Enjoyment, indulgence and the growth of the café culture are the main ingredients of the recipe for muffins’ booming success. One measure of this is the decision by the Office of National Statistics (ONS) last month to add them to the basket of goods it uses to determine the retail price index.
Research carried out by TNS Worldpanel on behalf of Rich Products charts its meteoric rise as, together with cookies and other bakery products, muffins are fast becoming the ’must-have’ social accompaniment to a cup of coffee. The increasingly social aspect of these buying habits is underlined by the research finding that one-third of all cakes and pastries are now purchased from coffee shops.
This trend towards consumption for pure pleasure is further reinforced by the fact that 85% of doughnuts, 83% of cake muffins and 61% of cookies are bought for enjoyment. Meanwhile, 42% of muffins (47% in-store), 55% of doughnuts and 41% of cookies are, says the research, consumed for indulgence, compared with 36% of croissants.
But while the research shows that the value of the retail muffins market has grown by 6.4%, the actual volume of sales has remained static. Gail Lindsay, marketing director at Rich Products, says the growth in value is down to consumers "trading up" and paying a higher price for their muffins, often sharing them as a treat.
Meanwhile the burgeoning out-of-home market has implications for the in-home market. She adds: "The café culture is having an effect on the take-home market. People are used to a higher quality, larger product in a coffee shop and that’s having an effect on the retail environment as well."
For Michele Young, retail and brands director at BB’s Coffee & Muffins, the fact that muffins have been added by the ONS to the basket of goods for the RP Index shows that muffins have "very much come of age". She too points to the social side of muffin consumption as a key growth factor. "As café culture has taken hold in Britain, the habit of ordering a muffin, cake or pastry with a drink is becoming more entrenched. At BB’s, 90% of the sweet snacks we sell are muffins," she says.
Young notes that BB’s is actively expanding its take-home market and adds: "We believe this is a trend that can only accelerate, as formal dining at home decreases and consumers like to take home the brands they enjoy in the café."
The research by TNS Worldpanel charts the changing habits of consumption and preferred flavours across a range of cakes and pastries and indicates areas of growth, where penetration and frequency have risen and fallen and where the prime opportunities for expansion exist.
The study shows that the growth in sales of muffins has been driven predominantly by older children and young adults, but points out that the penetration and frequency of consumption had "plenty of room for growth" among men and older women, mainly through "flavour targeting". However, Lindsay says that so far there has been some resistance to switching to more "adventurous" flavours, with a tendency to stick with long-time favourites, such as blueberry and chocolate.
The Rich report confirms that, despite the potential for growth, penetration and frequency "have in fact declined of late". Penetration of muffins has fallen from 4.1% in 2004 to 4% in 2007, doughnuts from 10.1% to 8.8%, while cookies have risen from 8.9% to 9.3%. These compare with bagels, which jumped from 1.5% to 3.6% and brownies which rose over the same period from 0.7 to 1.7%.
However, Lindsay says: "We believe the research shows more opportunity both out-of-home and in the retail environment to increase the frequency of purchase, which will drive more growth." Rich concludes that if consumers had half a muffin more over a two-week period, it would be worth an additional 38 million occasions, equating to a potential 24% year-on-year growth.
Young, who describes the typical muffin customer as "female, aged 25-45, with kids", expects the market to grow by 10% this year and reckons that an increasing proportion of it will be made up of speciality - "low-fat, extremely indulgent or savoury" - muffins. Currently savoury muffins account for less than 5-10% of BB’s total sales, but she adds: "We believe there is a great deal of potential growth in the savoury sector and are actively researching new flavours and fillings."
In its breakdown of data relating to penetration, the Rich report reveals that out-of-home consumption is building strongly while pene-tration decline is driven partly by the fall in frequency, arising from fewer muffins being put in lunchboxes. The research queries whether this drop in frequency is as a result of format issues or the introduction of the muffin bar. But Lindsay says the often-strict health messages relating to obesity, conveyed by schools to parents about what their child should and should not eat, had also contributed to a fall in the number of muffins being put in school lunchboxes.
The research also provides a detailed insight into when people buy and eat their "treats". Most consumption takes place between mid-to-late morning and early afternoon, while cakes and pastries are largely consumed at weekends, particularly on Saturdays. According to Rich’s report, 30% of muffins are eaten at the weekend, compared with 26% of cakes and pastries, 12% of cookies and 21% of doughnuts. The proportion of morning goods consumers of muffins also falls with age.
The trend towards out-of-home consumption has led to recent value and volume growth for cookies, which has "contributed to the longer-term success of muffins". Lindsay says: "From an in-store bakery perspective, we have seen the value of the cookie market go up by nearly 11% - £3.45 million - over the last year and the total value of the cookie market is now £35.1m."
She says this growth is mainly because consumers are trading up and opting for premium brands, with growth in this area of 28%. "The number of occasions has gone down but again, in a reflection of what is taking place across a range of markets, the consumer is looking for a better-quality product. They buy it less frequently, but when they do, they want to enjoy it," she adds.
While standard cookies grabbed the largest portion of the market, the strongest growth was seen in the premium sector. Lindsay says that data on sales in the major supermarkets revealed a slight decline in Tesco but strong growth in Sainsbury’s and, in particu- lar, Morrisons.
In a summary of the prospects for sales of muffins, Rich’s research concludes that weekend breakfasts and weekday lunches and lunchboxes "provide the best opportunities for expanding occasions". But producers will be watching most closely to see whether the refinement of the market - with people opting to pay more for a better quality product - continues and to what degree it will fuel expansion of the retail market.