Does cider need saving?

Growth in the cider category has been driven by new product development – particularly in fruit – but that hasn’t spread across all segments, leaving premium on-trade sales in a slight funk.

Heineken brand director for cider Emma Sherwood-Smith, who recently spoke at The Morning Advertiser’s (MA’s) Future Trends: Beer and Cider event about premiumisation and the category in general, has spotted this dip and is ready to reveal a few of the alcohol giant’s secret weapons to combat this.

Before we let the big ideas out of the bag, though, it’s important to understand how much the producers value the premium cider segment, which, in the 12 months to 11 June 2016, saw a 2.5% decline in on-trade volume sales, according to CGA Strategy.

Westons’ commercial director Geoff Bradman acknowledges premium has been going on for years and says the segment was where there was growth some years ago. He adds: “Premiumisation has been going on for some time and it doesn’t appear to be slowing down.” He continues: “The market is premiumising and cider is a big part of that, you can see it happening across the category.”

For Martin Thatcher, managing director of Somerset-based Thatchers Cider and the current chairman of the National Association of Cider Makers (NACM), the industry has used its premium offer to successfully gain more listings in pubs. “The great thing about cider is there’s such a variety.

“There are times when a pub has absolutely no taps on, but we (the NACM) are encouraging the pubs to take advantage of this variety and to maybe stock some of the more premium ciders, because it’s so different from what’s already out there.”

Craft cider also plays well in this segment, has a lot to offer and gives people a very different perspective of the category. “And people rotate these craft ciders like they do with beer and it’s a great opportunity for the industry to showcase these ciders and I’m quite optimistic about it,” adds Thatcher.

Rob Salvesen, customer marketing manager at Kopparberg, echoes Thatcher’s comments, highlighting that apple and pear cider producers have begun to look at craft and premium to slow the decline of sales in the two segments.

He says: “New craft and heritage offerings are doing a great job in communicating a premium positioning to consumers through visual cues and are offering operators a point of difference and a talking point through heritage and provenance at the point of purchase.”

As a result, he adds, mainstream brands are starting to see de-listings, while heritage and craft brands have risen. “I believe this will continue and it will be the producers that can deliver great-tasting premium products with true heritage and provenance that will be the winners, both within the fruit cider categories and the wider segment.”

Why don’t the figures add up?

But, if the category is so important and so highly thought of in the cider sector, why don’t the figures add up?

Well, it’s hard to know for sure why this is. The important thing is that action is being taken and in the form of new product development and innovation, which is proven to drive consumers into the category. For Sherwood-Smith, this is being led by two key new products from Heineken. The first is Blind Pig, which infuses spirits with cider and had an experimental soft launch into 500 pubs a few months ago.

“Over the past 10 years we’ve seen innovation grow year-on-year,” she explains. “The growth has been driven by new product development.

“What’s next for us is thinking about how we bring new people into the category on different occasions and how to get them to spend more by premiumising our offer a bit more. The issue for us, though, is that it’s so ingrained in people’s minds that cider is a long drink that’s only drank in the warm summer weather.”

That’s why the company launched Blind Pig in 355ml bottles with a 5.5% ABV. It is a smaller product so people don’t have to sit drinking it for a long time, it can be drank later in the day, so will carry customers through from daytime cider drinking into the evening, she adds.

“The name stems from back in speakeasy times in America, when these sites were called blind pigs. A lot of the branding and the fact the ciders are infused with spirits, is all inspired by that,” says Sherwood-Smith. “We’re launching this campaign about us breaking all of the rules, like the speakeasies did in America.”

Blind Pig currently comes in three different flavours, Rum and Poached Pear; Whiskey, Honey and Apple; and Bourbon and Blueberry. While they were launched in select pubs last year, the liquid has since changed following feedback from licensees and consumers alike, she adds. The brand is set to have a full launch later this month and will have a recommended retail price of up to £5 per bottle.

Another product in Sherwood-Smith’s armoury is Cidrerie Stassen, which is made by the Stassen family in Belgium, who have been producing cider since 1895. The product is aimed at high-end pubs and bars and is being trialled in a major national bar chain – which Sherwood-Smith was unable to name.

The sparkling liquids come in Champagne-style bottles and are being sold for £20 per 750ml bottle.

“This is something completely different to what we’ve done before,” explains Sherwood-Smith. “We’re driving sharing ciders in premium outlets with this product and there are three varieties, including a Brut, Cuvée Rosé and Grand Cru.

“By moving out of the traditional cider drinking occasions, we can expand the category and further it’s growth.”

Such launches are likely to bring new drinkers into the category, much like fruit cider has been doing, according to CGA Strategy client services director Rachel Perryman.

“In an era driven by macro trends of premiumisation and flavour, fruit cider has successfully recruited younger drinkers into the category. Initially focused around packaged variants. In recent years manufacturers have embraced the opportunities provided by the fruit cider on draught, which has driven draught cider volume sales growth of +5.4% over the past 12 months.”

The challenge

However, the challenge for non-fruit categories, according to Perryman, is to capitalise on emerging consumer trends and occasions to drive a wider appeal, as Heineken is doing with its Blind Pig and Cidrerie Stassen launches.

“Growth of traditional, heritage and craft cider shows that we are seeing some signs of this starting to come through, with new styles and formats broadening the category’s consumer base with innovation in serve styles demonstrating how cider can play a role in the growing food-led occasion.”

And cider and food is certainly where it’s at, with the majority of producers looking to tap into the trend, but no more so than Thatchers. However, there’s still a lot of work to be done to get the offer right.

In a recent video interview with the MA, Thatcher said: “It’s still very new and I don’t think, as an industry or even as a company, we have done enough yet.

“But, I think, the future is definitely cider and food pairings… there are a lot of opportunities for food and cider to go together.”

While Thatcher believes one of the biggest opportunities for the sector is food pairings, Weston’s Bradman points out the threats facing the sector. “One is outside of our direct control and that’s duty,” he says. “Also the cider market is so fragmented with the fruit category and the apple and pear categories.

“The fruit guys do a great job innovating and keep it fresh, but the challenge is when the pipeline [for fruit cider innovation runs out] or if the next ‘bandwagon’ comes along, the [cider] consumer could become promiscuous and explore other categories.”

Yet Kopparberg’s Salvesen is optimistic about the future of the fruit segment. He says: “For many years innovation stood still within the apple and pear categories and as a result consumers didn’t have much choice in the drinks that they could choose from.

“When fruit cider was launched into the market in 2007, the landscape of cider changed dramatically for consumers, with a strong focus on flavour and innovation and this is what has driven growth within the category over the past several years. Apple and pear producers are now taking note of this and this is having a positive effect on the overall category.”

With this in mind, and while there are areas of decline and growth in the category, it’s apparent manufacturers are prepared to respond accordingly and develop new products when a particular segment is in need of support.

So, does the cider category need saving? Not more than any other category, really. And if it did, it’s in the hands of many producers who know the best remedy in an emergency.