Cider's success story is more than skin deep

03 October, 2008

Nigel Huddleston reveals the core elements behind the category's continuing take-home sales boom

Just as Sir Alex Ferguson never tires of seeing Manchester United win, so cider producers are settling into their role as the drinks industry's untouchables. The three-pronged assault of soggy weather, crunchy credit and smokeless atmosphere on pub sales have only served to accelerate the rise of cider in the take-home market.

While the on-trade's ills have caused even cider to grind to a near stand-still, off-trade sales are continuing to bring

on the good times for the category - and producers can barely conceal their


Davin Nugent, managing director of Cider of Sweden, which markets Kopparberg, says: "We're still seeing double-digit growth and the only other category which is really anywhere near that is vodka."

Nielsen figures show take-home cider sales up 21% in the year to Aug 9, to stand at £590 million, making cider bigger than ale and close on the combined sales of Champagne and all other sparkling wine.

The rapid rate of growth means cider is one of the categories that needs constantly reviewing by retailers to make sure their offering is right.

"The amount of space being given over to cider is fantastic," says Nugent.

"We're not seeing the really deep cut promotions that there have been on beer in the past but we are seeing retailers doing beer and cider festivals rather than just beer. It just serves to drive awareness and trial of cider even more."

Discounting threat

The level of promotions seems to be the biggest cause for concern in the category. In the last cider boom, producers weren't

able to contain their excitement, expanding production capability, and then ending up cutting prices and handing out extra-free because they couldn't fill the capacity.

Paul Burton, joint managing director of St Helier pear cider

supplier Intercontinental Brands, says: "The

discounting we've started to see this summer is the biggest threat to the market.

We hope it doesn't continue, but once it's

started it's hard for it to stop.

"It's included in the beer case deals and you couldn't have imagined that three or so years ago."

Gaymer managing director John Mills adds: "The multiple grocers have been leading the change and we've been benefiting from the extra space that's been given to cider. It's a reverse

from where we were against RTDs a few years ago.

"The promotions are more about multibuys and so far we're not back to the bad old days of 50% extra-free. It's more retailer led than producer-led this time."

The fastest growth is coming from premium bottled cider, up 27% in July and August, compared with the same period a year earlier.

Neil Whelpton, cider buyer at Waitrose, says: "Magners still continues to lead the way in terms of sales, but smaller brands such as Aspalls, Westons and Sheppy's have all had great years."

Chris Carr, managing director of Merrydown, says a trial with a 50cl - rather than litre - bottle in Morrisons

resulted in almost 100% incremental business for the brand, but that the fixture was becoming crowded.

Carr says: "So much success is about visibility and feature, but it's a struggle to get a feature outside of the category promotions.

"The four bottles for £5 type of offer is very good for the retailer and cider as a category, but it doesn't help you as an individual brand because you don't get the standout. You only get the same amount of visibility as everyone else."

Product innovation has been driving the market forward, with both Bulmers and Magners introducing Light variants and Magners launching its 2.3% abv Mid-Strength brand.

"Innovation is the key to the market," says Scott Fairbairn, Magners' marketing manager. "When people have seen Mid-Strength they've said they wouldn't see themselves buying it, but once they've tasted the product they've found it wasn't a sub-standard drink and they change their minds.

"We need to show people it's not a distress purchase but a legitimate choice."

Aspall has recently launched Duché De Longueville Argile Rouge, a sparkling sweet cider at 2.5% abv, but director Henry Chevallier Guild warned against NPD for its own sake.

"The major threat is the proliferation of too many me-too brands that don't add anything different to the category and


confuse the consumer," he says.

"We have seen a plethora of pear and fruit-flavoured ciders launched over the last year which generally appear to be competing with one another for shelf space.

"With too many brands without a real point of difference we could start to see increasing levels of price-led activity to drive volume rather than value adding mechanics."

After letting a great opportunity go the last time cider had such a golden age in the mid-1990s, there's understandable anxiety among cider producers not to make the same mistakes again. But for now, with

rival drinks categories in turmoil, most are determined to enjoy the moment.

Cider in figures

Share of volume drunk in the off-trade: 60%

Share of off-trade cider volume sold in impulse: 42% (against 33% for total drink)

Off-trade volume increase over past 12 months: 15%

Multiple grocers' volume increase over past 12 months: 23%

Size of private-label cider :



increase in private-label sales: 26.5%

The word

on the street

How often do you drink cider?

Do you think that fruit-flavoured ciders are a good or a bad thing?

Do you think cider will be one of your drinks of choice in five years?

Sean Aherne, 51, computer manager

"I prefer

draught cider and I like the old traditional ciders. The cloudy ones with a rougher image often have a better taste. I have a feeling that those sparkly clear ciders are full of chemicals . There is definitely a fashion around cider, like drinking Magners with ice. I don't want to add water to my cider frozen, or not.

I am sure these fashions will fade."

Paul Sacki, 50, sales director

"I like both draught and bottled cider, and I like drinking it over ice


Fruit-flavoured cider tastes like fruit juice - I got very drunk on it without intending to. It went down like water and I was thirsty. When I drink alcohol I drink more slowly, respectfully - I felt like I had been tricked. Yes, it said on the bottles that it was alcoholic but these taste like fruit juice."

Nigel Lee, 39, research officer

"I like any cider except scrumpy. I don't like that very stale, earthy bitter taste that some scrumpies have. I think cider in a glass bottle gives a better impression.

You feel you are getting better quality, but I know this may not be the case


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