Within England there are several areas where the apple is a sacred entity, and the likes of Herefordshire, Gloucestershire and Kent can lay strong claims to being its spiritual home. But when you think of rolling hills, orchards galore and people munching apples like hobbits in The Shire, it is hard to top Somerset.
And in Somerset, Thatchers reigns supreme. “We very much focus on apple cider,” says Martin Thatcher, managing director and fourth generation cidermaker at the family-run business. “We are not into fruit cider because we think we should focus on what we are good at. We don’t even do pear. We just do apple and do it really well.
“We work very hard on quality. We are run by cidermakers, not by accountants, so we focus on quality and taste more than numbers.”
On the surface the apple is having a hard time of it when it comes to cider sales. Sales are down 3.4% in volume (IRI, year to July 2016) while fruit cider is up 5.8%. But apple still accounts for 70.9% of the category – fruit is 20% and pear, which is seeing plummeting sales, accounts for 9.1% – and it is the cheaper, mainstream brands that are suffering, while the premium producers that have heritage and provenance, like Thatchers, Westons and Aspalls, are all reporting surging sales. Thatchers is up 29.9% in volume and 21.4% in value and has expanded out of its West Country heartland to become the sixth largest cider supplier to the UK retail trade, after Heineken, Aston Manor, C&C, Kopparberg and Halewood. Thatchers Gold is now the eighth bestselling SKU after Strongbow, Strongbow Dark Fruit, Frosty Jacks, Magners, Lambrini, Kopparberg Mixed Fruit and Kopparberg Strawberry & Lime.
“We don’t compete with Frosty Jacks, Lambrini or Kopparberg,” says James Kennedy, head of off-trade. “We are the third largest mainstream apple cider [excluding Frosty Jacks] and second in cans. Strongbow Original is in decline, Magners is in pretty good growth and Thatchers is in sterling growth.”
But if you stand still you get left behind and the firm certainly is not resting on its laurels, bolstering its offer this autumn in time for blushing virgin flesh season with a raft of intriguing new product development, millions of pounds’ worth of advertising and a new canning line.
And the apple remains at the heart of it. First up, Thatchers Family Reserve, an 11% abv sparkling cider selling at £9.99 for a 75cl bottle that is designed to compete with Prosecco. “We thought there are a lot of cider drinkers that have to leave the category when they have a birthday or celebration,” says cidermaker Richard Johnson. “They love to drink cider but on special occasions they had nowhere to go. They were all going to Prosecco or Champagne.” The drink, made solely from Katy apples, is sold in off-licences in the Somerset area and will be rolled out if it proves successful.
Johnson and his team have also used Katy apples to create a 42% abv apple gin called Orchard Cut that retails at £33.99 for a 70cl bottle. “If people like gin, why can’t we make gin from apples? We have used apple as the base alcohol rather than beer or wine, then you add the spice and flavouring and redistill it to create the final spirit.”
Those are niche projects worth watching, but the core of the business is Thatchers Gold, Thatchers Haze, Thatchers Vintage and Thatchers Katy.
A new duo-wing pack on Thatchers Gold cans is designed to improve shelf standout, prevent wastage and be more environmentally friendly. “It has been done in the lager industry but I haven’t seen anything like it in the cider industry,” says marketing director Yvonne Flannery. “It’s innovative, first to market, it’s to really premiumise the can format for the consumer. We are getting the packs into retailers just before Christmas. There will be a full push in the spring and it will be across the off-trade by March.”
Cans are key to Thatchers’ strategy as Martin Thatcher says “the demand for cans is growing quite considerably and we feel they are more premium than PET”. A canning line is currently being built at the producer’s home of Myrtle Farm and Thatchers adds: “In the UK canned products are a lot better now. Printing on cans over the years has improved. They look nice and premium.”
Thatchers has invested £10 million in Thatchers Gold this year and it was on air from February to August 31. “We had the best share of voice. We had the prime spot during the Six Nations rugby,” says Flannery. “A lot of others launched in June and we had the start of Easter to ourselves. We have gone outdoor. It has always been in the heartland but this year we have gone up to Lancashire and Yorkshire. We are already number one in the southwest and we are continuing to march.”
Continued sponsorship of the Glastonbury festival has also helped it move out of its heartland as 60% of the 135,000 ticket holders come from the southeast and can stock up on Thatchers cider from 90 bars at the venue.
The producer is also giving Thatchers Haze a big push in the coming months. “It’s taking the market by storm,” says Flannery. “It’s the number two cloudy cider and has recently gained a substantial amount of distribution, and distribution is only going to increase.
“We launched first [before Strongbow Cloudy] but with a different look and feel. They came into the market and spent millions of pounds on advertising, so they have started to build a cloudy category. Then we relaunched and helped build the category and invested in a multimillion-pound campaign of our own.
“Thatchers Haze is up 33%, compared to Strongbow Cloudy being up 20%. They are no longer growing as fast. There may be a time when we become the number one cloudy. Before it was not match fit in terms of packaging to go out broader but now it is. We have the taste, it’s now packaged properly and we are now making sure consumer awareness builds up.”
Thatchers Katy, a single variety cider, is celebrating its 20th birthday this year and is in in 23% volume growth. Thatchers Vintage is in 22% volume growth and is number two after Henry Westons, and the producer expects this brand to grow exponentially as distribution increases in the coming years.
Distribution is a key challenge to Thatchers, which believes that many c-store owners are failing to back the winning brands, causing the cider category to suffer, leaving it down 2.8% in volume and 2.6% in value overall. “We feel we are misrepresented in symbols and convenience,” says Kennedy. “The challenge is getting the message over to the independent retail trade. They need up to date information about the category and which brands are moving forwards and which are moving backwards. They might see the advantages of changing their ranges and back the drinks that are growing.”
Flannery adds: “There is growth to be had in the category as long as you back the right brands. Apple cider should be on the fixture but at the moment [independent convenience retailers] are backing the wrong apple ciders. Thatchers in independents is not performing as well because it is not distributed enough. Premium, quality-tasting ciders will drive better footfall to shops and in turn a better experience for their customers.”
Overall, however, this bastion of Somerset cider is full of optimism for the category going forwards. “There is a lot of exciting stuff going on, particularly in the off-trade, where we have done really well,” says Thatcher. “Some people forget about apples but it is still 70% of total sales. It’s a very big proportion. We have a very good understanding of apples and what properties each apple brings to cider. We have done lots of single varietal ciders so we understand what they all taste like. If you ignore that you will get big fluctuations in the taste.
“Consumers are not aware of apple varietals like they are grape varietals. People don’t order white wine, they order Pinot Grigio or Sauvignon Blanc.
“Consumer education is a challenge but people are seeing apple cider now as much higher quality and they are taking an interest.”