Folding preserves air bubbles that have been beaten into them, which produces fluffier batter.
One perfect example I can think of is black forest cake, which doesn’t rely on any chemical leaveners. Instead, the volume of the cake entirely comes from the air beaten into the eggs, which is why it’s very important to fold it together carefully to avoid deflating it.
If you just beat it all together, you’ll get a dinky little disk instead of a fluffy cake.
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