The article is written by Ildikó Szalai, Packaged Food Analyst at Euromonitor International

Following the highly publicised sale of Cadbury, United Biscuits, Britain’s leading biscuit manufacturer, could be next in line for sale by its private equity owners, Blackstone and PAI Partners, for an estimated £2 billion, although the sale process has not yet begun. The eventual acquisition of the world’s fourth largest biscuit maker would impact both the global and the Western European biscuit competitive landscape, especially if fellow leading players such as Kraft Foods or Premier Foods emerge as possible acquirers. In recent years, both companies have been expanding in biscuits and baked goods via acquisitions and have been building up their scale of operations.

United Biscuits commanded a 2.7% value share of the global biscuit market in 2009, equating to retail value sales of US$1,720 million. Despite its wide geographic presence covering Asia-Pacific, the Middle East and Africa and Eastern Europe, about 85% of the company’s sales are generated in Western Europe, a market which is expected to achieve a weak CAGR of 1.1% over 2010-2015, accounting for less than 12% of global biscuit value expansion over the period.

Return on investment

For any potential buyer, securing a good return on investment of approximately £2 billion in the short to medium term in a category where the core geographic market is expected to grow by about £620 million over the next five years will likely be a challenge.

In United Biscuits’ core Western European biscuit market, the continuing growth in demand for healthier products and still poor economic conditions are key factors behind this generally downbeat forecast. Injecting wellbeing-led innovations in such a category as biscuits will not be without obstacles, but trends such as high-fibre biscuits and products sweetened with stevia, a natural sweetener and the latest ingredient fuelling new product developments across health and wellness reduced-sugar foods and beverages, could be exploited in order to achieve more dynamic sales growth.

Opportunities in United Biscuits’ international markets

Although currently the company generates only a small proportion of its sales in emerging markets, it has established a presence in some of the most rapidly growing regions, such as Asia-Pacific, which is forecast to post a CAGR of 3.7% over 2010-2015, generating over 40% of global market growth in absolute retail value terms. In the region, the growth of a snacking culture, underpinned by rising consumer spending power, is set to drive momentum. However, United Biscuits’ Asian operations will need to be extended from Japan, which accounts for nearly 85% of the company’s Asia-Pacific sales, into China and India, which are the growth engines of the region’s biscuit market, with forecast CAGRs of 6.3% and 5.5%, respectively, as opposed to a 0.9% CAGR for Japan over 2010-2015.

Here are some United Biscuits’ popular brands, available in the UK. Packaging was designed by London-based jkr