The boom isn't skin deep

05 October, 2007

Cider sales have soared, but there's talk of a downturn. Christine Boggis peels back the layers to discover the truth only to find there could be more sweet success ahead

Cider sales have soared, but there's talk of a downturn. Christine Boggis peels back the layers to discover the truth only to find there could be more sweet success ahead

The press has been full of doom and gloom headlines about profit warnings, job cuts and the cider bubble going flat - but speak to cidermakers and buyers and you'll hear a different story.

From the biggest players to small niche producers, the UK cider world is buoyant, and the boom is far from rained off.

In fact, the latest Nielsen figures show cider remains the fastest-growing category in the UK off-trade. The only other drink showing similar growth rates is golden rum, which is worth less than

4 per cent of cider's value. Not only that - cider's volume growth of 20 per cent in the year to Aug 11 is comfortably outstripped by a 27 per cent value increase.

Thresher cider buyer Bill Marney says: "The category did not quite meet what was forecast over the summer due to poor weather conditions, but to still remain in positive growth compared to its performance in 2006 - which reached as high as 50-60 per cent over the summer - shows there is continued interest in cider from our customers."

Thresher is giving more space to cider in the coming months - and it is not the only chain to do so. Northern retailer Booths has nearly doubled the number of premium bottled cider lines it carries since last year, and Tesco has launched 27 extra cider lines in the past three months.

And there's plenty of new product development coming through, especially pear and fruit variants of existing brands.

So where is all the bad news about cider's prospects coming from?

C&C Group, the company which owns Magners cider, has issued several profit warnings over the summer, saying it has not hit the targets it forecast, and share prices have dropped.

"We have had a pretty challenging summer with the weather, and also I suppose a more competitive market this year than last year, with a number of different brands and variations of brands being launched into the off-trade," says marketing director Maurice Breen.

But Magners is still growing - maybe not at the 400 per cent growth rate it saw in 2006, but it has boosted its market share considerably, from 9.9 per cent by value at the end of last year to around 16 per cent this summer.

"Typically the weather would dampen cider performance, but because there has been innovation, new brands, excitement around the category and a lot of investment from ourselves and a couple of the other brands, consumers are continuing to adapt or go back to cider," Breen adds.

John Mills, managing director of Gaymer Cider Company, says: "Despite the poor summer more people are drinking cider regularly than two years ago - the penetration rate of regular cider drinkers is well over 30 per cent, as opposed to

20 per cent two years ago. A lot of people are happier to drink cider than they were a few years ago. Things are going really well."

It is not just the premium, niche and over-ice ciders seeing growth - white cider has also boosted volumes, although its value has crept up less than 1 per cent.

Most producers say they are drawing drinkers from categories such as lager, white wine and RTDs rather than other parts of the cider market, and that it is

difficult to pin down who is drinking cider these days because it is becoming so widespread. Matthew Landley, marketing manager for Brothers cider, says Brothers drinkers could be anything from 18 to 45 years old, and almost all come from ABC1 social groupings. "It challenges preconceptions about who drinks cider," he says.

"I think there are a lot of experimenters ," says Booths cider buyer David Smith. "I really don't think there is a typical person out there drinking cider."

Although cider is growing, categories such as lager have been hard-hit by the washout summer - and there are some who fear aggressive promotions and prices over Christmas in an attempt claw back volumes lost in July and August.

Breen says: "I think it's going to be a very aggressive Christmas, given that it's been a tough summer for all the major brewers. I expect it to be very aggressive and to start very early.

"I don't think there is a huge amount to gain for the market as a whole in chasing any volumes that didn't come through in the summer at the expense of creating good value within the NPD categories that are in strong growth," says Scottish & Newcastle UK marketing director Craig Clarkson.

"We should be really encouraging people to trade up to higher value products rather than encouraging them to buy more at a lower price. Creating the extra value at Christmas through NPD and premium products should be the priority."

Davin Nugent, managing director of Cider of Sweden, which distributes Kopparberg, adds: "Offering crazy price reductions and bogofs is not good for our brand or alcohol in general. Obviously we have to promote at Christmas, but maintaining premium quality and premium image is very much key for us."

Mills says: "Ultimately, the deal I've got with Tesco, Sainsbury's etc is already done. If they decide to put their hands in their pockets and get involved in another ridiculous, socially irresponsible price war then they will do it, but it is out of our hands as suppliers now - all our deals have gone in, and the price points we have agreed are not deeper than last year."

Christmas discounts may be out of their hands, but at the moment, despite the weather, cidermakers have every reason to bask in their new-found success.

Barry Chevallier-Guild, of Suffolk cidermaker Aspall's, says: "The encouraging thing is that growth has not just affected a couple of people, it is really rubbing off on the small guys and that is fantastic. The more that side of the market gets supported, the better. All the quality cidermakers are really buoyant, which is great."

Booths' Smith says: "The Magners phenomenon has woken up some of the very traditional cidermakers to what opportunities are out there, and I feel now people are starting to move on and seeing what else is out there besides Magners. If you think about it, the cider trade has been a sleeping giant. They have been making good stuff for years, but it has needed someone like Magners to stir them all up."

So cider has survived the soggy summer better than some other drinks sectors - and the wet weather has even been good news for apple farmers. Thatchers' Martin Thatcher says: "The past three or four weeks where we have seen fantastically good seasonal weather has been a real boost, both to sales and to the apple crop - it looks like we are going to have some really cracking quality apples and a really good yield as well."

Imports enter the core market

In the wake of UK cidermakers sending out messages that encourage sourcing from English apple and pear orchards and reducing carbon footprints, a raft of international ciders have hit the market, bringing colour from Sweden, Spain and even South Africa.

In fact Savanna, from South African drinks company Distell, has been in the market for some time now, and a spokesman says it "continues to go from strength to strength".

Two Swedish ciders, Kopparberg - first brought into the country through Sweden's most popular suburban export, Ikea - and Herrljunga have also joined the fray, both of them with a slightly sweeter palate to compete against mainly dry British and Irish offers.

Both brands say they are doing very well in their first years of trading.

Davin Nugent, managing director of Cider of Sweden, the company behind Kopparberg, says: "We are synonymous with Sweden and more so with the town of Kopparberg, but I don't think people are buying into a general idea that Sweden is cool and therefore they buy it."

Nugent added: "People are cleverer than that - it is down to taste, heritage and the quality of the product."

Wine company PLB launched Spanish cider El Gaitero at the London Wine Fair in May. The cider has won some on-trade wholesale distribution and marketing manager Claire Summersby is getting ready to target the off-trade.

"The product is really good because it is made with freshly picked apples," she says. "It is very typical, from northern Spain.

"They drink it especially at Christmas and on special occasions - they have cava and cider, and the people who don't like cava will have cider."

El Gaitero is in 33cl bottles, and PLB may bring in a 4x33cl pack in the future.

What's on the plate for the cider market pre-Christmas

Scottish & Newcastle UK is launching a pear version of Bulmers Original, which it says is now the third-biggest selling cider brand in the UK off-trade.

Halewood International is adding a raspberry-flavoured pear cider to its Maguire's range, and has revamped packaging across the portfolio.

Gaymer Cider Company has run a major piece of consumer research trying to find out more about the drinkers of its different brands, from Bingo Bev, who loves Diamond White, to Builder Bob, who drinks a range of draught and over-ice ciders. The research looked at what TV they watch, what magazines they read and the best forms of media to target them - and the company is now using it to plan advertising for the new year.

During Christmas there will be a promotional 8-pack of Gaymers Original bottles, and Sainsbury's is carrying a malt whisky-style gift tube of Orchard Reserve with a branded glass. The company is also mulling another burst of advertising in the run-up to Christmas.

Threshers is launching a 44cl version of its own-label cider Mahoney's on

Oct 31, and will be promoting eight cans of Dry Blackthorn or Olde English for £5, with a bogof deal on Gaymers Original 56.8cl until the end of this month.

The National Association of Cidermakers plans to promote cider with food and cider as a sustainable industry , "whether that means even more positive environmental practices in the orchards or a review of every aspect of production, distribution and logistics", says spokesman Simon Russell.

Aston Manor is running an on-pack prize offer for Frosty Jack's and plans to launch two new products - a perry and a premium cider.

Aspall's is expanding its existing project with East Anglian fruit growers that encourages organic farming by offering them higher returns for organically grown apples .

Brothers is planning a poster campaign on high-impact, back-lit sites in the first two weeks of December, backed by a consumer PR campaign.

Swedish cider Kopparberg is to launch a mixed fruit variant of its pear cider, with blackberry and raspberry. It has also launched a non-alcoholic pear cider.

Pear cider specialist St Helier is sponsoring ITV's The Championship football, and has added an apple cider and a raspberry & lime flavoured pear cider to its range.

'A drink without compromise in a world that's full of it'

Cool marketing by the big boys has given the cider market the boom it's needed, but the possibilities offered by craft cider is just the tip of the iceberg. Rod Marsh offers his view on the perils of mass production

Cider has come a long way from its humble beginnings as the drink that fuelled centuries of back-breaking harvests down on the farm, to the global phenomenon that Magners seems set to become.

Artisan producers certainly welcome the millions spent on advertising by the majors, putting the very idea of cider back so forcefully onto the drinking map, but now the dust is settling was that optimism justified? Has anything actually changed for the better?

At the production end of the craft market - where "terroir" and attention to detail are creating a product more akin to wine - the trickle down has been positive.

Sterling examples of these products have always been out there. After all, what could be more exotic, appealing or satisfying than the myriad possibilities of craft cider? There are infinite blends of lush, perfectly grown cider apples, hand-picked only when ripe and bursting with honeyed juice, stored long enough to maximise their fermentable natural sugars, milled and pressed in time-honoured fashion and then allowed a slow, steady fermentation - the process that brings everything out of the fruit to create depth, complexity and unparalleled sophistication.

The problem has always been that to experience these natural marvels at their best in the raw (on draught) you need to seek them out in the autumn, or in spring , when wild yeasts are at their most active. Sadly, too few of us can afford such a luxury, but fear not.

With the wider audience afforded by the marketing of the big boys, the once insular craft maker has become much more customer-friendly and attuned to the art of selling. Branding is appearing at the farm gate as never before. Presentation is improving by leaps and bounds. We are actually getting products with labels that tell you, in some detail, what is in the bottle. Believe me, this is a huge step.

The size and type of container, once at best an afterthought, has been refined and carefully targeted at a much wider market. Sadly, you can still buy the brew at the farm gate in 5-litre plastic cleaning fluid containers. But consumers are now blessed with a cider for every eventuality. There are carbonated, or even bottle-conditioned, ciders in crown-capped 50cl bottles aimed at pubs and clubs, and for the more adventurous drinker there are table ciders in corked 75cl bottles (both great for the off-trade).

Innovation and experimentation are bringing exciting new styles of cider to the marketplace. Dry, medium and sweet is still the best place to start when trying to gauge where a potential customer's palate might best be rewarded. But now we also have ciders made by the traditional method that give a finish every bit as exhilarating as Champagne, or ciders created by arrested fermentation that are lower alcohol, naturally sweet and effervescent .

And while fermentation, or maturation, in oak hogsheads has always been recognised as essential to the rounding out of cider, spirit casks offer another dimension - rum , whisky and bourbon ciders are all readily available.

Another plus is that generations worth of accrued knowledge is being generously shared, all in a concerted effort to eradicate, once and for all, the "paint-stripper" end of the market.

Interest and sales are undoubtedly on the increase, but there is a maggot in this juicy fruit. Growth has been substantially less than had been expected, and rather more worrying trends are beginning to appear.

Those lager or bitter converts, who have been bewitched by the blarney, are just tentatively venturing outside of their cider comfort zone, because Magners is a soft and highly dilute example of what can be achieved with apples.

The range of flavours and finishes that these converts are prepared to countenance is as yet very narrow and pretty much confined to those that have always been the beer drinker's summer treat - pale, thin, very often containing no cider apples, and usually sterile filtered, with a finish as clean as a nun's confession and about as interesting.

Cider made without the palette of chemical additives available to the industrial maker has a natural purity, honesty and integrity about it - a feat that is becoming all-too rare in the global marketplace. The result is a drink that's without compromise in a world full of it.

If we can source cider made without compromise, without water or colourant or preservative, why do we swallow the hype hook, line and ice cubes?

We would not choose to drink watered-down wine or beer or cider ourselves, so why do we so readily foist industrial cider onto our customers?

The mass market is as fickle as it is lucrative, and the big boys' product development, and follow-up marketing, has not kept pace with insatiable customer demand for the "next big thing" in cider.

Perhaps the "next big thing" has been under our noses for the last 2,000 years.

Rod Marsh runs the English Farm Cider Centre in East Sussex

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