The UK biscuit production industry has been forecast to increase at a compound annual rate of 1.6% over the next five years, rising from a valuation of £4.8 billion in 2013-14, to reach a total of £5.2 billion by 2008-19.
In 2012, the biscuits category saw increased unit prices, which helped to boost value growth while volumes remained flat. However, even the volume performance is somewhat better than might have been anticipated given the economic downturn.
Products within the biscuits category are generally considered to be luxury non-essential items, but category performance may be evidence of the paradox that in recessions, consumers are often prepared to spend a little extra on smaller non-essential indulgent items while cutting down on bigger costs.
The era of health, nutrition and convenience has ushered in new consumer tastes, lifestyles and dietary concerns, forcing producers to adapt. The emphasis on healthy eating and living has adversely affected demand for the industry's products, especially for sugar-rich sweet biscuits.
Furthermore, the changing demographic composition of the average household and periods of unsustainably high input prices have caused volatility in industry revenue.
As the industry reforms its supply structure and its major markets evolve, some niche opportunities are expected to emerge. Children are big consumers of sweet biscuits, but manufacturers can appeal to more health-conscious adult consumers by including healthier ingredients such as fruits and nuts.
Aggressive marketing and promotional activity from the industry's major players is also expected to stimulate demand over the next five years. Firms will use this approach to launch new products that take health consciousness, busy lifestyles and taste into consideration.
United Biscuits (UK) Ltd continued to lead the biscuits category with a 26% value share in 2012. The company benefits from iconic brands such as McVitie's Digestive, Jacob's, Mini Cheddars and McVitie's Hob Nobs amongst others, as well as the healthier Go Ahead! brand.
For more information on the UK biscuit production market, see the latest research: UK Biscuit Production Market
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