NEWS ANALYSIS: Rain stops play

As C&C blames wet weather for putting a dampener on sales of Magners, Fionnuala Synnott asks whether this is due to cider’s seasonality or whether the over ice era is coming to an end

Wimbledon is not the only great British tradition to have suffered from this summer’s downpours, with reports that cider is likely to underperform in the on-trade this year.

Last month, C&C, the company behind the Magners phenomenon, warned the City to expect a weak second quarter as it forecast “very poor weather in June and into July” would hit sales volumes of their star product.

Magners is widely credited with changing the face of cider from the drink of choice for the unsophisticated, sometimes underaged consumer to a trendy, sophisticated beverage.

But judging by this profit warning, cider (particularly when poured over ice) has not yet managed to shake off its summertime associations. This must be disappointing for C&C given that a significant chunk of the large marketing budget devoted to Magners has gone into promoting cider as a drink to be enjoyed all year round. (Remember those picturesque images of apple orchards in the snow?)

The seasonality of cider is confirmed by reports from the on-trade, where the over ice message has made Magners the premier long alcoholic drink. According to JD Wetherspoon, so far this year, summer sales have been less buoyant than they have been in the past two years. Stewart Blunt, analyst

at The Nielsen Company, observes: “The so-called Magners effect has given the cider market a lift with Magners me-toos coming into the marketplace, making it a trendy choice among younger people. But, when it rains, people go to the pub less.” Stephen Mosey, cider marketing manager for Scottish & Newcastle, which produces Bulmers, adds: “The weather has an impact on all LADs, whether it is lager or cider. When the sun shines we all sell more.”

However, Mosey has no concerns about cider sales slowing down, thanks to massive investment in the category over the past five years. “According to total market data, the cider market is still in phenomenal growth, with the over ice segment of the market growing exponentially. Cider is still in rude growth when compared with draft ale or lager. In fact, total market growth in May was up by 20% on last year.”

Despite the lack of sunshine and the absence of the so-called “barbeque effect”, the category also appears to be growing in the off-trade, with Tesco reporting consistently positive like-for-like sales.

Other summer drinks have not been as badly affected by the weather. While the star of the cider category appears to be suffering, Britain’s pinkification continues unabated, with rosé now accounting for 10% of all light wines sold in the UK compared with 5% in 2005.

Although traditionally associated with summertime consumption, rosé wine appears to be maintaining its growth whatever the weather. Blunt comments: “In very simplistic terms, red wine sales slow for the summer whereas white and rosé lift. This is still happening but the pink aspect has been accelerated because of the overall interest in rosé wine, both still and sparkling.”

According to Jim Clarke, finance director at JD Wetherspoon, the consumer perception of rosé is changing: “Previously, rosé was seen as a summer drink but this is not necessarily the case any more. The category has seen very good growth notwithstanding the poor weather year-on-year.”

Unlike producers in the cider category, deseasonalisation does not appear to be a priority for rosé producers. Anthony Habert, senior brand manager for Mateus at First Drinks, explains: “Deseasonalisation is a long-term goal but rosé suppliers are still keen to focus on the summer as a point of difference.”

Meanwhile, at Tesco, rosé is becoming a year-round purchase, with consistently strong sales performances whatever the season. As a result, the retailer is doubling its rosé range to over 60 wines as part of its largest ever category review.

With unseasonal weather and heavy rain contributing to a 5% drop in total UK beer sales, there is no doubt that the weather has had an impact on sales of LADs this year. But, given that the cider category is expanding and other seasonal drinks such as rosé are growing regardless of the weather, C&C’s warning says more about Magners than it does about cider.

C&C has declared Magners’ underlying volume growth of 130% “satisfactory”. Although it must be an anticlimax for the sales team that generated the 200%-plus figures recorded last year, most brands would be content with such growth. After all, it is difficult for any brand, no matter how successful, to maintain such meteoric momentum.

Following the massive boom of cider over ice, the wettest June on record could be the catalyst for a new consumer trend and an opportunity for other brands to revolutionise their category.

 © db August 2007