Cake-makers consolidate in changing market

By Catherine Boal

- Last updated on GMT

Related tags Baking Premier foods

The UK baking industry has seen significant changes over the past
year, in particular in the cake market as larger food processors
jostle to consolidate their position in the lucrative sector,
according to a new report.

Leatherhead International's UK Food and Drink Report 2007 delves into the main industry shifts in the cake sector and singles out producers such as Premier Foods, Northern Foods, Inter Link and McVities as market heavy weights. According to the market research group, the most significant development in the cake sector last year was the acquisition of RHM by Premier Foods – turning the company into the UK's largest food processor. RHM's cake business, Manor Bakeries, reached sales of £241 million (€357.7m) with its Mr Kipling, Cadbury and Lyons brands. Competitor Finsbury Foods is also looking to increase its market share, having made the most acquisitions last year. The bakery giant snapped up the California Cake and Campbell's Cakes companies for £7.4 million (€10.9m) and United Central Bakeries (UCB) in a deal worth £2.5 million (€3.7m). UCB supplies retailers and independent grocers with potato cakes, breads and scones. These acquisitions have given Finsbury a road into the niche gluten-free and low-fat markets as well as building on its profitable position between craft bakers and larger industrial suppliers. As specialised sectors begin to make a greater impact on the market, smaller companies are gaining a foothold. In the weight management niche, Anthony Alan Foods which owns the licence to produce cakes for the Weight Watchers brand, holds around half of the market share and is expected to grow as the 'better for you' cake market expands in line with consumer demand.

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