The end of August should see new production capacity coming on stream at miniature cake producer Greetings for Eating, as part of a £500,000 expansion funded partly by new investors.

The firm is expanding output from 3m cakes a year in response to what the chairman Stephen Smith said was a projected growth of 40% a year over the next three years. It expects to produce 5m cakes a year within a couple of years.

Turnover at the Boughton, Nottinghamshire, firm has grown from £1.8m to £2.8m in the past year and should grow £1m next year, he said.

Most of the growth is likely to be in sales of mini ‘occasion’ sponge cakes to supermarkets. The company currently makes 60g and 120g cakes at about 15,000 and 6,000 per shift respectively on two lines, with designs licensed from Warner, Fox, Disney, Hallmark, Carte Blanche and Carlton Cards.

The company will launch cupcakes soon, said Smith, who set up the company in 1992 as Wellsprings Confectionery to sell decorated fruit cakes to greetings cards shops and other high-street outlets. It began supplying supermarkets in 2003 and now supplies Asda, Tesco and Sainsbury’s.

Moving the warehousing and dispatch operations to a new building will allow for a third production line and a new product development facility. The workforce will increase from 80 to over 90.