This book is much loved by our three daughters (aged 2-4), who like the story but also all the little details in the illustrations (like all the interesting things Horace gets up to with a lump of dough, and the inventive decorations on the biscuit friends). Perhaps as important, the book is also interesting enough for adults to bear reading repeatedly (and as a reluctant veteran of, for example, Fifi & the Flowertots this is vital!), with nice little plays on language that grown-ups appreciate even if the children don't notice, eg. " 'I know,' thought the Biscuit Bear, 'I shall make some friends.' ".
We also have Egg Drop by the same author, but this one is their favourite.