CIDER: Pear necessities

Although cider’s growth has slowed, the category is still way ahead of other drinks in the UK. However, brands realise that to maintain interest they need to keep innovating with new varietals, such as perry, and dispensing techniques. By Clinton Cawood

The explosive rise in cider’s popularity may have slowed, but as producers are quick to point out, the category is still doing impressively well – far better than other drinks categories in the UK. The recent flurry of development within the category only serves to confirm this.
Stephen Mosey, cider marketing manager at Scottish & Newcastle, explains: “Because of the phenomenal growth in recent years, people are starting to say that cider’s starting to plateau, but that detracts from the fact that it’s still the fastest-growing drinks sector.” He adds: “In terms of where it can go in the future, there’s still enormous potential.”

Category growth
The steep rise in sales has been nothing but beneficial to the category at large. The realisation by a number of producers that this was becoming a category with significant potential resulted in major investment, not only in terms of product, but in marketing terms as well. This in turn has fuelled further growth of the category. As Thatcher’s Martin Thatcher puts it, “Consumers have been coming into the category on the back of the advertising. Inevitably the advertising is bound to help the category. We’ve always had these great products, but haven’t shouted loudly about them.”
Gaymer Cider Company managing director John Mills confirms this. “There has been significant advertising support – nearly £25 million was spent last year at rate card,” he says, citing Nielsen Media Research figures on total cider advertising in 2007.

This growth, according to UK cider industry spokesperson Simon Russell, “is not likely to stop. Companies will continue to innovate and invest. There’s good quality for food matching, it’s appropriate to the maturing alcopop generation, and consumers have switched from other categories for the quality and provenance.” Mills agrees: “It’s become socially acceptable.”
An important factor to consider is the challenging year faced by all drinks categories in 2007, particularly in light of last year’s summer, and the introduction of the smoking ban. As Magners’ marketing manager for Great Britain, Scott Fairbairn, comments: “Clearly it was not the summer we would have liked.” Russell confirms: “Cider’s doing particularly well, but it’s clearly not immune to what’s happening in the rest of the industry.” As Thatcher puts it: “It makes life so much easier when the sun is shining.”
For Brothers Drinks’ marketing manager, Matthew Langley, the situation is simple. “It is unlikely that cider will continue to grow at the rate it has over the last three years. However, promotional activity and innovation within the cider category will ensure that cider will still enjoy sustainable growth in 2008.”

New ideas
Innovation does indeed seem to be the order of the day – the first few months of this year have seen countless new products from every major player in the trade. This has taken various forms. A number of players have just entered the draught arena, notably packaged cider market leader, Magners. Through a tie-up with Coors Brewers, the Irish cider is now available on draught, sans ice, in extra cold format. Gaymer Cider Company is making its new pear cider available on draught – the first premium perry in this format.

Thatcher’s has taken the over-ice and draught concepts to their (possibly) natural conclusion with a product called Ice Gold. The draught font, which has been on trial in various outlets for a number of months, delivers one-third frozen cider, followed by chilled cider. The frozen component rises to the top of the glass. The thinking is that this removes the need for ice, as well as avoiding dilution of the cider. Thatcher explains: “We’ve looked at a number of ways of dispensing draught, and we believe this is the best.”

Aspall has also recognised the importance of the draught market. Partner Barry Chevallier Guild comments: “We are expanding our on-trade keg distribution into classic and traditional on-trade outlets.”
Perry is an area of significant growth. For Mills, this makes perfect sense: “In the cider industry, we’ve got a big history of making perry.” Magners’ Fairbairn is unsure of the addition of countless flavours to the category, using an example from the RTD sector: “Do you really need 17 flavours of Bacardi Breezer? The category’s disjointed enough as it is. With the exception of pear, however. Pear cider’s one that, if there’s a consumer call for it, we’d consider adding to our range.”
The above-mentioned new Gaymers Pear Cider is just one of the new perry launches so far this year, but one that will undoubtedly benefit from Constellation’s significant resources. The new variant, together with its original apple cider, is the subject of a £4 million music marketing budget this year. S&N’s marketing support for its Bulmers pear variant, launched late last year, is undoubtedly a significant one as well.
Halewood’s new project, a premium Swedish cider from Herrljunga that the company has rebranded as +46, also consists of a pear variant. As Halewoods’ Richard Clark says, “What’s happened in the category since Magners? Pear. It’s almost like everyone in cider said, ‘Let’s crack apple first, then move onto pear.’”

For Halewoods’ new addition, the obvious direct competitor is Swedish cider market leader, Kopparberg (which also counts a pear cider, in both alcoholic and non-alcoholic form, in its portfolio). There are other imported competitors, however. One that is achieving growing success in the UK is South African brand Savanna.
The brand’s UK distributor, Babco, reports a year-on-year sales increase of 130%. While this may have started from a small base, the brand is now listed in a number of the major multiples, and is beginning to invest significant sums into promoting its brand, through various means. The Distell-owned brand has prioritised packaging innovation, and advertising and sponsorship campaigns over product innovation.

Flavour variants
Other brands have placed far more emphasis on new product developments in recent months, with a number of new flavours and variants currently entering the market. Guild confirms that Aspall’s cider with blackberry liqueur, Peronelle’s Blush, has “exceeded all expectations”. For Langley, “the huge development for 2008 will be flavoured ciders. Brothers enjoyed considerable success with its strawberry and mixed pear variant.” The company has since launched a lemon variant.
These flavour variants have the capacity to be controversial, and are in fact not included in the cider category in terms of duty. As Mosey says, “There is a danger that the market becomes too complex – that people may just try to capitalise on the market, in less responsible aspects. In reality, a lot of these products shouldn’t even be classified as ciders – it should only be apples and pears. With Jacques (S&N’s premium fruit offering from Belgium), we’ve been very upfront about that. It’s not targeted in the same way.”

As far as extensive flavour additions are concerned, Clark, like Fairbairn, is sceptical. “When you start getting four, five, six flavours… we’ve been there with RTDs. It suggests to the trade that maybe that’s it – that we’ve exhausted cider.” He adds: “If you are going to innovate, don’t make a new fruit flavour – make something relative and genuine, that can be backed up by solid evidence.” Thatcher agrees: “I think there’s room for more innovation, but it would be nice to see more clever innovation. Making a cider that’s a bit sweeter or drier isn’t real innovation.”

One interesting development in the category is the development of “light” variants – lower calorie ciders produced with the use of artificial sweeteners. Since last year’s launch of Magners Light, S&N’s Bulmers has since added its own light variant.
The cider category is clearly being driven by various innovations, whether in terms of draught, packaging, or new variants – something that seems to be creating far more benefit than harm. As Thatcher says: “As long as it’s done well, it keeps the interest in the category. As with all things, not all new products will be highly successful or be around long, but it creates interest. It’s great to see these new products coming in. There has been quite a lot recently, but this is the time of year for it – everyone’s gearing up for the summer.”
For Clark, it’s “about getting back to what motivates consumers to trial cider, about motivating consumers into staying in the category, and getting those who’ve lapsed back into it”.
As for over ice, the development that presumably started it all – there is no question that it remains an essential part of the category, but Fairbairn is philosophical on this point: “Over ice may come and go – we can’t own that.”
Guild adds, however: “We are seeing a huge trend for people migrating up from cider’s entry point of mainstream over-ice ciders into the premium end.”

All year-rounder
Cider has a number of assets that producers are drawing on when marketing these products, particularly at the premium end. As Langley says: “Provenance will become increasingly important as consumers demand more and more substance behind the facade of the branded proposition.” Guild agrees: “Words such as authenticity and heritage are becoming increasingly important as people look for locally sourced products that use high-quality ingredients.”

While producers are currently gearing up for the summer, and are particularly dependent on the weather, cider has achieved a place in drinkers’ repertoires throughout the year, as the most recent festive season confirmed. Mills uses this example to demonstrate the acceptance that cider has gained: “The beer deals in supermarkets at Christmas – for the first time cider was included in those,” he says, acknowledging the negative side of this, but resigned to the fact. “Retailers have got to do what they’ve got to do. We weren’t invited, however.” Guild comments on this as well: “We had an exceptionally good Christmas, despite the fact that none of our products were promoted during the festive season.”
The on-trade was particularly hit by last summer’s weather, and by the introduction of the smoking ban, and cider perhaps has a beneficial role to play in this arena. As Mosey confirms: “The on-trade is having an incredibly difficult time right now. I think cider can add occasions at the pub. Aspects like extra cold are something that you can’t get outside of a pub.” He believes that “society will be worse if the on-trade continues its decline. All brewers have a responsibility to help the on-trade”.
Langley believes that “the key for any drinks brand is to work with licensees and bar managers to ensure that we are helping them deliver a quality and profitable offering. Cider is in a position to benefit from challenges such as the smoking ban as the category has traditionally been drunk outside, and is therefore in a position to become the logical companion for smokers.”
There are undoubtedly challenges to be faced, by the trade in general, but if relentless innovation and massive marketing budgets are enough to keep a category in growth, then cider is probably going to be OK.

© db April 2008