Cakes and cake bars represent a large and relatively mature market which Mintel values at £1.63 billion in 2009. Sales remain buoyant with in excess of two thirds of adults regularly consuming cakes.
Portability has emerged as a key issue for many consumers, particularly the 3 million parents with children under 4-years-old and the 3.8 million with children aged 5 to 9 years old, which has helped increase sales of cake bars and individually wrapped cakes, the fastest growing segment of the market.
Reformulations along the lines of the fruit-based Evoid Cola, could help drive further penetration of the school lunch box market. Individually wrapped cakes and cake bars have already benefited from the perception that they are less unhealthy than crisps or chocolate.
Cakes targeted at specific occasions such as Christmas or birthdays have out-performed the market, benefiting from a growing consumer interest in celebrations such as Easter and Halloween.
Half of consumers like to treat themselves to cake from time to time. But this sentiment is more pronounced among older consumers and those who tend to eat or serve cake for special occasions and afternoon tea.
Cakes are established snacks for the home but have yet to reach the same level of penetration in the on-the-go snacking market. The snacking at work occasion has the potential to broaden the existing cake user base if wrapped cakes and cake bars are given greater prominent in office vending machines.
Multiple retailers (80%) are the dominant force for cake and cake bar retailing, mirroring their strong position elsewhere in the wider food category. Cakes lend themselves well to their sale through multiples given their ease of display. However, there is evidence that many multiples have cut back on the number of cake and cake bar lines that they stock during the recession. Although they remain a popular product to place alongside morning goods and biscuits as well as for end-of-aisle promotions, retailers have chosen to drop some premium lines as the recession took hold and some consumers traded down.
The market for cakes and cake bars is set to continue to evolve with health an especially important area. Volumes are set to remain largely stable with added value the main driver in raising the value of retail sales. Innovation is set to continue as the sector looks at ways of further stimulating sales from consumers who, while they like to eat cake, are changing the way they consume the product. Areas such as indulgence and crossover with products outside of the cake market are set to continue. Brands will strengthen their presence as the recession fades despite the efforts given recently by retailers to improve the profile of own-label.