Britain’s sweet tooth helps firms ride the pudding wave
Among the estimated one million people that went to work on Christmas Day were scores of staff at Cake Box, the dessert specialist, as most of its 120 shops were open, explains founder Sukh Chamdal.
Alongside Pardip Dass, his cousin and co-founder, Chamdel netted a multimillion-pound payday when Cake Box floated on London’s junior market Aim last year. He says opening on Christmas Day is a case of matching supply with demand – because it seems the faff of preparing a pudding for a festive feast is “too much bother” for many people.
Cake Box is one of a growing number of dessert-focused shops and restaurants offering fresh cakes and puddings. It is a small pocket of growth amid the doom and gloom that faces Britain’s casual dining sector.
“Britain never fell out of love with cakes,” insists Chamdal, whose business sells more than 20,000 puddings – most of them with fresh cream – each week. “But the fresh cream cake fell out of the high street 20 years ago.”
The freshness factor
One cake-seller that hit the headlines for all the wrong reasons was Patisserie Valerie.
The chain, which enjoyed years of strong growth serving slices of tasty treats with coffee, came crashing down to earth 14 months ago when it became embroiled in an accounting scandal. Most of the company was saved by Causeway Capital, the Irish turnaround house. New management is in place, menus have been changed and working practices have been overhauled.
Paolo Peretti, the managing director, hopes that with its troubles in the past, Patisserie Valerie can now ride the pudding wave. “Cakes are a treat and a sugar hit that put smiles on people’s faces,” he says. “Catching up with friends over a slice of cake and a cup of tea in ingrained in the UK mentality. Our cakes are now better than ever, using quality ingredients, which has improved the taste immeasurably.”
One problem is that cakes, especially those that are cream-based, have a short shelf life. Secret documents, seen by The Daily Telegraph, revealed that Patisserie Valerie was throwing out a fifth of its food shortly before it failed.
“We have worked closely with managers and the wider teams to ensure we are producing cakes that sell out each day in order to limit wastage – we have worked hard to find out which cakes are our most popular sellers to ensure there is a balance with customers being able to get their cakes and limiting those that aren’t sold,” says Peretti. “This was a big thing we wanted to streamline and we are working successfully to reduce wastage and ensure ultimate freshness in our whole range.”
Chamdal says that wastage has never been a problem for Cake Box. Because it uses fresh cream, he claims there is a closer relationship between customer orders and cakes made.
Cake Box operates in the “celebration market” where the cost varies from £18.99 to £250 – in other words, a large outlay compared with the likes of Patisserie Valerie, where the average spend is about £10. It is a lumpier market, but one that allows each Cake Box store to limit the amount of food it wastes.
‘Permissible indulgence’
How is it that desserts are increasingly popular against a backdrop of healthier living?
Richard Caines, of the consultancy Mintel, says: “If I was to sum up desserts in two words: ‘permissible indulgence’. The percentage who eat desserts once a week is quite low.”
Mintel has compiled figures that reveal that while the volume of sales is in decline, the value of spend is holding up. This indicates a preference for more upmarket cakes and, says Caines, a trend for people to prefer a healthier version of their favourite treat.
Another dessert specialist that is growing at pace is Creams. Its sales surged by more than third to £40.1m in the year to March after opening 21 stores, taking its total to 80.
Adam Mani, the co-founder, says reduced calorie pudding options are growing in popularity. “Vegan [options] have been very successful. We are responding to people’s requirements.”
Nevertheless, Caines’ research suggests this is still not the primary concern for consumers. Some 59pc of people agree that taste is more important than the healthiness of the dessert, he says.
Creams is benefiting from another trend – an increasing propensity for younger people to snub the pub. Mani says Creams’ stores “just feel a bit more safer” for millennials who are less likely to embark on pub crawls.
Creams opens stores with a catchment area of roughly 40,000 people and with a heavy student influence. Outlets have “the good bits of the atmosphere” of a pub, Mani says, providing a place for people to meet and socialise with a pudding instead of a pint. “For people who don’t drink it [going somewhere like Creams] is probably going to have more appeal,” Caines says.
While Britain’s passion for pud is unabated, he says that, as on the rest of the high street, there remains “a big emphasis on the run-up to Christmas”.
Peretti adds: “Christmas is one of the most important times for retail. The fourth quarter is known as the golden quarter and is ultimately when the most revenue is taken during the year. With our celebration cakes and Christmas cakes, they make fantastic gifts and our shops are perfectly positioned for shoppers to enjoy a restorative cup of tea and patisserie during their Christmas shopping.”
This suggests we will have to wait until the new year to get the complete picture, but however Christmas turns out, Caines says it will be take a lot for the public’s sweet tooth to dissolve.
“About two thirds of people think it’s OK to have unhealthy treats as part of a balanced diet,” he says. “But it’s quite difficult in a category like that to actually make it healthy.”