Cider capitalises on success story

Westons Cider has set out an ambition to double its sales as the company released a report predicting that the UK cider market will continue outperforming other alcoholic drinks categories for the “forseeable future”.

Using combined data from retail specialists IRI and on-trade analysts CGA Strategy, Westons reported that UK cider sales are now worth £3 billion, having increased by 6.2% during the last year.

This positive performance builds on cider’s growth over the last decade, during which time the category has enjoyed a 3.86 compound annual growth rate compared to a -2.92% CAGR decline from the beer category.

With the UK’s £38bn BWS category seeing overall value growth of 0.5% but an on-trade led volume decline of -2.1%, data showed that cider is outperforming these figures.

Despite a -1.1% volume decline in the UK on-trade, cider enjoyed 3.9% value growth in this sector; while in the off-trade it has achieved 5.5% volume and 10.2% value growth during the last year.

Within this, CGA Strategy indicated that the strongest on-trade growth is coming from premium draught cider, which increased volume sales by 18.5% last year, and draught fruit cider, which represents just £6m of the market but saw 235.8% growth in 2013.

Although CGA noted cider’s reliance on declining outlets such as wet-led pubs and sports and social clubs, it nevertheless predicted that the category would enjoy a further 5% growth in the on-trade by 2018.

Meanwhile in the UK’s £14.5bn off-trade market, IRI BWS Outlets data showed that cider is growing more than twice as fast as both the lager category and total BWS sales, although at £1.1bn it remains less than half the size of the £3bn lager market.

While cider’s on-trade growth is coming from across the various retail sectors, the most significant increase is coming from the expanding convenience multiples sector, which saw 291 new stores open in 2013.

Despite the growing popularity of serves such as mulled cider, the category’s performance remains particularly dependent on the weather. The UK’s sunny weather during July 2013 saw sales leap by almost 40% compared to July 2012, when the country received 100 fewer hours of sunshine.

By contrast, cider struggles to benefit as much as lager from major sporting events. The 2010 FIFA World Cup saw lager volume sales leap by 34%, ahead of cider, which saw 30% higher sales than an “average week”.

In common with the on-trade, fruit ciders remain a particularly strong area of growth and investment, with sales more than doubling from £82m to £217m in the last two years. Nevertheless, apple cider retains the largest market share with 65.8% of the total category.

Against this promising backdrop for the cider industry, Westons Cider confirmed plans to invest more than £3.5 million across its portfolio during 2014, the company’s largest ever marketing spend. This is due to increase by a further 20% in 2015.

This spend will range from sponsorship deals such as the Cheltenham Jazz Festival, as well as sampling events, on-pack promotions, new point of sale material and a consumer marketing focus on digital media.

Looking back on a “remarkable year” for the Herefordshire-based producer, Westons’ head of marketing Ian Lewis pointed to volume and value growth of more than 20% in the last year as the company increased production by the equivalent of 11m pints.

With growth across its brand portfolio, which includes Stowford Press, Henry Westons, Wyld Wood and Old Rosie, Lewis confirmed an aim to “double the size of our business.”

An important focus for achieving this ambition is export markets, which currently account for 7.7%, or 3m litres annually, of Westons’ total sales volumes.

With its cider already available in more than 40 markets, last month the company announced plans to step up this coverage by pushing into new markets across Asia, South America, Africa and the Caribbean.

Australia, where the company owns distribution firm Westons World Brands, is the company’s largest export market, accounting for 16.9% of the Westons’ branded export business.