The biscuit market has undergone significant transformation over the past decade, driven by shifting consumer preferences. Two major trends have emerged: a polarized market where consumers seek either health-conscious options or indulgent treats, and a rise in premiumization where quality ingredients and enhanced experiences command higher prices. Traditional, legacy brands that once dominated the market are now struggling to adapt, caught between these opposing forces. Meanwhile, newer challenger brands are thriving by focusing on health, transparency, and authenticity, offering products that genuinely cater to modern consumer demands.

Polarization and Premiumization Reshape the Biscuit Market

In recent years, the biscuit industry has witnessed a clear divide between health-focused and indulgence-driven products. On one side, health-conscious consumers are increasingly seeking snacks made with natural ingredients and functional benefits. On the other, those craving rich, decadent treats continue to drive demand for premium, indulgent options. This polarization has left traditional, middle-ground brands struggling to maintain relevance. These established players, once dominant in supermarkets, have found themselves squeezed between innovative health brands and premium indulgence offerings. Their attempts to respond to changing consumer trends have been tepid, often relying on minor tweaks rather than bold innovation.

The pandemic offered a brief reprieve as shoppers turned to familiar favorites during uncertain times. However, this resurgence was short-lived. Brands like Skinny and Fox’s have capitalized on these trends, with Skinny achieving £23 million in sales and Fox’s significantly boosting its revenue through indulgence-focused strategies. The success of these brands underscores the importance of clearly defined positioning and authentic commitment to consumer needs.

Authenticity and Transparency Win Consumer Trust

Consumers today place a high value on authenticity when it comes to healthier snack options. They prefer brands that are genuinely dedicated to wellness rather than those merely adapting to market trends. Challenger brands such as Skinny, Kallo, and Good Guys Bakehouse have built their identities around health and transparency, creating snacks that are both delicious and nutritious. These brands communicate their mission clearly and consistently, earning trust from health-conscious shoppers.

Legacy brands, on the other hand, face skepticism due to their long-standing market positions and existing product formulations. Many of these brands were developed decades ago and are restricted by their original recipes and production processes. When they attempt to introduce ‘healthier’ versions of classic products, consumers often perceive them as compromised, lacking the genuine appeal of purpose-built health snacks. This perception is further reinforced by the use of artificial additives and processed ingredients in these reformulated products.

Clean Labels and Functional Benefits Gain Traction

Newer health-focused brands have an advantage in developing less processed products with simple, recognizable ingredients. Consumers are becoming more discerning, reading labels carefully and avoiding ultra-processed ingredients. Brands that highlight whole grains, nuts, seeds, and natural sweeteners are winning over health-conscious shoppers. For instance, Nakd, Bear, and Kind have seen success with their clean-label biscuits, appealing to consumers who prioritize ingredient transparency.

Beyond just reducing the ‘bad stuff,’ today’s health-conscious consumers are looking for more of the ‘good stuff.’ There’s growing interest in functional ingredients that offer clear benefits, such as protein-packed biscuits for fitness enthusiasts or gut-friendly options supporting digestive health. Brands like Trek and The Gut Stuff are leading this trend, catering to specific health needs and preferences.

A Call for Bold Innovation in Legacy Brands

To remain relevant and attract new generations of consumers, legacy biscuit brands must embrace comprehensive innovation. Rather than making superficial changes to existing recipes, they need to rethink ingredients, functionality, and transparency. By fully committing to these principles, they can bridge the gap between health-conscious and indulgence-driven markets. Otherwise, they risk being left behind as the industry continues to evolve, driven by consumer demands for healthier, more authentic, and transparent choices.