Biscuit sales in impulse are growing +6% as suppliers react to changing trends in savoury and on-the-go biscuits. For retailers, ensuring their range reflects these trends and doesn’t focus entirely on price can help them to their share of this healthy growth.
It’s incredible to think that the biscuit industry in the UK is worth £2.6bn. That’s a whole lot of cash for a category that perhaps doesn’t get the management treatment it deserves in convenience. And it does deserve it – the overall biscuits category is enjoying growth, but sales in impulse, at +6%, are outperforming the mults.
According to Burton’s Biscuit Company this growth is down to what it labels ‘treatier’ brands and savoury biscuits.
Let’s turn first to savoury – currently growing at 5% year-on-year. One major change in the category this year was the rebranding of all UB savoury biscuits under the Jacob’s banner – with the exception of Carr’s.
Part of United Biscuit’s masterbrand strategy, the redesigned packs began rolling out in January and Ted Linehan, Director of Savoury Brands at United Biscuits says the revamped logo brings a smart, contemporary style to the range. “Following the successful introduction of the Jacob’s masterbrand campaign, this will help us to continue growing through stronger on-shelf impact and easier range navigation for the brand in-store,” he says. “We are confident this will help to extend Jacob’s appeal to all our customers.”
Jacob’s has a near 30% share of the savoury biscuit and branded snacks market and is currently worth over £193m across the two categories, growing by more than nine per cent year-on-year in each.
There have been a number of interesting launches in the last year on the savoury side of things, including a couple from Burton’s. Fish ‘n’ Chips and Cathedral City Baked have collectively achieved £15.9m sales YTD, the equivalent of 49% of the total savoury biscuit category growth for the year.
“This has further cemented our position, not only as a category innovator, but as being instrumental in driving growth within the savoury segment of the impulse channel; a segment which has traditionally underperformed within impulse,” says David Costello, Head of Customer Category Management at Burton’s Biscuit Company.
Savoury may be going through some interesting developments but sweet biscuits remains the largest sub-category in biscuits, with Everyday Treats being the largest segment, £408.2m, and growing at +2.4% .
Mondelez International has developed its portfolio in the last year, adding Chips Ahoy! to its range. The worldwide number one cookie launched in September with Chips Ahoy! Popcorn Candy Chip and Chips Ahoy! Crispy Choco Caramel. The launch will benefit from an £8m marketing investment over the next 18 months, and tantalisingly, Mondelez says there is more to come in 2015 for the brand.
Susan Nash, Trade Communications Manager at Mondelez International, says: “Our ambition is for Chips Ahoy! to become a become a leading cookie brand in the UK. Barny is already the number two brand in children’s biscuits, with 7% penetration, putting it in the top 5% of all new biscuit launches over the past four years.”
When it comes to ranging there has been a movement in convenience towards cheaper, everyday biscuits in an attempt to compete with the discounters. “Fear of losses to discounters has seen some retailers focusing on stocking lower-priced, everyday biscuits and private label, which has actually been shown to have an adverse effect in the long-term, devaluing the category in-store,” says Burton’s Costello.
His advice is to focus on what makes them different, such as the bias towards impulse purchase.
“With 33% of biscuits bought on impulse, 45% of which are treats, stocking ‘treatier’ brands that will appeal to impulsive shoppers is key,” he says. “Convenience retailers should look to drive interest toward the biscuit aisle, with effective use of POS and signposting for the biscuit fixture, particularly with seasonal products and NPD.”
Brand loyalty, or not?
There have been a number of changes to how consumers shop the biscuit fixture, with several factors playing a part in the shift. Brand loyalty in every category is becoming more difficult to maintain, thanks to what has become known as shopper promiscuity. “The secret here is not to try to compete on price on low cost staples, but rather to focus on shopper missions to help differentiate convenience stores from big stores and discounters,” says Costello. “We would advise convenience retailers to focus on well-known and well supported brands to drive added value impulse purchase.”
Sales show that biscuit shoppers are on the lookout for more indulgent biscuits that can be enjoyed as a treat. The launch of Maryland Gooeys being a perfect example of this, with the product hitting £10m in sales in its first year.
On-the-go snacking has also had an influence on the biscuits category, with both single serve and multipacks gaining ground.
belVita Breakfast are available in single 50g portion packs, in two variants: belVita Strawberry Duo Crunch and belVita Honey & Nut. These portion packs aimed at breakfast on the move, providing a more enticing offer for small store shoppers.
The belVita concept was founded on the insight that one in three people in the UK skipped breakfast during the working week, the main reason being a lack of time. ‘On-the-Go’ breakfast formats therefore present a lucrative opportunity for retailers.
belVita brought further innovation to the category at the end of 2014 with the launch of belVita Tops. belVita Tops are made with wholegrain cereals, with a Choco Hazelnut or Strawberry topping. These new additions will aim to drive incremental sales and attract new consumers to the market by offering a different taste and texture experience.
belVita will be supported by an £8m marketing investment in 2015. More widely, Mondelez International has invested heavily in the biscuits category, with 26% of the category’s investment coming from Mondelez International.
Burton’s single-serve snack pack range includes a 30g Maryland Gooeys twin snack pack, and a 40g bag of bite size Maryland Choc Chip Cookies, both available as 39p PMPs and plain packs (rrp 45p).
“Sweet biscuits are already the number one choice for snacking in the home, but people have a very limited offer of traditional biscuits when they’re on the move, so we are enabling retailers to plug a huge gap in the market,” says Costello.
Only 5% of traditional biscuits are eaten out of home, and with 5.8bn snacking opportunities in the workplace alone, there is huge potential for the biscuit category within this space.
Local sourcing plays an important role in every aspect of convenience shopping and in biscuits that means attention turns to Border Biscuits. The Lanark-based company remains family-owned and has sales of £14.5m. In short, it’s a serious player and the huge 32-strong range on offer helps draw attention to the biscuit fixture.
Lesley Ann Gray, Brand and Sales Manager at Border Biscuits, says the company has had a strong start to the year and recently recorded a 13% increase in sales, to go with additional national listings across the portfolio.
“We have recently entered the top 20 Scottish brands for the first time, jumping seven places to get there and we are currently the third fastest growing sweet biscuit brand in the top 20,” she says. “In particular, our Classic range which we’ve been baking for over 30 years is at the heart of our brand portfolio and continues to go from strength to strength.”
That strong start to the year mentioned by Gray is in part down to Border’s #GingerJanuary campaign, which ran across Facebook and Twitter, to celebrate the success of its best selling Dark Chocolate and Milk Chocolate Gingers. “The demand for our Dark Chocolate and Milk Chocolate Gingers is at an all-time high and we’ve been overwhelmed by the support for our Ginger January campaign,” says Gray. “We’ve enjoyed interacting with consumers who have been celebrating the event in their own unique way.”