Demand for celebration cakes in the UK market remains buoyant, according to a number of suppliers working in the sector. Moreover, the market is widely touted as not having yet reached its full potential, and opportunities to target different demographic profiles as well improve management of the category could see the market continue to effervesce for some time.

“Latest statistics from the TNS Superpanel (52 w/e March 2006) show a 10% growth [for celebration cakes] on a value basis. The retail value is now estimated at £135m,” says Lightbody Celebration Cakes sales and marketing director Mark Bruce. “From TNS’ calculations, along with our own, we reckon that market volume is up by 16% in the same period, although I would say there has been some deflation of late.”

That deflation he puts down to some price-fighting on key lines but also a slightly weaker year for licensing, but feels that, with more licensing programmes in the offing, the volume sector of the market will not remain deflated for long. “One in four people buy a celebration cake in the UK,” he says. “That’s a great dynamic to have, but also indicates there’s plenty of opportunity to increase the category.”

Seasonal elements, such as Valentine’s Day, Mother’s Day and so on are driving sales, notes Lesley Loveday marke-ting manager of Leamington Spa-based Elisabeth the Chef. “Seasonal is the faster growing sub-sector for celebration cakes,” she says.

Memory Lane Cakes marketing controller Martin Wiltshire agrees, saying, “Growth has been steady and demand remains buoyant, but we believe that there is still room for expansion through greater penetration. Demand has been highest among children’s cakes, as usual, but adult cakes are in growth. We believe there is more opportunity for adult cakes and for older children, especially girls.”

“Adult gifting is the hardest market to crack,” adds Bruce, “particularly the male adult gifting sector.” Lightbody found that its Crazy Frog cake, based on the mobile telephone character and one of the company’s most successful licensed models, made some inroads into the teenager/adult sector last year, but feels that innovative thinking could achieve much more.

Loveday suggests that “cheeky licences for big birthdays” may be a way to crack the adult market. And, as official FA England licensee to support the World Cup, the company is finding that sales are “outstanding”. It has also recently launched a Doctor Who celebration cake, which she says is selling extremely well.

Meanwhile, Lightbody’s long-term licensing arrangement with Disney sees ongoing popularity for cakes featuring characters such as Winnie the Pooh and the Disney Princess line. But Bruce is already looking forward to the potential of new movies coming out later this year, including Disney’s Cars, Superman the Movie and characters that will target the pre-school sector, such as Dora the Explorer. “Recently, we’ve had a lack of real ‘hero’ licences in the pre-school sector, so it has been under-performing. Traditionally there has not been a gap there,” he says.

The traditional focus for celebration cakes has been in the children’s market, most often linked to film and television, and this is continuing. Inter Link Foods’ division Creative Cake Company has recently launched My Little Pony, Ice Age II and Hallmark’s Forever Friends cakes to retail. “These individual three characters enjoy traditional and hot property status,” says Creative Cake Company managing director Chris Marshall, “but all share a high level of craftmanship and innovation. Natural colours are high on the firm’s agenda, he says, along with decorative fudges flavoured with fruit juices. “We are also working with a number of retailers on a range of personalised, hand-decorated cakes, with an inscription piped to the customer’s choice.”

Indeed, personalised finishing touches are helping to drive the market for both adults and children, with the latest photo-cake technology being developed. “We have seen a sharp increase in sales of photo cakes, where customers bring their own photograph to store and have it recreated on a sugar plaque on the cake,” says Greencore Cakes & Desserts’ commercial director Paul Rhodes. “Today’s consumers want the convenience of buying a delicious well-made cake, but adding personalised finishing touches themselves.”

To take this to another level, the company has teamed up with cake accessory brand Supercook to provide a ready-made and iced cake with a range of icing tubes and toppings. Another success for the firm has been the ‘Bart Simpson Write Your Own Message’ cake, which also includes a tube of icing, says the company. The cake includes a model of Bart and gives the customer the opportunity to add their own message and twist to the iconic blackboard image from the beginning of each episode of TV cartoon series

The Simpsons.

Lightbody works with retailer Asda on photo cakes. Consumers can bring in a picture of a loved one, which can be surrounded by a border – perhaps a specific Disney frame – on top of the cake.

And it doesn’t stop there. As Memory Lane’s Mar-tin Wiltshire notes, “Suppliers are looking for interesting ways to catch people’s attention and complement the theme of their cakes. Sound and light have been used on some cakes, making the products more interesting fun and interactive.”

So what are the main challenges facing category growth in the celebration cake market? Loveday says that profit is continually being challenged both by the retailers and the supply base. “Volume is key,” she says. “Drive your profit via increased sales.”

Bruce believes that retailers are deman-ding innovation, new formats, new designs

and improved category management, leading to less waste. “Celebration cakes are a high-value line with a short shelf life, so waste is key,” he says. “We can target this with better packaging and ranging to improve stocking and waste management.

“It’s not about price points, it’s about value for money,” says Bruce. “It’s important for us to drive the category. In the supermarkets, we can see the potential for a range of celebration cakes over and above the current price structure. In smaller shops, celebration cakes can sell in the £15-£25 range. By definition, celebration cakes are not an impulse purchase and there is an opportunity to provide new reasons to buy one.”

“As long as we support the film and TV industry, there will be a place for licen-sing,” adds Loveday. “With an increasing number of strong licences coming into the market, it will be great for sales, but we will face the challenge of gaining space on retailers’ fixtures.”

Marshall adds that a high level of innovation and hand craftmanship gives the firm confidence it can continue to develop the celebration cake market further.

Meanwhile, Green-core’s advice to retailers is to work with the company to get availability right first and foremost. “There are too many instances of out-of-stocks at store level, which means unhappy customers and lost sales opportunities,” claims Rhodes. “We know from research that if consumers are unable to find the cake they want from their regular store, then they will go elsewhere until they do. We estimate that if availability was 100%, the celebration cake market could go up by £7.5m.”