Table 7.2 shows. Since women still take the lead in buying food products generally, they may purchase these products not just for themselves but for other household members and guests.

The growth of individually wrapped products for sale through impulse outlets has increased the presence of biscuits and cakes alongside other snack foods, such as crisps and confectionery. It has also increased the opportunities for purchases outside the traditional distribution channels.

Table 7.1: Penetration of Biscuits and Cakes in theLast 12 Months by Type of Product (% of adults),

March 2008 and 2009

2008 2009

Sweet biscuits 88.0 83.1

Savoury biscuits and crackers 72.2 69.9

Fresh/packeted cakes 56.0 59.1

Source: Target Group Index (TGI), © BMRB International Ltd, 2009



By Age

In terms of age, penetration of sweet biscuits and fresh/packeted cakes peaks in households headed by those in the 25 to 44 age range. This will include the majority of homes with children, which are likely to have a strong need for lunchbox and snacking items. However, penetration levels for these products remain relatively high across all age groups.

Penetration is a little lower among the under-25s. Premier Foods, the owner of the Mr Kipling brand, has referred to a ‘lost generation’ of younger consumers who have not been effectively targeted by established or emerging products in the cake market. As a result, the company is developing products specifically for this sector.

Penetration of savoury biscuits and crackers peaks among the older age groups. While new formats have been developed to target the younger snacking market, sales of savoury biscuits and crackers for traditional uses may continue to be dominated by older consumers.

Table 7.2: Penetration of Biscuits and Cakesin the Last 12 Months by Type of Product by Sex

(% of adults), March 2009

Sweet Savoury Biscuits Fresh/PacketedBiscuits and Crackers Cakes

All adults 83.1 69.9 59.1

Sex

Male 80.0 62.5 56.4

Female 86.1 77.0 61.7




By Social Grade

There is little variation in the penetration of sweet biscuits by social grade. However, there is a clear link between social grade and the penetration of savoury biscuits and crackers, as Table 7.4 shows. This may be because the higher social grades are more likely to take part in formal eating occasions ending with cheese and biscuits, or because they consume a wider range of products. The broadening of product ranges to include more flavoured crackers, for example, may target these households more effectively.

Penetration levels for fresh and packeted cakes are lowest among those at either end of the social-grade scale. The A grade may be more likely to opt for fresh or home-made cakes, while the E grade includes consumers living on fixed incomes, including pensioners, who are less active in this market.

Table 7.3: Penetration of Biscuits and Cakesin the Last 12 Months by Type of Product by Age

(% of adults), March 2009


All adults 83.1 69.9 59.1

Age

15-19 82.5 45.7 60.4

20-24 80.3 57.2 59.2

25-34 85.4 65.7 63.4

35-44 84.5 72.6 60.8

45-54 83.0 76.5 58.2

55-64 80.3 76.3 59.2

65+ 83.5 75.9 54.6




Table 7.4: Penetration of Biscuits and Cakesin the Last 12 Months by Type of Productby Social Grade (% of adults), March 2009


All adults 83.1 69.9 59.1

Social Grade

A 82.7 77.2 57.7

B 82.5 76.7 59.3

C1 84.0 70.5 60.7

C2 83.6 68.7 60.3

D 81.9 62.3 56.3

E 82.5 62.7 56.5



Biscuits & Cakes Current Issues

8. Current Issues

BRAND ACTIVITY

BakeMark and Lyle’s Golden Syrup Flapjacks

In March 2009, Tate & Lyle and BakeMark reached a licensing agreement.The first product introduced under the former’s brand stable was Lyle’s Golden Syrup Flapjack Mini Bites, in September 2009. The product is sold in tubs containing 16 16-gram (g) pieces.

Dorset Cereals

In February 2009, Dorset Cereals launched a range of cereal bars based on its portfolio of muesli recipes. Three variants were launched initially: Berries & Cherries; Fruit, Nuts & Seeds; and Super High Fibre.

Furniss of Cornwall

The celebrity chef Rick Stein developed a bespoke range of savoury biscuitsin partnership with Furniss of Cornwall in 2009. The oat-based biscuits were available in three variants: Davidstow, Cheddar & Thyme and Cornish Sea Salt.

Handmade Cake Company

The Handmade Cake Company launched a range of cupcakes in September 2009. The cakes, in four flavours, were available in packs of 16.

Marmite

A Marmite cereal bar was introduced in October 2009. The 25g bars represented the first savoury cereal bar in the UK market and were initially launched in multipacks of six. Unilever backed the introduction with a £1.5m promotional campaign, including press and poster advertising.

Rootz

To coincide with Fairtrade Fortnight in 2009, BakeMark UK introduced Rootz bars and snacks. The range included Butter Flapjack, Butter Fruit Flapjack and Butter Choc Chip Flapjack bars. Fairtrade Chocolate Chip Muffins, Cherry & Sultan Muffins, Eccles Cakes, Chocolate Chip Shortbread, Chocolate Brownies and Chocolate Crispies were also introduced.



Sugar Puffs

The Sugar Puffs breakfast brand, owned by Honey Monster Foods, was launched in the cereal-bar category at the end of 2009. Monster Puffs bars in milk and chocolate flavours were positioned as an alternative to crisps and chocolate and were available in single and multipack formats.

Wish 4 Fair Trade

In November 2008, a new Fairtrade company, Wish 4 Fair Trade, introduced a 16-strong range of products, including snack bars, muffins, cakes and sweets. The brand was initially listed at independent retailers.

CONSULTATION ON SATURATED FAT AND CALORIES

In July 2009, the Food Standards Agency (FSA) launched a consultation proposing voluntary action to reduce saturated fat and calories in chocolate confectionery, biscuits, cakes, pastries, buns and soft drinks with added sugar. The proposed 10% cut, compared with 2008 levels, was to be met by the end of 2010. For non-plain biscuits, the recommended cut was lower, at 5%, to allow for the difficulty in reducing fat levels in some components.

In December 2009, the FSA’s second raft of proposals for saturated-fat levels were put out to consultation. The proposed voluntary changes included reducing portion sizes for snacks, expanding the definitions of ice cream and Cheddar to include lower-fat products, and reformulating some meat products. The agency calculated the minimum cost for reformulating products at between £1,000 and £3,000.

ETHICAL PALM OIL

In 2009, the use of palm oil in a range of foods came under the spotlight.Use of the ingredient was connected with acceleration in global warming as suppliers cut down rainforests to grow oil palms. As a result, the major food groups looked for ways to offer a more environmentally friendly recipe. They faced two options: buying certified sustainable palm oil (CSPO), made by plantations adhering to criteria laid down by the Round Table for Sustainable Palm Oil (RSPO), or targeting firms with GreenPalm certificates.

United Biscuits signed a 2-year agreement with New Britain Palm Oil in October 2009, for the use of oil from sustainable sources. The move means that United Biscuits is two-thirds of the way towards its goal of obtaining all of its oil from sustainable sources by 2011. New Britain Palm Oil is to open a refinery in Liverpool by spring 2010.



The GreenPalm programme is another option for suppliers who are looking to use palm oil from sustainable sources. In December 2009, Waitrose announced a commitment to use CSPO in a quarter of its own-label foods by the end of 2010. Premier Foods and Marks & Spencer have also signed up. Producers certified by the RSPO are awarded a GreenPalm certificate for each tonne of palm oil they produce sustainably. Manufacturers and retailers then bid for and buy the certificates online.

At the beginning of 2010, Food Manufacturer magazine stated that less than 4% of global palm oil production had been RSPO certified, although uptake was rising sharply.


Biscuits & Cakes The Global Market

9. The Global Market

GLOBAL CONSUMPTION OF BISCUITS AND WAFERS

According to CAOBISCO (the association of the chocolate, biscuit and confectionery industries of the EU), the total volume of biscuits and wafers consumed in the member countries listed in Table 9.1 fell from 3,870,000 tonnes to 3,791,000 tonnes between 2005 and 2007, as a result of a declinein sales in the EU27 countries.

The UK had the highest per capita consumption of biscuits and wafersamong the listed countries in 2007, at 9.61 kilograms (kg) per person per year. This compares with an average of 7.56kg for all EU countries.

Per capita consumption of biscuits and wafers in the UK increased between 2005 and 2007, as it did in a number of countries. The most striking reduction was seen in the Netherlands, from 13.15kg in 2005 to 7.85kg in 2007.

Table 9.1: Per Capita Consumption of Biscuits and Wafersin Selected Countries (kilograms), 2005 and 2007

2005 2007

UK 9.09 9.61

Denmark 9.06 9.58

Portugal 8.61 9.31

Italy 9.27 9.29

Belgium 5.90 8.90

France 8.64 8.77

Switzerland 8.31 8.74

Spain 6.73 8.23

Finland 7.70 7.99

Sweden 9.46 7.92

Slovenia 4.88 7.88

Netherlands 13.15 7.85

Germany 7.71 7.76

Austria 8.18 6.99

Hungary 5.63 4.80

Greece 5.57 4.26

Slovakia 7.27 3.17

Table continues...



CORPORATE DEVELOPMENTS

Bahlsen (Germany)

In December 2009, Bahlsen revealed that it was to reorganise its own-label biscuit operations. The group sells biscuits under the Bahlsen andLeibniz-Keks brands, as well as supplying own-label products. A centralised unit will be set up for retailers’ brands, under the Bisquiva name.

Bauli and Nestlé (Italy)

Bauli, a Verona-based bakery group, acquired the Motta and Allemagna brands from Nestlé in September 2009. As a result, the group became the world’s leading producer of panettone, the seasonal Italian cake.

Bauli’s product range includes panettone and pandoro, crackers, croissants, speciality cakes and cookies.

Britannia (India)

Danone formally exited its Indian biscuit joint venture with Wadia Groupin 2009, selling its stake in Britannia Industries to its former partner.

In June 2009, Britannia Industries announced that it planned to expand inthe Gulf region. The move was to be made in partnership with StrategicFood International Company (SFIC), in which Britannia holds a 70% stake. SFIC produces biscuits at its facility in Sohar, Oman.

...table continued

2005 2007

Czech Republic 8.13 2.72

Japan 1.87 1.94

China - 1.33

Poland 5.49 1.25

Average for EU countries 8.02 7.56

Source: CAOBISCO (www.caobisco.com)

Table 9.1: Per Capita Consumption of Biscuits and Wafersin Selected Countries (kilograms), 2005 and 2007



Kraft (France)

Kraft announced a €4.8m investment in France, for the development of a new line of savoury snacks, in October 2009. A new line of crackers will be created under the Belin brand.

Kraft also announced that it was to open a new biscuit-production plant in Russia, where it supplies the Bolshevik brand.

Lance and Stella D’oro (US)

The US-based snack-food group Lance acquired the cookie brand StellaD’oro in October 2009. Lance’s portfolio already included the Archway and Mother’s Cookies brands.

Nestlé

In January 2010, Nestlé opened a global research and development (R&D) centre for biscuits and cereal-based snacks in Santiago, Chile. The new centre will focus on the innovation and renovation of products, bringing together specialists from fields including nutrition, engineering, product development and quality control.

United Biscuits

In December 2009, it was announced that United Biscuits was preparing to enter the Indian biscuit market. Plans had been made to set up new manufacturing facilities in Himachal Pradesh, in northern India.

At the end of 2009, a dispute arose concerning the sourcing of the Jacob’s brand in the Republic of Ireland. Some Irish retailers had been obtaining products from United Biscuits in the UK, which owns the UK rights to the Jacob’s brand. The Irish manufacturer Jacob Fruitfield no longer manufactures biscuits in the Republic of Ireland, but it retains the right to sell and distribute the Jacob’s brand in that market and it issued a solicitor’s letter warning retailers that it would take legal action to protect its trademark.


Biscuits & Cakes Forecasts

10. Forecasts

THE ECONOMY

Gross Domestic Product

The UK’s gross domestic product (GDP) contracted in 2009, but it is forecast to show positive (if slow) growth over the period between 2010 and 2013. While this should offer suppliers a positive investment background, the economic slowdown will have an adverse impact on spending in many sectors.

In previous recessions, the food sector as a whole has managed to retain and even boost its sales, since food is not only a necessity but may be regarded as a low-cost luxury in difficult times. However, there may be some trading down by consumers — and this, together with more selective purchases, is likely to have an adverse effect on the value of sales.

Inflation

Following an estimated deflation rate of 0.7% in 2009, the general rate of inflation in the UK is forecast to be between 2.5% and 3.1% each year between 2010 and 2013. The impact on the various sectors of UK industry will differ. The price hikes anticipated in essential categories such as energy and transport will hit corporate finances, while increasing food and energy costs will lead to a squeeze on consumer spending.

Within the food market, the major multiples have already tightened their focus on price in a bid to maintain market share.

Table 10.1: Forecast Growth in UK Gross Domestic Productin Real Terms (%), 2009-2013

2009 2010 2011 2012 2013

Growth (%) -4.5 1.1 2.0 2.3 2.7

Percentage-point

change year-on-year - 5.6 0.9 0.3 0.4

Source: Forecasts for the UK Economy, November 2009, TreasuryIndependent Average © Crown copyright



FORECASTS 2010 TO 2014

The UK market for biscuits and cakes is forecast to rise in value each year between 2010 and 2014. Initially, this growth will be driven largely by ongoing cost increases, feeding through to the retail market. However, as the economy emerges from recession, price points in the biscuit and cakes category are likely to rise as levels of promotion fall off, leading to real value growth in the market. This will enable further investment in new product development by manufacturers.

By 2014, the market is forecast to be worth £4.13bn. This represents a 22% increase on the figure for 2009.

Table 10.2: Forecast UK Rate of Inflation (%), 2009-2013

2009 2010 2011 2012 2013

Inflation (%) -0.7 2.5 2.5 2.9 3.1

Percentage-point

change year-on-year -4.7 3.2 0.0 0.4 0.2

Note: inflation is at retail price index (RPI).

Source: Forecasts for the UK Economy, November 2009, TreasuryIndependent Average © Crown copyright

Table 10.3: The Forecast UK Market for Biscuits and Cakesby Value (£m at rsp), 2010-2014

2010 2011 2012 2013 2014

Biscuits 2,196 2,259 2,359 2,489 2,638

Cakes 1,268 1,301 1,354 1,408 1,487

Total 3,464 3,560 3,713 3,897 4,125

% change year-on-year 2.5 2.8 4.3 5.0 5.9


Source: Key Note



FUTURE TRENDS

Demographics

The UK population profile is changing, with the number of under-14s and over-45s forecast to rise. This will have an impact on suppliers’ strategy. Speaking to The Grocer (17th October 2009), Sue Garfitt, Head of Insights, Category and Marketing Planning at Burton’s Foods Ltd, said:

“The core biscuit eaters are the over-45s, who make up 46% of the market. We want to make sure we are engagingconsumers from cradle to grave with life-long relevance, which means modernising. Children still love biscuits, but as they grow up they opt for other sweet treats. We as an industry need to use brands such as Oreo, Penguin andKitKat to make sure we are appealing to consumers in that teen group.”

New Product Formats

The snacking and eating-on-the-go markets are both signposted by biscuit and cake suppliers for future development and growth. According to Burton’s Foods, while 50% of confectionery and 80% of bagged snacks are eaten out of the home, this drops to 38% for biscuits, indicating considerable scope for development. The move towards new packaging and new products will allow biscuits and cakes to address different consumers. Traditional biscuit-barrel and tea-time occasions have gone; products and brands need to reflect this and address more relevant consumer needs.

With the introduction of new miniature and portion formats, the convergence between confectionery and biscuits and cakes seems set to continue. Cakes, in particular, can target higher levels of spending through their premium aspects. Cakes already enjoy a status as a special-occasionfood and this could be exploited in individual formats.

Healthy Eating

In 2010, the Food Standards Agency (FSA) will report the conclusions of its consultation on saturated fats in confectionery, cakes and biscuits. The proposed voluntary cutback of 10% across the board has cost implications for suppliers. At the same time, however, none will want to be left behind if competitors are pro-active on this issue. United Biscuits has already gone ahead with the reformulation of selected products.

Interest in healthier eating will be balanced by the trend towards indulgence. Cakes, in particular, can be bought specifically for the premium nature of their ingredients and recipes. The key factor for suppliers is to know their market and their brands: some will lend themselves to more streamlined healthy recipes and some will not. There may, however, be some combination of the health and indulgence trends — for example, through concepts such as ‘wholesomeness’ in ingredients and quality (see the next section).



Resumption of Longer-Term Trends

A number of trends were gaining momentum before the advent of the recession changed the focus to pricing and brand consolidation. These factors are likely to drive future new product development.

The trend towards ‘traditional’ and ‘wholesome’ recipes meant that more recipes were incorporating specific ingredients (e.g. free-range eggs and wholemeal flour) to appeal to consumers. The decision to alter the formulation of Maryland Cookies to use golden syrup, rather than sugar syrup, was one example of this type of activity in 2009.

Offering healthier and ‘cleaner’ ingredients is another factor. More products are likely to be stripped of artificial colourings and additives, and there will be further removal of ingredients such as hydrogenated fats.

Organic foods saw some tailing off in sales in 2008/2009, but as consumers begin to see a rise in income levels, these too will gain a greater presence. Fairtrade ingredients and products will also experience growth.


Biscuits & Cakes Company Profiles

11. Company Profiles

INTRODUCTION

The following section contains financial profiles of some of the principal companies identified as operating within the market sector discussed in this report. The financial results of some of the important names within the sector may not be reported if:

• their principal activities are so varied that their results are not considered applicable to the survey

• they are no longer trading as separate companies

• their financial data are very out of date.

DEFINITIONS

A company which has a ‘Y’ consolidated value has filed consolidated accounts for the relevant year.

† — denotes that the growth rate calculation is invalid, because the figures either move from positive to negative or from negative to positive.

Turnover (Sales)

This includes all income derived from the principal activities of the firm, net of VAT. It encompasses UK sales, exports, overseas and intercompany sales.

Pre-Tax Profit

The net trading profit figure after deduction of all operating expenses, including depreciation and finance charges but before deduction of tax, dividends, subventions or group relief, and other appropriations. Where applicable, it will include the share of profits and losses of associated companies. Items described by the company as exceptional are included; extraordinary items are excluded.

Profit Margin

Pre-tax profit expressed as a percentage of sales.

Average Remuneration

Total employee remuneration divided by the number of employees.

Sales per Employee

Sales divided by the number of employees.

FURTHER INFORMATION

For more detailed financial information telephone ICC Customer Services on: 020-7426 8555.



BURTON’S FOODS LTD

Registered Office 74-78 Victoria StreetSt AlbansHertfordshire, AL1 3XHTelephone: 01727-899 700Fax: 01727-899 701

Company Registration Number 02086754Date of Incorporation 02/01/1987Holding Company Burton’s Foods (Holdings) LtdUltimate Holding Company Duke Street General Partner Ltd

Previous Name(s) and Date(s) of Change

The Horizon Biscuit Company Ltd (03/09/01)Premier Laboratory Services Ltd (25/04/97)Cantabrian Properties Ltd (01/12/95)Chivers Hartley Ltd (30/11/93)

Principal Activities

The manufacture and sale of biscuits and snacks and confectionery.

SIC Codes

15820, Manufacture of rusks and biscuits; manufacture of preserved pastry goodsand cakes.15842, Manufacture of sugar confectionery.15841, Manufacture of cocoa and chocolate confectionery.

Structure

Burton’s Foods Ltd supplies a wide range of biscuits. The company was bought by the private-equity group Duke Street Capital in March 2007.

Brand Information

Brands supplied by Burton’s Foods include Maryland Cookies, Viscount, Wagon Wheelsand Cadbury’s biscuits.

Recent Developments

Burton’s launched a new Out of Home Snacking division in November 2009. The operation deals specifically with the foodservice snack market. New product formats have been designed for distribution via hotels, business and industry, vending machines, pubs, and travel and leisure outlets.



FINANCIAL PROFILE

Year End 03/01/09 29/12/07 30/12/06 31/12/05Weeks 53 52 52 52Consolidated N N N N

Sales

Sales (£000) 300,992 277,553 278,458 287,132% change year-on-year 8.44 -0.33 -3.02 -Exports (£000) 42,109 38,153 38,176 38,400Exports/Sales (%) 13.99 13.75 13.71 13.37

Profits

Pre-Tax Profit (£000) 6,414 5,264 10,802 3,999% change year-on-year 21.85 -51.27 170.12 -Profit Margin (%) 2.13 1.90 3.88 1.39Operating Profit (£000) 4,030 1,960 10,332 5,034

Employees

Number of Employees 2,471 2,704 2,965 2,696Average Employee Remuneration (£) 23,701 21,226 20,297 23,044Sales per Employee (£) 119,512 102,645 93,915 106,503Profit per Employee (£) 2,547 1,947 3,643 1,483Capital Employed per Employee (£) 44,390 37,568 30,121 75,627

Balance Sheet/Ratios

Capital Employed (£000) 109,687 101,583 89,308 203,891Return on Capital (%) 5.74 5.18 12.10 1.96Net Worth (£000) 50,204 90,560 76,793 49,074Current Ratio 1.96 1.58 1.49 1.34Liquidity Ratio 1.68 1.31 1.23 1.04



FINSBURY FOOD GROUP PLC

Registered Office Maes Y Coed RoadCardiff, CF14 4XRTelephone: 020-7448 8950Fax: 020-7638 9426

Company Registration Number 00204368Date of Incorporation 09/03/1925Holding Company NoneUltimate Holding Company None


Megalomedia PLC (30/08/02)Graduate Appointments PLC (30/11/95)United Tin Areas PLC (05/08/94)


A group engaged in the manufacture and supply of boxed ambient cakes and speciality breads, mainly to the major supermarket chains.

SIC Code

15810, Manufacture of bread; manufacture of fresh pastry goods and cakes.

Structure

Finsbury Food Group PLC, listed on the Alternative Investment Market (AIM), supplies a range of branded and own-label ambient cakes and muffins.

Brand Information

The company supplies cakes under the Memory Lane, Nestlé and Disney brands, as well as products under retailers’ own labels.

Recent Developments

In a trading update published in November 2009, Finsbury stated that its cake sales were down by 6% for the 17-week period to the end of October. The company attributed the dip to the impact of the recession on consumer behaviour and its effect on sales of premium ranges.



FINANCIAL PROFILE

Year End 04/07/09 30/06/08 30/06/07 30/06/06Weeks 53 52 52 52Consolidated Y Y Y Y

Sales

Sales (£000) 178,931 165,105 109,784 73,347% change year-on-year 8.37 50.39 49.68 -Exports (£000) 11,564 10,771 4,869 800Exports/Sales (%) 6.46 6.52 4.44 1.09

Profits

Pre-Tax Profit (£000) 1,775 5,066 5,449 2,062% change year-on-year -64.96 -7.03 164.26 -Profit Margin (%) 0.99 3.07 4.96 2.81Operating Profit (£000) 6,291 8,048 6,349 2,750

Employees

Number of Employees 2,790 2,748 1,871 1,235Average Employee Remuneration (£) 16,548 16,284 15,858 16,862Sales per Employee (£) 62,923 60,082 58,677 59,390Profit per Employee (£) 624 1,844 2,912 1,670Capital Employed per Employee (£) 24,804 27,678 33,080 20,107


Capital Employed (£000) 69,204 76,058 61,892 24,832Return on Capital (%) 2.52 6.66 8.80 8.30Net Worth (£000) -24,748 -22,026 -12,319 -1,692Current Ratio 0.63 0.77 0.67 0.79Liquidity Ratio 0.54 0.64 0.58 0.69



NESTLÉ UK LTD

Registered Office St George’s HouseCroydon, CR9 1NRTelephone: 020-8686 3333Fax: 020-8686 6071

Company Registration Number 00051491Date of Incorporation 03/03/1897Holding Company Nestlé Holdings (UK) PLCUltimate Holding Company Nestlé SA (Switzerland)


Nestlé (UK) PLC (03/01/92)Rowntree Ltd (22/11/91)Rowntree PLC (06/04/89)Rowntree Mackintosh PLC (30/06/87)


A group engaged in the manufacture and sale of food and drink products andassociated activities.

SIC Codes

15841, Manufacture of cocoa and chocolate confectionery.15612, Manufacture of breakfast cereals and cereals-based foods.15899, Manufacture of other food products not elsewhere classified.15519, Manufacture of other milk products.15862, Production of coffee and coffee substitutes.15850, Manufacture of macaroni, noodles, couscous and similar farinaceous products.15842, Manufacture of sugar confectionery.15980, Production of mineral waters and soft drinks.

Structure

Nestlé UK Ltd is a subsidiary of the Swiss company Nestlé SA, one of the leading food processors in Europe. The group supplies a wide range of food products, including biscuits, confectionery, coffee and cereals.

Brand Information

Biscuit brands supplied by the group include KitKat, Breakaway and Blue Riband.

Recent Developments

In January 2010, Nestlé confirmed that it plans to invest £15m to upgrade its York wafer factory over a 3-year period. The wafer is used in the production of KitKat. The group also expects to reduce carbon emissions by 60% and cut gas consumption by 30% through the investment.



FINANCIAL PROFILE

Year End 31/12/08 31/12/07 31/12/06 31/12/05Weeks 52 52 52 52Consolidated Y Y N N

Sales

Sales (£000) 1,378,000 1,269,200 1,287,400 1,352,400% change year-on-year 8.57 -1.41 -4.81 -Exports (£000) 248,000 174,700 161,000 152,500Exports/Sales (%) 18.00 13.76 12.51 11.28

Profits

Pre-Tax Profit (£000) 48,500 61,600 -62,400 -100,100% change year-on-year -21.27 † † -Profit Margin (%) 3.52 4.85 -4.85 -7.40Operating Profit (£000) 98,300 87,700 -2,800 -50,200

Employees

Number of Employees 4,881 5,179 5,418 5,781Average Employee Remuneration (£) 35,915 35,779 34,016 34,544Sales per Employee (£) 282,319 245,067 237,615 233,939Profit per Employee (£) 9,936 11,894 -11,517 -17,315Capital Employed per Employee (£) -55,849 96,351 84,958 86,179


Capital Employed (£000) -272,600 499,000 460,300 498,200Return on Capital (%) - 12.34 -13.56 -20.09Net Worth (£000) -307,500 -348,100 -399,700 -421,500Current Ratio 0.48 1.45 0.91 0.81Liquidity Ratio 0.37 1.19 0.72 0.58



NORTHERN FOODS GROCERY GROUP LTD

Registered Office 2180 Century WayThorpe ParkLeeds, LS15 8ZB

Company Registration Number 00313761Date of Incorporation 04/05/1936Holding Company Northern Foods PLCUltimate Holding Company Northern Foods PLC


Fox’s Biscuits Ltd (19/06/89)


The manufacture and sale of biscuits.

SIC Codes

15820, Manufacture of rusks and biscuits; manufacture of preserved pastry goodsand cakes.15842, Manufacture of sugar confectionery.15611, Grain milling.

Structure

Northern Foods Grocery Group Ltd supplies biscuits through its Fox’s Biscuits division.

Brand Information

Brands supplied by the company include Fox’s, Officially Low Fat and Rocky.

Recent Developments

In November 2009, Northern Foods announced a new strategic plan, Project Golden.The aim is to produce more in the Fox’s biscuits range, cut costs and allow the company to innovate. The plan involves a £26.5m investment in extending robotic production and packing at the company’s three biscuit plants in Uttoxeter, Kirkham and Batley.



FINANCIAL PROFILE


Sales

Sales (£000) 184,606 175,207 201,103 220,770% change year-on-year 5.36 -12.88 -8.91 -Exports (£000) - - - -Exports/Sales (%) - - - -

Profits

Pre-Tax Profit (£000) 9,047 -621 17,422 15,595% change year-on-year † -103.56 11.72 -Profit Margin (%) 4.90 -0.35 8.66 7.06Operating Profit (£000) 8,390 -152 5,275 17,893

Employees

Number of Employees 2,550 2,548 2,760 3,205Average Employee Remuneration (£) 17,375 18,538 18,310 15,589Sales per Employee (£) 72,395 68,763 72,863 68,883Profit per Employee (£) 3,548 -244 6,312 4,866Capital Employed per Employee (£) 29,188 25,612 21,282 12,910


Capital Employed (£000) 74,429 65,259 58,739 41,376Return on Capital (%) 12.16 -0.95 29.66 37.69Net Worth (£000) 19,425 11,995 21,528 5,206Current Ratio 2.19 2.06 1.69 0.84Liquidity Ratio 1.80 1.65 1.32 0.58



PREMIER FOODS PLC

Registered Office Premier HouseCentrium Business ParkGriffiths WaySt AlbansHertfordshire, AL1 2RETelephone: 01727-815 850

Company Registration Number 05160050Date of Incorporation 22/06/2004Holding Company NoneUltimate Holding Company None


Premier Brands Foods PLC (02/07/04)


A group engaged in the manufacture and marketing of ambient grocery products for major multiple retailers, cash-and-carry and convenience stores, and foodservice operators.

SIC Codes

15330, Processing and preserving of fruit and vegetables not elsewhere classified.15870, Manufacture of condiments and seasonings.15519, Manufacture of other milk products.15810, Manufacture of bread; manufacture of fresh pastry goods and cakes.51380, Wholesale of other food including fish, crustaceans and molluscs.15899, Manufacture of other food products not elsewhere classified.

Structure

Premier Foods PLC is engaged in the manufacture and marketing of ambient grocery products. In December 2006, the company acquired RHM, the owner of Avana Bakeries (which supplies whole cakes) and Manor Bakeries (which supplies a range of ambient cake brands, including Mr Kipling and Cadbury cakes).

Brand Information

Brands supplied by the company include Mr Kipling and Cadbury’s.

Recent Developments

From autumn 2009, Premier Foods undertook a raft of activity and launches targeting a ‘lost generation of consumers’. The group said that it aimed to re-engage lapsed consumers. The first of the new product launches was Inspirations, a range of small cakes.



FINANCIAL PROFILE

Year End 31/12/08 31/12/07 31/12/06 31/12/05Weeks 52 52 52 52Consolidated Y Y Y Y

Sales

Sales (£000) 2,603,600 2,125,200 840,700 789,700% change year-on-year 22.51 152.79 6.46 -Exports (£000) 170,100 133,600 54,000 -Exports/Sales (%) 6.53 6.29 6.42 -

Profits

Pre-Tax Profit (£000) -403,900 -77,600 59,000 51,800% change year-on-year † -231.53 13.90 -Profit Margin (%) -15.51 -3.65 7.02 6.56Operating Profit (£000) -40,500 72,000 100,500 95,300

Employees

Number of Employees 15,913 17,937 5,114 4,027Average Employee Remuneration (£) 26,972 21,525 22,781 22,995Sales per Employee (£) 163,615 118,481 164,392 196,101Profit per Employee (£) -25,382 -4,326 11,537 12,863Capital Employed per Employee (£) 190,002 186,224 214,314 158,008


Capital Employed (£000) 3,023,500 3,340,300 1,096,000 636,300Return on Capital (%) -13.36 -2.32 5.38 8.14Net Worth (£000) -1,539,100 -1,427,100 -408,800 -442,100Current Ratio 0.71 0.80 0.92 1.07Liquidity Ratio 0.49 0.52 0.55 0.67



UNITED BISCUITS (UK) LTD

Registered Office Hayes ParkHayes End RoadHayesMiddlesex, UB4 8EETelephone: 020-8734 5000

Company Registration Number 02506007Date of Incorporation 25/05/1990Holding Company United Biscuits Luxco SCA (Luxembourg)Ultimate Holding Company United Biscuits Luxco SCA (Luxembourg)


David Ltd (06/11/93)Terry’s Group Ltd (23/08/93)Spinpace Ltd (25/01/93)


The manufacture and sale of a wide range of food products, including biscuits andsavoury snacks.

SIC Code

15820, Manufacture of rusks and biscuits; manufacture of preserved pastry goodsand cakes.

Structure

United Biscuits (UK) Ltd owns the market-leading McVitie’s biscuit brand, which includes products such as Rich Tea, Digestives and HobNobs. The McVitie’s Cake Company makes a range of eat-now cakes, including those under the Jaffa Cakes brand.

In October 2006, Blackstone Group and PAI Partners acquired the UK and Northern European business of United Biscuits.

Brand Information

The McVitie’s umbrella brand is used on various biscuit products, including Penguin and Digestives. The group also supplies Mars-branded cakes.

Recent Developments

In November 2009, United Biscuits announced that it was to invest over £2m at its site in Aintree, Merseyside, where it plans to open a Centre of Excellence for cracker production. The site will boost the firm’s output of crackers and will also create facilities to produce McVitie’s Jaffa Cake bars.



FINANCIAL PROFILE


Sales

Sales (£000) 999,400 918,700 897,000 755,800% change year-on-year 8.78 2.42 18.68 -Exports (£000) 108,100 74,600 71,300 68,300Exports/Sales (%) 10.82 8.12 7.95 9.04

Profits

Pre-Tax Profit (£000) 60,900 62,900 69,000 -3,800% change year-on-year -3.18 -8.84 † -Profit Margin (%) 6.09 6.85 7.69 -0.50Operating Profit (£000) 104,100 108,800 106,200 23,700

Employees

Number of Employees 6,665 6,810 6,863 7,497Average Employee Remuneration (£) 27,748 26,520 22,395 19,848Sales per Employee (£) 147,118 134,905 130,701 100,814Profit per Employee (£) 8,965 9,236 10,054 -507Capital Employed per Employee (£) 134,269 128,737 96,809 118,741


Capital Employed (£000) 894,900 876,700 664,400 890,200Return on Capital (%) 6.68 7.17 10.39 -0.43Net Worth (£000) 516,100 493,900 434,800 354,400Current Ratio 1.19 1.25 1.05 1.26Liquidity Ratio 1.17 1.22 1.03 1.22


Biscuits & Cakes Company Financials

12. Company Financials

The following companies, listed in alphabetical order, are taken from themyICC service.

ICC’s links with Companies House mean that when the latest accounts for a company are made available, they can be incorporated on our database and be ready for inclusion in Key Note Market Reports Plus. A delay of approximately 4 weeks occurs at Companies House between receipt of documents and their public release. As this delay can be longer, the availability of accounts can sometimes be affected.

It should be noted that the financial results for certain companies are not restricted to sales in the sector covered by this report.

Pre-TaxTurnover Profit Year

Company (£000) (£000) End

Thomas Auld & Sons Ltd - 6 31/03/09Bahlsen Ltd 21,626 2,425 31/12/08Bells Food Group Ltd 13,701 349 05/04/09Bobby’s Foods PLC 34,640 495 30/09/08Burton's Foods Ltd 300,992 6,414 03/01/09Carrs Foods International Ltd 18,099 -436 31/12/08Convenience Foods Ltd 232,565 -21,227 28/03/09Dawn Foods Ltd 27,889 1,996 31/12/08Delice de France PLC 193,394 4,342 31/07/08Duchy Originals Ltd 4,058 152 31/03/08Farmhouse Biscuits Ltd - 300 31/12/08Fine Lady Bakeries Ltd 72,838 2,710 28/03/09Finsbury Food Group PLC 178,931 1,775 04/07/09Fletchers Bakeries Ltd 82,916 -5,388 28/03/09Freshfayre Ltd 21,026 -1,428 25/04/09Greenhalgh’s Craft Bakery Ltd 25,043 -3,163 31/01/09Greggs PLC 628,196 49,470 27/12/08Hazlewood Foods Ltd - 4,563 26/09/08Henson Foods Ltd 12,936 42 30/04/09Hill Biscuits Ltd - 59 31/12/08The Jordans & Ryvita Company Ltd 52,322 7,171 13/09/08Lancashire Eccles Cakes Ltd - 100 31/05/08Marcantonio Foods Ltd - -114 31/01/09Nestlé UK Ltd 1,378,000 48,500 31/12/08Northern Foods Grocery Group Ltd 184,606 9,047 28/03/09Paterson Arran Ltd 13,931 623 31/12/08Petty, Wood & Company Ltd 46,855 1,263 27/03/09


Biscuits & Cakes Company Financials

Pre-TaxTurnover Profit Year

Company (£000) (£000) End

Premier Foods PLC 2,603,600 -403,900 31/12/08Frank Roberts & Sons Ltd 63,110 5,047 30/08/08Thomas Tunnock Ltd 35,612 1,049 28/02/09United Biscuits (UK) Ltd 999,400 60,900 03/01/09Walkers Shortbread Ltd 107,610 7,891 31/12/08

Biscuits & Cakes Further Sources


13. Further Sources

Associations

CAOBISCO1 rue DefacqzB-1000 BrusselsBelgiumTelephone: 00-32 2 539 18 00Fax: 00-32 2 539 15 75http://www.caobisco.com

Food and Drink Federation6 Catherine StreetLondon, WC2B 5JJTelephone: 020-7836 2460Fax: 020-7836 0580http://www.fdf.org.uk

Publications

The GrocerWilliam Reed Business MediaBroadfield ParkCrawley, RH11 9RThttp://www.thegrocer.co.uk

General Sources

BMRB International LtdEaling Gateway26-30 Uxbridge RoadEalingLondon, W5 2BPTelephone: 020-8433 4000Fax: 020-8433 4001http://www.bmrb.co.uk

ICC LtdTelephone: 020-8481 8800Fax: 020-8941 6014E-mail: [email protected]://www.icc.co.ukhttp://www.icc-credit.co.uk

ICC provides in-depth,business-critical information for risk and credit decision-making. A range of flexible online tools provide access to the most comprehensive content on all UK and Irish businesses.

ICC offers access to information through high-speed onlinedelivery tools:

• my ICC• my ICC credit management• Plum.

The data include:

• access to over 370 million original document images

• information on individual directors, shareholders, stakeholdersand consumers

• information on limited andnon-limited companies

• analysed financial, risk andbusiness information reports

• industry information for benchmarking.



Nielsen Media Research1st FloorAtrium CourtBracknellBerkshire, RG12 1BZTelephone: 01344-469 100Fax: 01344-469 102E-mail: [email protected]://www.nielsenmedia.co.uk

Government Sources

Department for Environment,Food and Rural AffairsNobel House17 Smith SquareLondon, SW1P 3JRTelephone: 08459-33 55 77Fax: 020-7238 2188http://www.defra.gov.uk

Food Standards AgencyAviation House125 KingswayLondon, WC2B 6NHTelephone: 020-7276 8000http://www.food.gov.uk

National Statistics1 Drummond GateLondon, SW1V 2QQTelephone: 020-7533 5888Fax: 01633-812 599http://www.statistics.gov.uk

The Stationery OfficeCustomer ServicesPO Box 29St Crispins HouseDuke StreetNorwich, NR3 1PDTelephone: 0870-600 5522Fax: 0870-600 5533E-mail: [email protected]://www.tsoshop.co.uk

Key Note Sources

Key Note LtdTelephone: 020-8481 8750Fax: 020-8783 0049E-mail: [email protected]://www.keynote.co.uk

Key Note Market Reports• Breakfast Cereals• Catering Equipment• Cooking Sauces & Food Seasonings• Fish & Fish Products• Fruit & Vegetables• Meat & Meat Products• Milk & Dairy Products• Poultry• Soup Market£460 each

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Biscuits & Cakes Understanding TGI Data

Understanding TGI Data

TGI tables, produced by BMRB International Ltd, are generally based on one of the following groups:

• Households — a private household consists of either one person living alone or a group of people, usually, but not always, members of one family, who live together and whose food and other household expenses are managed as one unit.

• Adults — any person aged 15 or over.

• Housewives — a member of a private household who is solely or mainly responsible for the household duties.

Number, Profile, Penetration

Tables used in Key Note reports may give figures for the Number, Profile, and/or Penetration. These terms are explained in the following table.

TGI data used in Key Note reports are broken down by age, social grade and standard region.

.0

.0

Table Heading

Population Number (000) Profile (%) Penetration (%)

All housewives 20,371 13,535 100.0 66.4

Age

15-24

25-34

Social Grade

AB

C1

Region

Greater

London

Source:Target Group Index, © BMRB International, 1995

1,045 7.7 0.03

2,697 19.9 12.1

61.5

71.9

2,557 10.4 55.2

The total number of adults, housewives, households, etc.

Across

The % of 15-24 year-olds, etc. who are users.

This is the projected number of people in each subgroup who use the product.

Down

The % of each subgroup who are users. Eachsubgroup should total 100% vertically.


Biscuits & Cakes Understanding TGI Data

Social Grade

This is normally based on the occupation of the Head of the Household, or if the Head of the Household is retired, their former occupation. If this information is not available social grade is based on environmental factors such as type of dwelling, amenities in the home, presence of domestic help, etc.

Social grade is assessed by the interviewer when collecting the information and is, therefore, based on information given personally and verbally by the respondent. Social grade is checked by BMRB’s coding and editing office.

The following table broadly defines the six social grades used. The relationship between social grade and net income of the Head of the Household is a complex one and readers should note that income is not determinant of social grade.

Standard Region

This is as defined by the Registrar-General.

Social Grade Social Status Head of Household’s OccupationA Upper middle class Higher managerial, administrative or professionalB Middle class Intermediate managerial, administrative or

professionalC1 Lower middle class Supervisory or clerical and junior managerial,

administrative or professionalC2 Skilled working

classSkilled manual workers

D Working class Semi and unskilled workersE Those at lowest

levels of subsistence (no other earner)

State pensioners or widows

Biscuits & Cakes Key Note Research


Key Note Research

Key Note is a leading supplier of market information, publishing an extensive range of consumer, industrial, business-to-business and services titles. With over 25 years’ experience, Key Note represents clear, concise, quality market information.

For all reports, Key Note undertakes various types of research:

Online searching is carried out by product code or free search method, and covers the period from the last edition of the report to the current day.

The ‘my ICC’ service is used to select company information relevant to the particular report. The financial information extracted may then be backed up by further online searching on particular companies.

Trade sources, such as trade associations, trade journals and specific company contacts, are invaluable to the Key Note research process.

Secondary data are provided by BMRB International (TGI) and Nielsen Media Research for consumer/demographic information and advertising expenditure respectively. In addition, various official publications published by National Statistics, etc. are used for essential background data and market trends.

Interviews are undertaken by Key Note for various reports, either face-to-face or by telephone. This provides qualitative data (‘industry comment’) to enhance the statistics in reports; questionnaires may also be used.

Field research is commissioned for various consumer reports and market reviews, and is carried out by NEMS Market Research.

Key Note estimates are derived from statistical analysis and trade research carried out by experienced research analysts. Up-to-date figures are inserted where possible, although there will be some instances where a realistic estimate cannot be made or external sources request that we do not update their figures.

Key Note Editorial, 2010

Biscuits & Cakes The Key Note Range of Reports


The Key Note Range of ReportsKey Note publishes over 180 titles each year, across both the Key Note and MarketAssessment product ranges. The total range covers consumer, lifestyle, financialservices and industrial sectors.

Title Edition Published

Market Reports and Reports Plus

A

Access Control 10 2008

Accountancy 13 2009

Aerospace 12 2003

Agrochemicals & Fertilisers 3 2002

Air Freight 2 2005

Airlines 20 2009

Airports 13 2009

Animal Feedstuffs 11 2001

Arts & Media Sponsorship 3 2008

Automatic Vending 24 2010

Automotive Services 6 2008

Autoparts 19 2009

B

Baths & Sanitaryware 14 2009

Bearings 2 2007

Betting & Gaming 22 2009

Biscuits & Cakes 16 2009

Book Publishing 19 2007

Bookselling 16 2009

Bread & Bakery Products 24 2009

Breakfast Cereals 14 2009

Breweries & the Beer Market 27 2008

Bricks & Tiles 15 2008

Bridalwear 5 2009

Builders’ Merchants 16 2008

Building Contracting 10 2009

Building Materials 13 2008

Bus & Coach Operators 9 2008

Business Press 14 2009

C

Cable & Satellite TV 10 2004

Camping & Caravanning 13 2002

Canned Foods 17 2009

Carpets & Floorcoverings 16 2009

Catering Equipment 12 2009

Chemical Industry 12 2008

Childrenswear 8 2009

Chilled Foods 15 2009

China & Earthenware 26 2009

Cigarettes & Tobacco 23 2009

Cinemas & Theatres 9 2001

Closed-Circuit Television 11 2009

Clothing Manufacturing 15 2008

Clothing Retailing 7 2009

Commercial Radio 8 2004

Commercial Vehicles 15 2009

Computer Hardware 8 2010

Computer Services 8 2008

Computer Software 7 2008

Confectionery 27 2009

Consumer Internet Usage 4 2000

Consumer Magazines 16 2009

Contraception 4 2009

Contract Catering & Foodservice Management 20 2007

Contract Cleaning 20 2008

Cooking Sauces & Food Seasonings 3 2008

Corporate & Promotional Giftware 3 2008

Corporate Hospitality 6 2007

Cosmetics & Fragrances 22 2009

Cosmetic Surgery 7 2009

Courier & Express Services 15 2008

D

Dark Spirits & Liqueurs 3 2004

Debt Management (Commercial & Consumer) 5 2008

Defence Equipment 10 2006

Design Consultancies 3 2000

Digital Broadcasting 4 2009

Digital Communications 1 2009

Digital TV 2 2003

Direct Marketing 19 2009

Discount Retailing 7 2009

Disposable Paper Products 13 2009

Document Imaging Systems 1 2007

Domestic Heating 14 2009

Dry Cleaning & Laundry Services 5 2005




E

Electrical Contracting 9 2009

Electrical Wholesale 5 2009

Electricity Industry 6 2009

Electronic Component Distribution 12 2002

Electronic Component Manufacturing 11 2002

Electronic Games 4 2003

Equipment for the Disabled 5 2009

Equipment Leasing 12 2003

Estate Agents 17 2008

Ethnic Foods 15 2009

Exhibitions & Conferences 11 2009

F

Factoring & Invoice Discounting 2 2003

Fast Food & Home Delivery Outlets 23 2008

The Film Industry 4 2002

Finance Houses 11 2000

Fire Protection Equipment 8 2006

Fish & Fish Products 13 2008

Fitted Kitchens 7 2007

Football Clubs & Finance 4 2009

Footwear 16 2009

Franchising 12 2010

Free-To-Air TV 8 2004

Freight Forwarding 17 2009

Frozen Foods 24 2009

Fruit Juices & Health Drinks 12 2008

Fruit & Vegetables 21 2009

Further & Higher Education 6 2009

G

Garden Equipment 13 2009

Gas Industry 5 2009

Giftware 18 2009

Glassware 15 2009

Greetings Cards 25 2009


H

Hand Luggage & Leather Goods 14 2008

Health Clubs & Leisure Centres 9 2009

Health Foods 22 2003

Heating, Ventilating & Air Conditioning 9 2002

Home Furnishings 19 2009

Home Shopping 13 2009

Horticultural Retailing 17 2008

Hotels 24 2009

Housebuilding 18 2009

Household Appliances (Brown Goods) 11 2008

Household Appliances(White Goods) 16 2008

Household Detergents & Cleaners 16 2009

Household Furniture 18 2008

I

Ice Creams & Frozen Desserts 13 2009

Industrial Fasteners 8 2001

Industrial Pumps 5 2000

Industrial Valves 8 2001

Insurance Companies 12 2009

Internet Usage in Business 8 2005

IT Security 9 2009

IT Training 12 2009

J

Jewellery & Watches 25 2009

K

Kitchenware 7 2009

L

Laboratory Equipment 9 2008

Lighting Equipment 14 2002

Lingerie 9 2010

M

Management Consultants 10 2003

Market Forecasts 1 2005

Meat & Meat Products 20 2009

Medical Equipment 17 2009

Metal Recycling 5 2009

Milk & Dairy Products 23 2009

Mobile Phones 6 2005

Mobile Telecommunications 2 2007




N

Natural Products 2 2007

New Media Marketing 3 2002

Newspapers 17 2008

Non-Metal Recycling 2 2008

O

Office Furniture 21 2008

Offshore Oil & Gas Industry 5 2009

Ophthalmic Goods & Services 16 2008

OTC Pharmaceuticals 14 2010

Own Brands 12 2007

P

Packaging (Food & Drink) 6 2010

Packaging (Glass) 13 2008

Packaging (Metals & Aerosols) 12 2003

Packaging (Paper & Board) 14 2008

Packaging (Plastics) 15 2010

Paper & Board Manufacturing 14 2002

Personal Banking 11 2000

Photocopiers & Fax Machines 14 2005

Plant Hire 13 2007

Plastics Processing 10 2003

Poultry 3 2008

Power Tools 5 2007

Premium Lagers, Beers & Ciders 8 2009

Printing 14 2009

Private Healthcare 20 2009

Protective Clothing & Equipment 7 2009

Public Houses 25 2009

R

Rail Travel 7 2008

Ready Meals 11 2009

Recruitment Agencies (Permanent) 10 2010

Recruitment Agencies (Temporary & Contract) 10 2010

Renewable Energy 3 2009

Restaurants 24 2009

Retail Chemists & Drugstores 16 2010

Road Haulage 22 2009


S

Sauces & Spreads 11 2008

Shopfitting 14 2009

Short Break Holidays 4 2001

Slimming Market 8 2000

Small Domestic Electrical Appliances 11 2007

Snack Foods 20 2010

Soft Drinks (Carbonated & Concentrated) 17 2008

Soup Market 3 2009

Sports Clothing & Footwear 12 2009

Sports Equipment 15 2009

Sports Sponsorship 7 2009

Stationery (Personal & Office) 24 2008

T

Take Home Trade 17 2008

Telecommunications 21 2007

Timber & Joinery 19 2008

Toiletries 22 2009

Tourist Attractions 5 2001

Toys & Games 23 2009

Training 18 2009

Travel Agents & Overseas Tour Operators 22 2009

Tyre Industry 4 2008

V

Vehicle Security 8 2007

Videoconferencing 4 2007

Video & DVD Retail & Hire 8 2005

W

Wallcoverings & Ceramic Tiles 17 2006

Waste Management 9 2008

Water Industry 4 2007

Windows & Doors 19 2008

Wine 20 2009

White Spirits 1 2005

Market ReviewsCatering Market 21 2009

Clothing & Footwear Industry 12 2008

UK Computer Market 11 2004

Construction Industry 11 2009

Contracted-Out Services 3 2007

Defence Industry 7 2003

Distribution Industry 10 2009




DIY & Home Improvements Industry 11 2009

Drinks Market 19 2009

Energy Industry 7 2008

Film Market 2 2009

Food Industry 19 2009

Healthcare Market 10 2005

Insurance Industry 10 2009

The Legal Services Market 1 2005

Leisure & Recreation Market 15 2005

Leisure in the Home 2 2008

Leisure Outside the Home 2 2008

Local Government Services 3 2010

Mechanical Handling 1 2001

Motor Industry 12 2008

Music Industry 2 2010

Office Equipment Industry 8 2006

Packaging (Food & Drink) Industry 1 2003

Passenger Travel in the UK 5 2007

Pharmaceuticals Industry 6 2008

Process Plant Industry 1 2000

Publishing Industry 12 2008

Railway Industry 2 2006

Security Industry 12 2009

Sports Market 12 2008

Travel & Tourism Market 16 2009

UK Internet Market 1 2009

Market Assessment ReportsA

ABC1 Consumer 2008

Activity Holidays 2009

Advertising Agencies 2007

All-Inclusive Holidays 2000

Alternative Healthcare 2008

Audio-Visual Retailing 2000

B

Baby Foods 2006

Baby Products 2008

Baths and Showers 2000

Beds, Bedrooms and Upholstered Furniture 2000

Betting and Gaming 2002

Book Retailing on the Internet 2007

Bottled Water 2003

Bridalwear 2002

Business Postal Services 2008


B2B Marketing 2008

Business Travel Market 2008

C

Cable and Satellite Services 2002

Charity Funding 2005

Childcare 2008

Children’s Publishing 2008

Clothing Retailers 2000

Coffee & Sandwich Shops 2009

Commercial Dynamics in Financial Services 2005

Commercial Insurance for Small Businesses 2009

Condiments and Sauces 2008

Consumer Credit & Debt 2007

Contact Centres 2010

Contraception 2002

Cooking & Eating 2009

Cross-Border Shopping 2000

Cruise Market 2008

Customer Loyalty in Financial Services 2000

Customer Magazines & Contract Publishing 2009

Customer Relationship Management 2008

Customer Services inFinancial Organisations 2007

C2DE Consumer 2008

D

Diet Foods 2009

DINKY Market 2007

Direct Insurance 2010

Direct Mortgages 2008

Domestic Lighting andElectrical Products 2000

Domestic Telecommunications 2006

E

E-Commerce: The Internet Grocery Market 2009

E-Commerce: The Internet Leisure & Entertainment Market 2008

Electronic Banking 2008

EMU — The Impact on the UK Financial Services Industry 2003

E-Recruitment 2006

E-Shopping 2002

Estate Agents and Services 2007

Ethnic Foods 2002

European Electricity Industry 2007

European Gas Industry 2007




European Long-Term Insurance 2008

European Oil & Gas Industry 2007

European Renewable 2008

Energy Industry

European Short Breaks 2008

European Telecommunications 2002

European Tourist Attractions 2009

European Trends in Food Shopping 2009

European Water Industry 2007

Extended Financial Families 2005

F

Financial Services Marketing to ABs 2006

Financial Services Marketing to ABC1s 2000

Financial Services Marketing to BCs 2009

Financial Services Marketing to C1C2DEs 2006

Financial Services Marketing to DEs 2009

Financial Services Marketing to Over 60s 2004

Financial Services Marketing to the Affluent 2009

Financial Services Marketing to the Retired and Elderly 2007

Financial Services Marketing toStart-Up Businesses and theSelf-Employed 2003

Financial Services Organisations on the Internet 2009

The Fish Industry 2001

Forecourt Retailing 2010

Functional Foods 2008

Funding in Higher Education 2002

G

General Insurance 2010

Generation Y 2007

Global Waste Management 2007

Green and Ethical Consumer 2008

Grey Consumer 2009

H

Healthy Eating 2008

Holiday Purchasing Patterns 2009

Home Entertainment 2008

Hot Beverages 2009

I

In-Car Entertainment 2000

Independent Financial Advisers 2008

Individual Savings Accounts 2005

Insurance Prospects 2008

Internet Advertising 2009


Internet Service Providers 2005

Issues and Challenges in the UK Life Assurance Market 2002

Issues in Higher Education Funding 2006

IT Recruitment 2010

L

Lifestyle Magazines 2008

Low-Fat & Reduced-Sugar Foods 2008

The Luggage Market 2000

M

Marketing to Children 4-11 2003

Marketing in the Digital Age 2009

Medical & Health Insurance 2007

Men and Women’s Buying Habits 2008

Men’s Toiletries & Fragrances 2008

Millennium Youth 2002

Mobile Marketing 2009

Motor Finance 2008

N

The Newspaper Industry 2005

Non-Food Sales in Supermarkets 2008

Nutraceuticals 2008

O

Off-Trade Spirits 2004

Opticians & Optical Goods 2010

Organic Baby & Toddler Care 2007

Organic Food & Drink 2010

OTC Pharmaceuticals 2000

Over-40s Consumer 2005

Over-50s Consumer 2009

P

Pay TV 2004

Pension Extenders 2002

Pensions 2009

Personal Banking 2003

Personal Lines Insurance 2007

Personal Loans 2008

Pet Market 2009

Planning for Retirement 2008

Plastic Cards in Europe 2005

Plus-Size Fashion 2009

Private Sector Opportunities in Education 2001

Public Relations Industry 2007

Public Transport 2001





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No part of this publication may be reproduced, copied, stored in an electronic retrieval system or transmitted save with written permission or in accordance with the provisions of the Copyright, Designs and Patents Act 1988.

Published by Key Note Ltd, Field House, 72 Oldfield Road, Hampton, Middlesex TW12 2HQ, Telephone: 020-8481 8750

Stringent efforts have been made by Key Note to ensure accuracy. However, due principally to the fact that data cannot always be verified, it is possible that some errors or omissions may occur; Key Note cannot accept responsibility for such

errors or omissions. Details supplied by Key Note should only be used as an aid, to assist the making of business decisions, not as the sole basis for taking such decisions.

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Key Note Ltd does not hold itself liable for any subsequent legalities.

If you have any queries regarding the CTPS legislation you may find the following website useful:www.informationcommissioner.gov.uk

R

The Railway Industry 2004

Ready Meals 2001

Recycling and the Environment 2000

Retail Credit 2000

Retail Development 2001

Rural Economy 2009

S

Savings & Investments 2007

Saving Trends in the Eurozone 2002

Singles Market 2009

Shopping Centres 2008

Short Breaks 2004

Slimming Market 2009

Small Businesses & Banks 2002

Small Office Home Office Consumer 2001

Small Office Home Office Products 2001

The Soup Market 2001

Sponsorship 2000

Supermarket Own Labels 2009

Supermarket Services 2007

Sweet & Salty Snacks 2009


T

Teenage Fashionwear 2008

Teenage & Pre-Teen Magazines 2009

Teleworking 2003

Trends in Food Shopping 2008

Trends in Leisure Activities 2007

Tweenagers 2005

U

Utilities 2007

V

Vegetarian Foods 2009

Vehicle Breakdown Services 2008

Vitamins, Minerals & Supplements 2009

W

White Goods 2000

Women Over 45 2007

Working Women 2009


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