A bubbly sector

Despite adverse conditions, cider continues to flourish, as Nigel Huddleston found out

It says a lot for cider's market performance in the last five years that even the miserable weather of last summer wasn't enough to dampen its growth.

Nielsen figures show draught cider up 3% and packaged up 11% for the year to the end of January.

While on the face of it, the weather favoured drinks such as spirits, 2007 was actually the year when cider overtook vodka in the on-trade. The really good news is that consumers appear to be willing to pay more for a quality product too, with the increase in value sales outstripping volume growth, which stood at 10%.

Talk of an end to the cider boom was largely sparked by warnings from C&C International over worse-than-expected sales of Magners. Marketing director Maurice Breen concedes: "We were hit a bit by the weather last year and by new competitors coming into the market".

The main competition came from Bulmers Original's developing footprint in the on-trade, but other rivals think the negative impact on Magners may have been overplayed.

Merrydown managing director Chris Carr says: "There is a lot of talk about Magners suffering, because its corporate identity means it has to issue warnings, but for a brand as mature as Magners to still be showing a big year-on-year overall increase is a good performance.

"Magners has been hit in the on-trade because of the routes to market and Bulmer's ability to piggyback Strongbow and the other Scottish & Newcastle (S&N) brands.

"But consumers still have a motivation for Magners and will often just buy Bulmers as a default if they can't find it."

Barry Chevalier Guild, director of Aspall, the boutique Suffolk cider producer, says too much has been made of the Magners stories.

"Some confusion has been caused by the publicity around Magners," he says. "Any trouble it experiences is perceived to account for cider as a whole, which clearly isn't a true reflection of where we are."

Despite the strong growth of cider overall, there's still plenty of extra potential for cider producers to go for. "Only 4% of consumers drink cider every week and 50% of consumers never drink it, so there's still a tremendous opportunity for more growth," says Brothers drinks director Matthew Showering.

To achieve that, cider producers are trying to build more loyalty among those lager and wine drinkers who already switch on the odd occasion. They're endeavouring to do this with new product development and more adventurous serves.

The first quarter of 2008 alone has brought the arrival of second-generation Jacques, Magners Light and draught, Westons' and Thatchers' ice-cider fonts, and a pear cider and the County Series from Gaymer.

Those with long memories might think we've been here before with the last great wave of new cider products in the late 1980s/early 1990s, which spawned the likes of K, Diamond White and Red Rock, but ended in extra-free offers and long-term disinvestment from marketing support.

Producers are confident things will be different this time round.

Showering says: "The difference is that most of the products coming to market have genuine authenticity — because of that, cider has become more relevant to more people."

Gaymer Cider managing director John Mills concurs: "The industry has learnt some of the lessons from the past, when there was an all-out fight for share, but I don't think it's going to happen this time.

"Cider now has more positive attributes. There used to be lots of stories about it being the first drink people had but then never drank again. Now though, people are drinking it on a more regular basis."

Chevalier Guild says that last time around, producers put a lot of money into marketing and image, but probably didn't pay enough attention to what was in the bottle, so people would try it once and not come back.

"Things are different this time — and quality will out in terms of

who's left standing at the end of it

all," he adds.

S&N UK cider marketing manager Stephen Mosey believes at least part of the opportunity for growth lies in persuading those who do drink cider to choose it ahead of other drinks on more occasions. He says regular cider drinkers only touch the stuff 30% of the time, compared to 75% for regular lager drinkers.

Mosey adds: "The on-trade can learn some lessons from the off-trade retailers, who have made space available for cider. There's at least as much scope for pubs to do that, if not more, by closing down the space on a category such as RTDs, which is in decline, and giving it to the sector that is showing some growth."

Mosey suggests that cider's boom was because of a wider trend for consumers to look for products made from more natural ingredients, which may account for RTDs' decline coinciding with the cider boom.

Brothers' Showering agrees, adding: "People are looking for brands that are about substance as well as image, which is the trend that's been the success behind brands in other sectors such as Ben & Jerry's, Innocent, and Green & Black's."

Gaymer Cider's Mills argues that recent growth has been driven by new consumers coming into the market, rather than existing cider drinkers consuming more.

He says: "There are a lot more drinkers in the 18 to 24-year age group, but we're also seeing people in their 30s and 40s switching out of standard lagers. Cider has perhaps been regarded as a strong beverage in the past, but a lot of brands coming into the market are just around the 4.5% abv mark - and standard lager drinkers are starting to make cider part of their repertoire."

Wherever the growth is coming from, it keeps on coming — and cider remains a key category for pubs to get behind.

Market research - price still pays

Despite all the market innovation, a consumer survey conducted by IM Reports and Brothers Drinks exclusively for the Morning Advertiser shows that price is still a big motivating factor behind cider purchases.

Of the 86% of those surveyed who hadn't drunk cider in the previous three months, 36% said lowering the price would be the main thing producers could do to make them drink their products.

Almost a quarter would like to see more authentic ciders on the market, but only 4% were attracted by the thought of free samples. Improving the quality resonated with only 5% of those who said they drank cider occasionally.

Among those who had begun drinking cider relatively recently, a third had done so because it made a change from beer, with 58% switching from lager as their previous main tipple.

Of new cider drinkers, 18% were previously ale drinkers and 14% moved from RTDs, but only 4% from wine - one of the arenas from which many boutique cider producers are trying to pick up consumers.

The good news for the industry is that 91% of those who did drink cider said they expected still to be doing so in five years' time.