Cider is finally shaking off its negative image and - two years on after buying Bulmers - Scottish & Newcastle says it's never been more confident about the market. ADRIAN TIERNEY JONES reports
In 2003 Scottish & Newcastle took a sizeable bite of a big apple when it snapped up renowned Hereford cider makers Bulmers, home of brands such as Strongbow, Woodpecker and Scrumpy Jack. It cost the company £278m but, two years on, S&N is very pleased with its purchase, especially as cider appears to be a growth market. This is partly fuelled by the success of Magners cider, with its theatrical emphasis on pouring one of our oldest drinks into a glass filled with ice.
'I am very pleased to report that cider is in great health,' said John Dunsmore, chairman and managing director of S&N, during a visit to Bulmers' HQ in Hereford last week. He added: 'I am also pleased to announce that the integration of the Bulmers business in S&N UK has been a resounding success.'
Strongbow is a bit like Cornflakes
More than £10m has been invested in the site, which now has full packaging capabilities.
Meanwhile, volume has increased from 3m hectolitres at the end of 2003 to a projected 3.7m hectolitres for 2005. Dunsmore said this showed 23% growth in two years.
'The irony in acquiring Strongbow,' he continued, 'was that when it was on its own it wanted to be seen as a complement to lager. But now it is owned by a brewing company we seek to make it more of a cider.'
Refreshment is the marketing 'pitch' you can apply to lager and cider, but taste is the key attribute applied to Strongbow. Dunsmore added: 'We also see it as being a bit like Kellogg's Cornflakes. That is, a brand people might not have for a long time, but when they are eventually tempted they realise how good it is. It is the same with Strongbow.'
These are intoxicating times for cider and we are not talking about sharing a two-litre bottle of the stuff in the local park. The industry received a shot in the arm last year when Prince William declared a fondness for cider (although he was on the vodka and cranberry juice during a recent visit to a pub in Exmoor). There have been plenty of innovative single-varietal ciders from the likes of Thatchers and Weston's and smaller companies such as Dunkertons and Sheppy's, while attempts have been made to increase the drink's presence on the dining table along the lines of the Beautiful Beer campaign.
Then there was the rocket-like attack of Magners into the market this year, which made it cool to have a glass of cider in the hand. Other new kids on the block have included the South African cider Savannah. And suddenly cider is hip.
All this means S&N is in the right place at the right time, especially as Bulmers' most famous brand was the market-leading Strongbow, for- ever associated with a quiver of arrows hitting the mark.
It has a 46% share of the market, though in Scotland it has lost some ground to Magners.
Conversely, the volume of cider consumed has increased by 20%. S&N has spent £20m on promoting the brand, which is a reflection of Dunsmore's confidence in the drink. 'We think cider is an exciting place to be at the moment,' he said. In addition to Bulmers, S&N also owns cider companies in Finland and Belgium, and is looking to sell in the Portuguese market.
Cider was drink for the homeless
For a long time, cider has had the image as the drink of choice for gentlemen for whom the words 'no fixed abode' was coined. It hasn't been helped by premium, extra-strong ciders such as S&N's White Lightning. 'The situation with white cider is challenging,' said Dunsmore of this category.
'It is often used by couples who stay in and drink it as an alternative to wine, but over time we want to minimise the use of it as an alcoholic kickstart. We came into owning Bulmers worried about that category.
'One of the things we have done with this brand is to dispense with the 50% extra in two-litre bottles scheme. As founder members of the Portman Group, we don't want to sell it to the 'more bang for your buck crowd'. As a result of doing this we lost 50% of sales, but there is evidence that other cider manufacturers are looking at what we have done and are doing the same.'
Sirrus is sign of S&N confidence
Further signs of S&N's confidence comes with the recent launch of Sirrus, which has gone down the Magners route with its bar-top theatre of the cider being poured over ice in a branded glass.
It's a smooth drinking experience and offers scope for serving cider at the dining table. Other innovations have included the inevitable Strongbow Extra Cold with its long, tall sally of a bar font. Samples have also been handed out at the sharp end of pubs and clubs.
Meanwhile, out in the noisy world of rock festivals the Strongbow Rooms have been spreading the word. S&N's consumer marketing director Paul Bartlett said: 'The Strongbow Rooms featured at 14 music festivals this summer and we reckoned more than one million of the 18 to 24-year-olds who were there sampled the cider. Next summer, we reckon we will cover 40 days of festivals.'
Bulmers is a long way from traditional cider-making with its barns full of slumbering, maturing cider, but Dunsmore and his team reckon there is room for all sorts. It is definitely time cider went upmarket and, if Dunsmore can provide the financial and marketing muscle to do that, then all well and good.
However, a cautionary note. Leaving Bulmers for Hereford railway station I passed a bar offering such binge-drinking delights as tequila shots for 25p while Strongbow was available at 99p on certain nights.
There's still a lot of work to be done before cider totally escapes its cheap and cheerful past.
Magners plays marketing masterstroke
Magners, an Irish company, grew from a very low base and its campaign has upped sales tremendously. According to drinks marketing consultant Pete Brown: 'There are two reasons for Magners' success.
'Our generation used to drink a lot of cider when we were 15 and it was a rite-of-drinking passage. We would then stop aged 20 and move on to beer or whatever. That didn't happen with the emergence of alcopops, which the young generation began to drink. This has meant that cider has an older age profile than lager.
'However, there is a whole generation of drinkers out there who don't have that association with drinking loads of it and being sick. So when someone such as Magners comes along it works. Secondly ritual is very important in drinking and the use of the glass and the ice was a masterstroke.'