Although craft bakery retailers may look at the growth of café culture and the dominance of the coffee shop chains on the UK high street with negativity, it certainly is not all bad news. Sweet pastries, in particular, look to have benefited from the rising numbers of consumers buying a morning or afternoon coffee and frequently a sweet pastry to go with it. Jon Smythe, UK marketing director for IAWS, says that despite the doom and gloom often spoken about in other sectors on the high street, bakery is holding its own, with Viennoiserie in particular doing very well.

"Based on the latest Kantar Worldpanel data, Viennoiserie is seeing 8.6% growth year-on-year, which is the kind of figure we like to hear," says Smythe. "There are many factors driving the positive performance of this area of the market, such as the economic climate the fact that people are withdrawing from high-ticket items, but are still looking for sweet treats."

Smythe says that the data obtained by IAWS, parent company of Delice de France and Cuisine de France, has not flagged up any trading-down from consumers. "Actually we’re seeing more spend, more volume, more often," he adds.

"Looking at this category from a broader market perspective, the national obsession with coffee and café culture, and the very impressive growth of the coffee chains and independents, is driving further consumption of this product area," explains Smythe. "According to Allegra Strategies, people now visit coffee shops 3.1 times a month, compared to 2.1 times a month this time last year. We are spending more on out-of-home coffee than we spend on electricity £450 a year on coffee and, most importantly, 71% of consumers will buy a food product to consume with their cup of coffee." He says there is still very much a focus on products such as croissants and Danish pastries for consumption with coffee, because, taste-wise, they work very well together.

When it comes to patterns of consumption, Smythe says that due to the relatively temperate climate in the UK, sweet pastries are consumed all year round. "What we do find is that the deeper darker flavours, such as chocolate and coffee, tend to do better in the autumn and winter, while fruit flavours are a more popular option in the summer.

According to Vandemoortele, sales of sweet pastries namely Danish and puff pastry products continue to be resilient in the current environment, and translate to £48m worth of sales a year (Kantar Worldpanel data 52 w/e 30 October 2011). "Danish pastry sales have maintained their value and volume over the last six months compared with the same period last year," says the firm. "Innovation in this area is apparent, with new Danish shapes such as the ’bear claw’, launched earlier in the year, helping to keep the category fresh and interesting. In terms of flavours, authentic fruit-filled sweet pastries continue to dominate the innovation in this area of the market."

It adds that the traditional puff pastry market has seen strong growth in the same period with a 14% increase in value and 11% in volume, driven by people buying more frequently. "This year is the first year the retail market has sold puff mince pies all year round, due to shopper demand, and it is proving to be a key line in the puff pastry category."

Meanwhile, Marion Burton, marketing manager, Ocean Spray Ingredient Technology Group, says the growing cost of commodities has encouraged bakers to diversify into premium segments, where top-end sweet pastries justify their price tag by being perceived as an affordable indulgence. "Equally, the increasing popularity of snacking on-the-go has led retailers to stock a wider range of loose baked goods. Of these, sweet pastries remain one of the most popular treats, with 38% of consumers purchasing a fruit-containing pastry in the last six months," she says.

Flavour trends and NPD

One bakery trend also present in the sweet pastry market is that of mini-versions, which Smythe puts down to factors such as convenience, health and flavour intensity. "One of the things we’ve been finding with lots of products in this category is that people are more and more interested in new flavours. For example although fruits such as apple continue to do well, citruses and raspberry flavours are increasingly popular." That being said, he says, traditional products are also doing very well in the market. One particular area of growth is the premiumisation of the traditional, says Smythe. For example, people buying a croissant may look for something with a ’named’ butter.

"We’ve also noticed that consumers are becoming increasingly interested in brands," adds Smythe, which he says is largely down to the issue of trust, with consumers wanting to treat themselves, but not willing to take a risk with something really different. As a result of this trend, Delice de France recently teamed up with Toblerone to launch a branded hand-held pastry this summer. "You have to make sure you stay true to the brand values and are consistent, but people are willing to pay that little extra for something new, but that they trust, because they are familiar with the brand. It’s innovation that’s a development on a theme, rather than a real step-change," he explains.

Although guidelines on salt and the issue of health are clearly factors that need to be looked at, adds Smythe, the focus on enjoyment is very important. "There are definitely areas we could look at (in terms of healthier products) how we could potentially use more bread-based products, rather than pastry, for example, by making turnovers using a bread base rather than a pastry base. These are things we have looked at, and there will be ideas coming from us on this in the New Year."

Stuart Chapman, category executive for Lantmännen Unibake, concurs that the area of Viennoiserie is growing really well, with traditional products such as all-butter croissants, pains au chocolat and pains aux raisins pushing that growth. "What’s really good to see if that it’s not just value growth, but unit growth as well," says Chapman. When asked what’s driving the growth of those particular products, he says that the growing trend for sweet pastry products at breakfast is certainly a key factor. "As we’re coming back out of the recession, convenience is really starting to win through, and we’re starting to see a consistently good performance from breakfast and out-of-home purchases for example from people buying food on the way to work. It’s really helping to drive sales of single-serve items, of both Viennoiserie and Danish products," he explains.

Chapman says he thinks café culture is definitely having an impact on the growth of this area of the market. "The eating-out market is holding up really well, and what’s winning is fast-casual in place of fine-dining. Also, in other areas of the market, shoppers have been buying on promotion, and shopping on a budget, but with the category that we’re in it’s fairly impulsive, and people are still indulging and are happy to pay for a quality product," says Chapman. "For both Viennoiserie and Danish, value sales in retail are outgrowing unit sales," he adds.

Regarding development, he feels the focus has been on producing really good-quality products, rather than on major NPD, but he says there have been a number of innovative products coming through. Lantmännen recently launched a multigrain croissant, which he says has been selling through Asda for a few weeks, and Tesco’s Finest range includes its chilli and chocolate plait.

Sue Power, head of category management at Délifrance, explains that the in-store bakery (ISB) Viennoiserie market has seen strong volume and value growth, reflecting the increasing consumer demand for these types of products. "We know this growth is being driven by new consumers coming into the sector, which is very positive. Consumers are increasingly looking to buy Viennoiserie from in-store bakeries," she explains. "We know there have been switching gains, with consumers switching from plant products to ISB and, in my view, this is because there is more variety, a more indulgent offering in ISBs and also the option for single-serve items. Loose Viennoiserie items are really driving growth within the sector."

Power continues: "If you look at the macro trends, convenience is one of the drivers behind Viennoiserie growth. These products can be seen as a meal solution to the breakfast occasion, and we know that sales do peak in the morning, resulting also in possible gains from the coffee shop market." She says that sweet Viennoi-serie is growing more rapidly than plain, as she believes these products are being purchased increasingly for all-day consumption, moving beyond just the breakfast occasion. "According to data from Kantar Worldpanel, ISB Viennoiserie is growing more rapidly than other areas of ISB sweet bakery, so clearly there is an opportunity for retailers to capitalise on this by extending ranging for example," she says.

Power agrees that there have not been any signs that the flailing economy is reducing consumers’ spend on these particular items, as they are still viewed as an affordable treat. Looking to the future, she says that a lot of the growth in this sector is coming from smaller store formats and convenience stores, and she expects this growth to continue. Café culture is also playing its part in boosting the sales in these types of store formats, she says, as convenience stores are increasingly introducing coffee machines.

"Loose items and convenience items are driving the growth," she reiterates. Bulk sales are still of the more traditional products, such as pains au chocolat, says Power, with growth more rapid within the flavoured part of the market. Fruit-filled products are also performing quite well, which could be an area of development in the future, she adds. No matter what the flavour or size, however, when it comes to sweet pastries and bakery in general, she stresses that the visual appeal of the product is always essential.