As the cost-of-living crisis continues, Nigel Huddleston looks at the benefits of big brands and mainstream flavours
The historical pattern of drink trends during times of economic struggle sees a surge in sales of cheap brands and a fall for more expensive ones.
But things in the drinks market have changed since the recessions of the early 1980s and 1990s, and even since the 2007/8 global financial crisis. Consumer expectations around quality have grown, with a greater inclination to pay more to enjoy better-tasting products.
So, as the world struggles with the Covid/Ukraine-driven slump, things feel a bit different this time round. In cider, there’s a broad consensus among leading producers that, while some consumers will inevitably just want to spend less, many will be happy to continue to shell out as before but be more determined to make sure they’re not disappointed when they do so.
Familiar brands, premium quality and traditional products seem, so far, to be the winners in all this. In its 2023 annual Cider Report, Westons noted that while consumers don’t see alcohol generally as a necessity, they do see it more as a comfort than a luxury when times are tough.
Off-trade cider market value was down 7.1% in 2022, according to the Westons report, as the return of the on-trade ate into its market share, just as it did in other categories, although there has been some correction in early 2023.
There were only two out-and-out winners among the top 10 brands featured in the report: Henry Westons Vintage growing by 6.5% to secure fourth spot and Heineken’s relaunched Inch’s more than doubling sales from a very small base to take a place at number nine.
However, despite sales falling, Thatchers Haze and Gold both outperformed the market, as did Kopparberg’s Strawberry & Lime.
Thatchers commercial director Jonathan Nixon says: “The premium brands are doing well and the value brands are doing well — and products that offer innovation and excitement.
“The ones that don’t offer value or quality are the ones that are getting lost in the middle and are in decline. That’s been exaggerated by the economic situation because consumers either want a treat, good value or something different.”
Nixon says Thatchers has attempted to balance quality — reinforced by its new Aardman Animations TV campaign — with value, through price-marked packs.
Like other segments, apple cider sales in the off-trade dropped last year, although they increased their share from 60.4% to 62.6%. “Apple cider remains the biggest part of the category,” says Nixon. “We’re seeing growth in Gold and Haze this year.
“Consumers seek brands they can trust and with proven quality in times like these. If money is tight and you want to spend, you want to know it’s good.”
The prevailing trends also play into the hands of the other major family-owned player Westons, whose focus is heavily on apple cider and traditional production methods, particularly with its Henry Westons Vintage brand.
Westons head of marketing Sally McKinnon points to growth in craft cider of 10.2% last year — the only one of the five main segments to record a positive outlook — as evidence of the importance of quality and tradition to cider drinkers in the current climate.
“We’re definitely seeing traditional cider outperform the market,” she says. “The fruit segment is pretty stale. People are getting back to good quality properly produced cider and Henry Westons Vintage is right in there.”
EDUCATING ON RANGE
Westons’ 2023 Cider Report featured range recommendations for both supermarkets and convenience stores. “That has been a big focus for us,” adds McKinnon. “We’ve been putting as much investment as we can into in-store activity in convenience and grocery.
“There has been a lot of work in educating convenience stores in particular, around helping them understand which are the leading SKUs in the category and making sure they can make the right ranging decisions.
“Consumers have a limited budget and stores have got a real role to play in making sure the range they have on shelf represents what consumers want these days.”
Further investment has been made in production capacity to keep pace with growing demand for its brands. “Given the inflation we’ve seen, we’ve all got a responsibility to make sure products that consumers are paying more for are of decent quality,” says McKinnon.
Kopparberg customer marketing manager Elise Hockridge agrees with the notion that consumers are being attracted to the polar ends of the market in value and premium. “Consumers aren’t willing to compromise on quality and still want exceptional experiences from their favourite brands despite the economic climate,” she says.
“Shoppers are already having to compromise on their on-trade experiences and that’s driving the importance of trusted premium brands.
“Consumers aren’t willing to risk their disposable incomes on products that won’t meet their taste and quality expectations for everyday treating.”
Though the Westons Cider Report showed Kopparberg brands as a whole losing just over 10% of their value sales last year, Hockridge claims a corner has been turned in early 2023, with IRI figures showing cider up 2.3% in the year to April 16, and Kopparberg back in growth at 1.8%.
“In the current economic climate, established and trusted brands are of vital importance to growth,” she says.