Cake makers keen to keep it in the family?

Cake makers have suffered recently as a result of the emergence of the low-carb diet trend, but cake sales in the US have in fact been stagnating for at least the last six years, according to a recent market report, while Europe appears to be going to same way. UK cake sales were up by 9 per cent to £1.7 billion between 1999 and 2003, but this increase has little to do with surging demand - according to market analysts Mintel , the rise in value is linked to higher sales prices offsetting higher input costs. Mintel's survey suggests that households organised into families are more likely to eat cakes than single person-based households, but a further breakdown of the figures shows that it is the over-65s who are most likely to be cake eaters - a demographic with not much more than a short-term future, notwithstanding the fact that individuals are living longer than ever. People between the age of 25-65 are classified as medium cake 'users' while those between 15-24 - the core market for future growth prospects - show 'markedly less interest' in cakes, according to the report. But there are potential areas of growth, if cake makers can successfully target niche areas. Mintel's report suggests that 27 per cent of UK consumers will indulge in a cake, almost always buying on impulse - a factor which cake makers must take on board if they are to produce the kind of exciting, eye-catching product which will attract the impulse buyer. Other niche areas are low-calorie cakes (bought by 22 per cent of consumers) and low-carb/salt/sugar cakes (around 9 per cent). But the survey also shows that despite the best efforts of marketers to attract new consumers, a hefty 14 per cent of consumers will never touch cakes at all, while a further 17 per cent said they rarely ate cakes or cake bars because they were watching their weight. These consumption trends are also qualified by demographic factors. Women, for example, are more likely to buy cake as an indulgence - but they are also most likely to be concerned about their weight. Families with children are also seen as most likely to be indulgent cake eaters - but consumption occasions are far from regular, with cake being seen as a rare treat for all the family. Parents are also likely to be increasingly concerned about the health of their children, another challenge for cake manufacturers. Concerns about the rise of obesity to epidemic levels - among both adults and children - are bound to impact demand for cakes and cake bars with their high fat image. Faced with two possible lines of attack - rekindling the family spirit or catering for today's dysfunctional society - cake makers have, not surprisingly, perhaps, opted for the latter, with a range of innovative new products focused on impulse, indulgence and health and targeting demographic groups which they have persistently failed to reach in the past. UK group Inter Link Foods, for example, is venturing into themed cakes with a recent licensing deal with Disney - a move which it hopes should rekindle interest in cakes among the increasingly elusive youth market - as well as target the markets for indulgent and healthy cakes. Others have taken a different tack, with another British firm, Finsbury Food Group, recently rolling out a range cakes under Nestlé chocolate brands such as Rolo, a move designed to leverage the dynamism of the confectionery sector. Product innovation is only part of the solution, however. Traditionally weak when it comes to advertising, cake manufacturers are now fighting for share-of-mind with a range of other snack products, from chips and crackers to cereal bars and chocolate, and will have to beef up their advertising spend to ward off the competition. And packaging could be another area of innovation for cake makers. With wrapped cakes already accounting for over 80 per cent of total cake sales in the UK in 2003, finding new ways of stimulating consumer demand and increasing convenience could be vital to future growth.

Cake makers keen to keep it in the family?

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