Westons Cider Report
The last year has been a challenging year for the cider industry with overall cider volumes declining, yet there are still huge opportunities for growth and development within the cider category for companies, brands and retailers who are prepared to innovate and invest in a long-term future for cider.
Consumers spend £1.8 billion on Cider & Perry in the On Trade, and it is one of the best performing categories: volume grew by +0.9% in the 52 weeks ending 23rd January 2016, and value is in growth of +2.7%. Consumers are trading up to premium ciders within the category.
The structure of the On Trade is constantly changing to meet consumer needs, and cider continues to have relevance to consumers whether in wet led pubs or eating out. Cider has also seen the emergence of a craft sector, which is on trend as consumers seek out authentic beers and ciders to complement the more mainstream brands they have in their repertoires.
Over 70 new cider lines have been recorded by CGA in the On Trade over the last two years: a good number were packaged fruit ciders and draught fruit cider also made a strong debut. Apple has seen its share of innovation too, both on tap and in bag-in-box. Outlets are ringing the changes to keep their offer fresh for consumers, in winter months as well as summer.
Cider is growing in Managed outlets (+1.4% YoY) and Free Trade (+1.5% YoY), but has declined in Leased & Tenanted outlets (-1.1% YoY).
Draught cider volume is growing by +4.1% YoY, and represents 67% of On Trade cider volume. Packaged cider is recording a decline of -5.1% YoY. This is despite the number of launches in this format.
- Apple cider is declining by -5.7% YoY but still represents 70% of cider volume.
- Fruit cider is growing by +34% YoY and now accounts for 26% of cider volume. It accounts for 60.3% of packaged cider, but growth has slowed to +7.8% YoY. It has been introduced on draught, where it accounts for 9.5% of draught cider volume.
- Pear cider remains in significant decline.
The cider category in the On Trade can be divided into four segments:
MAINSTREAM is predominantly draught brands such as Carling, Strongbow and Somersby. This segment is growing volume sales by +3.5% YoY.
PREMIUM MAINSTREAM is a mix of draught and packaged brands and is declining by 1.3% YoY.
SUPER PREMIUM is draught cider such as Mortimer’s Orchard and Aspall which enjoy a price premium. The segment is growing at +2.8% YoY, as consumers trade up within the category and the category premiumises.
TRADITIONAL/CRAFT is made by a significant number of independent and regional producers. Westons Old Rosie and Thatchers Dry are among the better known brands in this segment. It is worth £87 million a year and has potential to enhance consumer interest in cider, and to drive new drinking occasions through authenticity and variety.
The TOP 5:
DRAUGHT CIDER BRANDS account for 76% of draught cider volume and have collectively increased volume sales by +5.8% in the 52 weeks ending 23rd January 2016. These are Strongbow, Thatchers Gold, Strongbow Dark Fruit, Stowford Press and Somersby.
The next five draught cider brands account for 11.6% of draught cider, with collective growth of +7.4% YoY. These are Aspall, Magners Golden Draught, Carling British Cider, Symonds Founders’ Reserve and Westons Old Rosie. Importantly, the Top 10 leading draught cider brands offer consumers a choice across all four category segments (Mainstream, Premium Mainstream, Super Premium and Traditional/ Craft cider). There are 84,700 outlets stocking draught cider. 44% of outlets have two or more cider taps per outlet, so consumers have an increasing opportunity to choose either a mainstream cider or a trade up brand. CGA reports that the rate of sale of draught cider increases in outlets where there are more ciders on the bar. This will tend to be in larger outlets. Rate of sale is more than 70% higher with two draught ciders, and higher again with three or more.
The TOP 5 PACKAGED CIDER PRODUCTS: Kopparberg mixed fruits, Koppaberg strawberry and lime, Magners Original, Bulmers No. 17 crushed red berries and lime and Bulmers Original (apple). These account for 54.1% of packaged cider volume, and they are collectively in decline of -4.9% YoY. The most popular flavours of the fruit brands are berry flavoured. Packaged cider in the On Trade is more fragmented than draught cider, with a plethora of small brands. The average fridge stocks 4.4 cider products.
The next five packaged cider SKUs account for 17.8% share of packaged cider, and include Rekorderlig, Stella Artois Cidre, Kopparberg and Magners Pear.
The TOP 5 BRANDS IN TRADITIONAL / CRAFT CIDER account for 45.6% share of the segment’s volume and have collectively grown by +7.2% YoY. These are Old Rosie, Thatchers Dry, Rosie’s Pig, Wyld Wood and Henry Westons. As there is quite a long tail within the segment, so we believe outlets can best grow their cider sales by stocking brands which have gained some level of consumer awareness and recognition, and which add variety to their cider offer.
RECOMMENDED STOCKING SCENARIOS
It is recommended that as a minimum, outlets should consider stocking an entry point draught cider, and this will usually be a Mainstream cider, unless an outlet style dictates that this should be a Premium Mainstream or Super Premium cider. If there is a second cider tap available, outlets should consider making that tap a trade up cider brand. If there are three or more cider taps available, then a bag-in-box Traditional / Craft cider should be considered, ideally on a tap, to widen consumer choice, premiumise the offer and support those drinkers who want to try something different
If there is only one cider on the bar, it should be a Mainstream or Premium Mainstream cider.
Fridge space remains under pressure from a number of competing categories. The average sized outlet is stocking 4.4 ciders in the fridge. To be in line with the category profile outlets should consider stocking two apple, two fruit and one pear cider in their fridge. This will be sufficient to meet the needs of most packaged cider consumers, and especially in conjunction with a suitable range of draught cider.
We recommend brand blocking in the fridge, so consumers can make their choice as easily as possible. A drinks menu also helps consumers to browse their drinks order before visiting the bar, and helps to educate consumers about the ciders stocked.
A full copy of this report can be downloaded from http://www.westons-cider.co.uk/corporate/westons-cider-report/