Biscuits, Tea Time and IR Data

New research from Information Resources (IR) this week shows that most UK biscuit manufacturers enjoyed a slight value growth over the course of 2001. According to Marketing Week, this upturn in value reflects how consumers are increasingly eating premium products.

In an extensive report on the subject, Marketing Week has detailed the new biscuit sector research which shows that the category is thriving thanks to brand extensions, premium products and sales promotions. Last year, more than 99 per cent of UK households purchased at least one pack of biscuits; and with annual sales in excess of £1.5bn, the market continues to thrive.

However, IR's data illustrates how the sector continues to be starved of true new product development (npd). Aside from Quaker Snack-a-Jacks, genuinely new brands have been conspicuous by their absence. Brand extensions, on the other hand, have been rife, offering manufacturers a far safer option. These extensions have come in the form of new products such as Twix Tops, Jammie Dodgers Dipz and Caramel Fingers, while new pack formats have offered manufacturers further ways to add value to their brands.

Marketing Week argue that this has polarised the market. More than 30 of the top 50 brands have shown healthy year-on-year growth, although of the top ten only Homewheat can really claim to have achieved this without the aid of increased promotional activity. Kit Kat, the largest biscuit brand, sold more than 60 per cent of sales by volume through some kind of offer in 2001. These sales alone would make Kit Kat one of the top 25 biscuit brands.

Private label sales are thought to have continued to slump though. Aggressive temporary price reductions and low pricing have made it increasingly attractive for consumers to trade up to branded goods. And as promotions continue to drive the market, loyalty is at a premium. As a result, entry into the biscuit market has become more and more difficult, argues Marketing Week.

This aside, IR believe that the biscuit sector faces minimal threat from rival products such as bagged snacks, chocolate and sugar confectionery, since all these markets are showing a decline - 0.1 per cent, 6.8 per cent and 2.6 per cent a year respectively. On the other hand, all three sectors show strong growth in the grocery multiples - the decline is occurring in impulse outlets such as newsagents, corner shops and off-licences. The concern for the biscuit sector is that traditional impulse categories, such as crisps and chocolate, are beginning to strengthen their position in the outlets where biscuit sales dominate.

All articles 2006-22 written and edited by Mel Crowther and/or Nick Thomas unless otherwise stated.

• IRI
• All news