Home Baking Category report 2022 (The Grocer): Can the home baking market rise again?

 The lockdown baking craze is over. Can brands revive flagging sales with new healthy, affordable and convenient propositions?

Across the UK, cake tins are gathering dust, electric whisks are unplugged and mixing bowls are languishing in kitchen cupboards. In short, the home baking boom is over. Category value has fallen 15% to £747.1m as Brits have returned to the outside world [Kantar 52 w/e 12 June 2022].

“Over the last two years, we have seen the category growing as [shoppers] had more time to bake given the lockdown restrictions,” says Kantar analyst Suela Uklala. “However, as social restrictions have been lifted, people have returned to their usual busy lives, engaging less with home baking.” Simply put, the category’s seen “fewer shoppers, making fewer trips and buying less volume”.

Nevertheless, suppliers are largely phlegmatic about the sales slump. “As many of us return to some form of our pre-Covid lifestyles, it’s inevitable that the lockdown baking boom is experiencing a natural decline,” says Allan Burns, sales and marketing director at Carr’s Flour. Dr Oetker head of marketing for baking Jen Brown points out “compared to 2019, sales remain up 4.4%”.

“As social restrictions have been lifted, people are engaging less with home baking”

So, what next for home baking? Can its sales rise again? And to what degree will busier lives, the cost of living crisis and health trends shape the category’s future performance?

While the time Brits have to spend baking has significantly reduced, they’re still keen to channel their inner Mary Berry whenever they can, suggests Christine Hayes, group editor-in-chief at IM Food, which publishes the likes of BBC Good Food, Easy Cook, Olive and Delicious.

The interest in lockdown favourite banana bread, for instance, “shows no sign of going away” she says, noting it’s remained in the top five recipes on BBC Good Food for the past year.

Banana bread’s enduring popularity makes sense given its simplicity. It taps demand for quick and easy bakes, which are growing in popularity with younger shoppers.

Maddie Grinham, brand manager at Mr Organic, says this is partly down to social media. “Platforms such as TikTok are the perfect breeding ground for quick baking recipes,” she says. These fuss-free fixes help “combat consumers’ busier lifestyles and allow for a simple, and highly shareable, option”.

That desire for simplicity has also led to “a drive of popularity for home baking mixes” adds Helen Touchais, brand director for home baking at Premier Foods. “A foolproof, easy-to-use mix is an appealing solution to those that are either short on time or still gaining confidence when baking at home, but still want tasty results.”

There were 109.8 million baking mix occasions last year, she adds, citing Kantar data [52 w/e 22 June 2022].

• Grocery’s home baking market is down 26.3% in value, according to NielsenIQ’s read of the market. That’s a £75.1m loss. Meanwhile, volume sales have slumped 23.3% – the equivalent of 43.6 million units.
• The top 10 brands are all in value decline – and nine are by double-digit percentages. Silver Spoon, the leader in sugar, and its rival Tate & Lyle, have each shed £8.9m – the largest absolute loss among the top 10 brands.
• The category is “lapping unprecedented growth seen during Covid lockdowns” notes Hannah Lyford, NielsenIQ customer success consultant lead. The easing of restrictions has led to broader choices of activities beyond home baking, she adds.
• In the year ahead, “the key sales challenge for home baking brands will be to continue to encourage households to bake, whether that be through offering convenient solutions for busy lifestyles or ensuring campaigns are linked to events such as The Great British Bake Off”, Lyford says.
• But rising prices risk repelling cash-strapped shoppers. “Flour price per kg is up 5% in the latest 12 weeks,” she adds. This is expected to increase further amid factors such as the war in Ukraine.

Foolproof mixes

Brands have been quick to cash in with convenient new products. For example, Carr’s Flour added its first mixes last October: a premium lineup including Heavenly Victoria Sponge and Decadent Chocolate Cake.

Then there’s Baked In’s recently added Cookie Mixes in a bottle. Triple Chocolate, Milk Chocolate and Oatmeal & Raisin flavours require users to simply mix the contents with butter and one egg.

These join established offers such as the Bottled Baking Company’s mixes and the Mr Kipling Cake Mix from Premier. Not only are they easy to use, but they also tap the trend for home-baked sweet goods.

Brown at Dr Oetker points to Kantar data showing “total sweet baking occasions doing particularly well” compared with 2019. She expects this to continue in the year ahead as Brits seek “new ways to create homemade treats to lift their spirits during a difficult time”. That, of course, is the cost of living crisis, driven in part by escalating energy costs.

Source: Getty

“A foolproof, easy-to-use mix is an appealing solution to those short on time or still learning”

Suppliers are confident higher gas and electricity bills won’t prevent Brits from using their ovens. “Despite an increase in energy costs, baking at home will offer consumers a way to treat themselves in a more affordable way than eating out,” insists Zoë Lunn, head of brand management at Bacofoil.

Nooj founder Caroline Barton also points to home baking as “a low-cost, pleasurable activity”. And Tim Albert, marketing director at The Silver Spoon Company, predicts a surge for baking at home similar to the one seen during lockdowns.

“As rises in the cost of living impact consumers, we expect to see an increase in baking as people look for affordable and accessible activities they can undertake with family,” he says. “During the last recession, we saw a 5.8% uplift in occasions where homemade cakes were eaten.”

Healthy eating

That’s probably not what health tsars want to hear. And there is a risk affordable home baking options compound the problem of consumers putting pennies before their health.

Kim Matthews, commercial director at Trex owner Princes Food, notes that “32% of people have said saving money on food bills has led to them eating less healthily”. However, 53% are “actively needing to look for ideas on how to keep eating well on an ever-tightening budget”, she says.

“In the last recession, we saw a 5.8% uplift in eating occasions for homemade cakes”

Herein lies an opportunity for home baking brands to push more virtuous lines – or at least, lines that provide more permissible indulgence. Doughlicious, for example, packs its gluten-free, ready-made dough in portions of 160kcals or less, which “really helps people to enjoy a treat in moderation” founder Kathryn Bricken says.

At Sharpham Park, the emphasis is on the spelt in its flour being “high in protein and vitamins” says founder Roger Saul. “We stone mill it traditionally to lock in micronutrients.”

Premier Foods, meanwhile, is set to roll out flours made with wholegrain under its Hovis and McDougalls brands. “Health is expected to continue to be a key driver of growth within baking across the next few years,” explains Touchais.

The Sharpham and Premier lines tap the trend for speciality flours, which grew 27.1% over the past two years, according to Clare Marriage, founder of Doves Farm. “These flours are known to not only offer additional nutritional benefits, such as being high in fibre or a source of protein, but also deliver on taste and texture,” she says.

For the sweet-toothed, there’s the innovative Truvia for Baking sugar substitute range. Launched last September, plant-based trio Caster, Brown and Icing were “developed specifically for all types of baking occasions, ensuring a formulation that sweetens, bakes and looks like its sugar counterpart” says senior brand manager Jade Damarell. That means “any consumer can have their cake and eat it”.

In that case, maybe it’s time to dust the cobwebs off those cake tins.