The biscuits category is evolving, with a greater emphasis on health. But consumers still want the comfort of a tasty biccy.
In the UK, the biscuit market is worth £2.5bn with value growth of +1.8% vs last year, according to Nielsen.
The UK biscuit market can be split into three sub-categories: Sweet, Healthy and Savoury.
“To unlock the biscuit opportunity we need to understand the biscuit shopper and consumer of today; why, where, when and how they select and consume biscuits, so that we can develop products and solutions that are relevant and really connect with their needs,” comments Susan Nash, Trade Communications Manager at Mondelēz International.
“Today’s consumers are looking for products that fulfil functional or emotional needs or both. While the time of day biscuits are consumed is key to understand, as it reveals consumer needs. While many shoppers are seeking a balanced diet and lifestyle taste remains the consumer’s most important decision factor.”
The key to driving category growth is offering products that meet the needs of today’s consumer. Mondelez has identified two key pillars: Wellbeing and Treat.
Consumers are increasingly concerned with their wellbeing. 85% of consumers claim they are trying to improve some of their diet to become healthier (IGD) and almost one in every three food items are now chosen for health (Kantar). When it comes to snacks, 46% of occasions are chosen for health, growing at +7.7% (Kantar).
Although savoury biscuits are by their very nature more permissible, the category has not seen growth in the past few years. At a macro level Mondelez insights indicate consumers are looking for exciting tastes, new textures and light options.
Mondelez’ research shows that: 64% of us agree that breakfast is the most important meal of the day yet one third skip breakfast.
There are 260 million UK breakfast occasions every week. Now 19% of consumers eat breakfast biscuits regularly for breakfast compared to 13% who eat cereal bars and 9% who eat instant porridge.
Breakfast Biscuits are key for the morning and are well placed as 82% of them are consumed between 6am and 10am.
The sweet biscuit subcategory is the largest of the three. In recent years there has been a trend of switching and trading-up, from everyday, more traditional biscuits to more premium biscuits.
“From our insight and consumer research, we understand that consumers want to really enjoy their biscuits; they are looking for a little treat in their everyday routine that delivers a special moment,” adds Nash. “Brands with the right equity along with great taste and appropriate formats can really deliver to these need states.”
The special treat sub segment saw a 5.3% growth in FY 2018 as consumers trade up from commoditised offers to more indulgent offers. Consumers are looking for new textures and tastes as well as indulgence, and products in the right formats.
Stuart Graham, Customer Marketing Director at pladis UK & Ireland said: “Our outlook for the biscuit category throughout the year and looking ahead is positive. We’re seeing market growth return to higher levels compared to 2018 and there’s a big opportunity for convenience retailers to tap into new sales opportunities by stocking the best-selling biscuits.”
2018 was a challenging year for the sector, in part due to the unseasonably warm summer and changes to promotional activity. However, it’s important for convenience retailers to consider the huge contribution that biscuit sales continue to make within UK grocery, with sales worth £2.6bn and household penetration of 99.1% (Kantar).”
“The needs of modern shoppers are continuing to evolve,” added Graham. “As consumers move away from traditional eating patterns, opting for more frequent, smaller and less formal eating occasions, snacking now presents an even bigger opportunity for retailers.”
Nine out of 10 shoppers claim to snack multiple times every day, while of these, one in 14 (7%) forego meals altogether and simply rely on snacks to keep them going (The Hartman Group).
Research by pladis into snacking habits reveals there are five key drivers of snack consumption for British shoppers.
Balance is about choosing snacks to look good and feel good. Sustain involves snacking for the essential fuel to get through the day.
Indulgence means seeking out a treat or reward, while Discovery is trying new flavours and textures.
The fifth driver is Togetherness, which sees consumers sharing a snack during moments of enjoyment with friends and family.
Category-wide, pladis has identified a £330m sales opportunity for biscuits within snacking, and the firm predicts that this will be driven by products which best align with these five drivers. In the convenience channel, biscuits have a retail sales value of £280m (Kantar) and as shoppers increasingly rely on small top-up shops, there is a significant opportunity for store owners to stock products which best align with these drivers to maximise sales, Graham says.
To compete with the multiples on biscuits, Graham suggests independents get their range right.
“Independent retailers have limited space in store, so using this space in the most efficient way to drive sales is really important,” he says. “Ultimately, making your store convenient and easy for shoppers to visit will keep them coming back.”
While innovative NPD is important to drive excitement amongst shoppers, it’s important to remember that 80% of sales come from 7% of products (IRI), so stocking the right range is vital, Graham points out.
Retailers need to master merchandising to maximise the sales impact of the biscuits category, Graham believes.
“With biscuits tending to be an impulse purchase, they offer retailers of all shapes and sizes a golden opportunity to maximise sales throughout the year,” he says.
Biscuit consumers are also important as they spend longer in store, buying more items and spending more than the average convenience shopper (HIM!). The biscuit category is therefore a key category to get right in order to retain these high value shoppers and drive incremental snacking sales.
“But when we compare the UK biscuits landscape to other impulse categories, we can see there is more we can do to promote further growth,” Graham continues. “The category still offers fantastic potential for expansion into new occasions and formats, and there are also opportunities to drive value via premiumisation.”
The way people are consuming biscuits and other snacking products has changed in recent years. In the convenience retail channel, on-the-go biscuits now represent 24.6% of value sales in the category. The latest data from IRI shows that on-the-go biscuits has grown 30.3% in the past two years, whilst take home biscuits grew by 4.3% in the same time period – so this should be considered when merchandising impulse products.
“With the spotlight on value, we work closely with all our retail partners to ensure we continue to drive growth into the category and support retailer sales,” adds Graham. “For example, as our Better Biscuits category advice indicates, PMPs play a vital role in demonstrating value to consumers, particularly in convenience. Specific promotional execution for retail clubs is growing in importance and our field sales team work with retailers and wholesalers to ensure we have great in-store execution.”
The increased focus on quality, health and free-from options has had a major impact on the sweet biscuits category in the last 12 months.
Whilst everyday and treats are driving growth in sweet biscuits, cereal bars and healthier options have also made an impact, with the ‘health’ segment expected to grow by 14% to 2021 (Kantar) as consumers look for lower fat, salt and sugar options that don’t compromise on quality, in addition to their usual favourites.
“We’re committed to enabling consumers to make informed choices, allowing them to enjoy biscuits and snacks which suit their individual lifestyle,” comments Isabel Lydall, Category & Insights Controller at Burton’s Biscuit Company.
“We also recognise the importance of offering a variety of permissible snacks to cater to different consumer needs and occasions and have a wide range of initiatives to drive the agenda on sugar, portion control and calorie reduction.”
Earlier this year, Burton’s launched a sugar free alternative to Maryland Cookies, followed by extensions to the Maryland and Jammie Dodgers Minis range of permissible snacks under 100 calories.
Shoppers still like to indulge every so often and treatier biscuits are also driving the market. Everyday treat biscuits are growing over twice the rate of the market (Nielsen) as shoppers take the opportunity to treat themselves in between healthier snacking.
An increasing amount of space is now being given to healthier options and cereal products, with space for chocolate biscuit bars (CBBs) being reduced in some retailers.
Manufacturers are also responding to growing demand for free from alternatives, with a rising number of brands tapping into the market for those with food intolerances, or those experimenting with gluten/lactose-free diets.
“The market for price-marked packs remains hugely important for the impulse sector, with many shoppers looking to PMPs as a source of value, and PMPs of bestselling brands also providing them with the quality assurance they are seeking,” adds Lydall.
“Biscuit shoppers are impulsive, so utilising PMPs to drive impulse purchases us a great way to boost profits.”