The market for small treats has benefited as recession-hit consumers seek comfort in cakes. "Consumers still appear to have a taste for small cake products," says Michael Evans, communications manager for cakes giant Greencore. "Tubs of mini cake rolls, bars, flapjack bites and the like are still fairly prominent in retailers’ fixtures, with almost 90% of households buying small cakes, partaking on average 15 times a year," he says. Indeed small cakes make up the largest sector of the £1.3 bn ambient cake market, standing at £464m and growing at 6.6% per year. "Promotional activity has inevitably helped generate some of this growth," he explains.
Meanwhile, at ingredients supplier BakeMark, Helen Sinclair, lead category manager for foodservice, has picked up on similar trends. Consumers are changing their shopping habits and looking around for the best deals to try and economise rather than trading down, she says. "Some consu-mers are more concerned about price than a year ago, but they are also not prepared to compromise on quality. Consumers are looking for value for money."
Research in October 2008 by the IGD, entitled Adapting to Change - Shoppers and the Credit Crunch, suggest that while 57% of shoppers made an effort to economise on food shopping, only one in 10 felt they compromised on quality, she says. "Consumers are also more mindful that they don’t waste food and look for individual portions to avoid wastage," adds Sinclair. "We have seen this trend taking place in both the home and foodservice sectors." The trend for single treats led BakeMark to launch an individually wrapped Fairtrade Rootz range, including flapjacks, muffins, shortbread and brownies.
Southover Food Company, nominated distributor of Kate’s Cakes, also reports that individual wrapped cakes continue to grow in popularity, "mainly because people are looking for the quick grab-and-go option", according to Sean Beckett, national sales manager. He says: "The trends have also changed slightly, because a wider variety of products are now available. But the favourites are still the same, with brownies at the top of the list. Price continues to be a focus."
So, would other suppliers agree that demand is up? And what does the nation look for in a recession-busting treat? Parry Hughes-Morgan, MD of the Handmade Cake Company, which supplies customers including BHS Café and Lord’s cricket ground, says: "Consumers are no longer prepared to settle for mediocrity. It is more of a conscious treat decision. So if pampering is on the cards, do it properly."
He has noticed that consumers want best-quality and are thinking much more about what they buy. Cakes such as cupcakes, macaroon and mini classics such as carrot cake are proving popular. "There’s a retro factor at work," says Hughes-Morgan. "In a recession, consumers seek reassurance, comfort, tradition, nostalgia and proven values. Victoria sponge and Millionaire shortbread are popular for example." Another trend is towards brighter packaging to emphasise that cake eating is a fun pastime, he adds.
In retail, Marks & Spencer recently developed its cakes offer with its new Cake Shop concept, currently sited in the seasonal area of its food halls. Products such as small tarts, bites, tubs and mini rolls are colour-coded by flavour profile and blocked together in fixtures to enable consumers to shop for many occasions with ease.
David Smart, production director at Greenhalgh’s, the Bolton bakery chain, has noticed a trend that he says is hard to miss. "Since the economic recession, customers are buying more little treats. We’re selling an awful lot of cakes, biscuits, vanilla tarts and marshmallow cakes - it’s quite noticeable." In fact, even though customers are very price-conscious, he estimates sales are up more than 10%.
So the purveyor of quality cake apparently has nothing to fear from this belt-tightening, as all are agreed that, with the recession, consumers are finally learning to value quality over the cheapest option - at least when it comes to comfort food.