An Apple A Day

Cider sales, according to Mintel, are set to reach 971m litres in 2015, up from 949m last year. Susan Young takes a look at the Scottish market, and the brands who you ought to have in your fridges, and on draught this year.

If I was to tell you that it is fruit ciders that are leading the way in Scotland in the on-trade, would you be surprised? I don’t think so. Sales figures clearly show that both packaged fruit ciders and draught fruit ciders are a hit with consumers. In fact the popularity of Strongbow Dark Fruit has meant that draught cider has reversed a declining trend, and is back in growth, albeit by only 1% in 2013/2014.

The packaged market overall in Scotland, at the moment is relatively flat, in fact it is showing a slight decline of 2% according to CGA figures. This is due in part to the fact that beer is experiencing an upturn in sales, due to the popularity of craft beer. Certainly Mintel’s Chris Wisson believes that cider has fallen behind beer when it comes to innovation and driving interest in the category.   He says, “Cider is not flattered by comparisons with NPD activity with beer with much cider innovation revolving around flavour variation.” Another issue affecting the category is the fact that older drinkers (the over 35’s) are drinking less cider, so the challenge for cider operators is how to re-engage these drinkers. While the challenge for licensees is how to ensure the brands behind the bar are selling through. Although 50% of drinkers tend to stick to only one cider, half are happy to select from a variety of different brands rather than just sticking to one. There is also a move to premium ciders and indeed craft ciders are beginning to make their mark. Says Rob Calder, Marketing Director of Kopparberg, “Licensees who put a premium authentic cider on their second cider tap are allowing people to trade up to premium ciders.”

In Scotland one of the premium craft cider brands is Thistly Cross, which is now just over five years old. Founder Peter Stuart comments, “The world of craft is all about choice, and if there is a choice of beer and beer style, then that choice should be applied to cider as well. The craft movement is really our core market place, and America has become our biggest customer. The whole craft movement there means we have been able to gain a foothold.” Research from analysts Mintel shows that 57% of UK consumers drank cider in the 12 months to October 2014, with more than two in five (44%) drinking apple, 31% pear, and 29% fruit-flavoured cider. The craft segment is considerably less developed in cider than it is in beer, but 14% of Brits still reported to have drunk a craft cider within the last year.cider_thistly cross range

The biggest packaged supplier to the on-trade is Kopparberg. Its sales in the on-trade are up 10.5%. Says Rob Calder, of Kopparberg, “Magners created the cider revolution a decade ago – at a time when there was no packaged cider to talk of. Add up all the volumes of all the packaged brands now and it probably equates to the volumes that Magners was doing at the time. But its volume and share of the market has slowly been chipped away.”

However it is not all doom and gloom when it comes to the on-trade. When it comes to packaged apple cider, Magners still dominates. Paul Condron, Marketing Director, Tennent Caledonian Breweries, told DRAM, “Scotland is a key region for Magners and the brand continues to be a strong performer despite a decline in the overall Scottish packaged cider market. Apple remains an important segment, with 37%* share of total packaged category. Magners was the number one apple packaged cider, up 14%* in the last twelve weeks.”

However the best selling packaged cider in Scotland is Kopparberg Mixed Fruit. Says Rob Calder, “Fruit is in growth and Kopparberg mixed fruit is No1 in Scotland. It may be seven years old but it is still doing well. A few years ago it was all about apple, pear and a little bit of fruit. Now the sector includes apple, pear, fruit, mulled, low calorie, alcohol free, bag and box and craft. There’s a lot happening in this category, a lot of evolution. In terms of penetration apple is constant, pear is in decline and fruit is growing rapidly. We’ve seen growth of 30% with our fruit ciders.”

One area for growth that cider is missing out on is food matching. Chris Wisson, Senior Drinks Analyst at Mintel believes that cider is missing out when it comes to food. He points out, “Much of the growth in the pub industry is being driven by catering, underlining the need for alcoholic drink categories to appeal on these occasions.” He suggests that cider hasn’t managed to capture that segment of the market despite research which shows that almost seven in 10 cider drinkers believe that “cider goes with many different foods.” It still is not the drink of choice lagging behind wine and increasingly, beer, for food-led drinking occasions. Ryan Tierney, GM of The Albyn in Aberdeen, agrees, “Although cider sales, particularly the flavoured variety, make up a generous amount of our sales, no one ever seems to order ciders to drink with food. Due to the really sweet flavours of our cider offering, I can understand why beer and wine still dominate this market.”

Rob Calder explains, “Cider still struggles to be seen as sophisticated. It requires elegant branded glassware, clear food matching suggestions and smaller serves. The category still has some way to go to develop this.”

Currently across the on and off trade Bulmers is the no 1 brand in terms of penetration, followed by Kopparberg, Magners and Strongbow. But Magners is the only brand losing penetration. Kopparberg is No 2 in terms of penetration across all adults, but is No 1 across 18-34 year olds, although not by much. Cider is one of the most competitive areas of the on-trade. Rob Calder says, “The category is more competitive than it has ever been – every couple of weeks another brand refresh, or another flavour variant coming out. We have said, in fact we coined the term, “the flavour conveyor belt.” At some point consumers are going to tire of variation and we believe that is is innovation not variation that is required.”

Recent launches include Bulmers Zesty Blood Orange (which doesn’t look unlike Irn Bru). It is, say the company, “the UK’s first blood orange flavoured cider.” It comes in a 586ml bottle at 4% ABV and, with its vibrant orange colour, certainly standMNIAGT_TheGrocer_3xBottle_FullPage_OL_AWs out. Old Mout is also launching a brand new flavour, Pomegranate & Strawberry, the fourth flavour for the brand. It joins the current Old Mout range, which includes Summer Berries, Passionfruit & Apple, and Kiwi & Lime. Says Edinburgh licensee Iain Pert, “Old Mout Kiwi and Lime is flying out everywhere. Quality flavoured cider seems to be the way forward and the Kiwi suits the guys as well, as it’s not pink! Our sales are up about 10% overall in cider.” Magners too is evolving. Says Paul Condron, “Exciting developments such as Magners with Irish Whiskey, the spirit cider combining premium apple cider with a hint of smooth Irish whiskey, and our Magners Light range, which delivers the much-loved Magners flavour with 30% fewer calories, shows that Magners continues to adapt to ever-changing consumer tastes.”
Diageo have launched Pimms Cider Cup. A cider blended with Pimm’s – with strawberry and cucumber flavours, and promoted over ice. The launch is being backed by a £1.1m advertising campaign, and it aims to take a slice of the fruit cider market.

Ryan Tierney, GM of The Albyn in Aberdeen, agrees, “Although cider sales, particularly the flavoured variety, make up a generous amount of our sales, no one ever seems to order ciders to drink with food. Due to the really sweet flavours of our cider offering, I can understand why beer and wine still dominate this market.”

Rob Calder explains, “Cider still struggles to be seen as sophisticated. It requires elegant branded glassware, clear food matching suggestions and smaller serves. The category still has some way to go to develop this.”

Currently across the on and off trade Bulmers is the no 1 brand in terms of penetration, followed by Kopparberg, Magners and Strongbow. But Magners is the only brand losing penetration. Kopparberg is No 2 in terms of penetration across all adults, but is No 1 across 18-34 year olds, although not by much. Cider is one of the most competitive areas of the on-trade. Rob Calder says, “The category is more competitive than it has ever been – every couple of weeks another brand refresh, or another flavour variant coming out. We have said, in fact we coined the term, “the flavour conveyor belt.” At some point consumers are going to tire of variation and we believe that is is innovation not variation that is required.”

Ryan Tierney comments, “Flavoured ciders seem to be a hit, primarily with female customers aged between 20 and 35. For older patrons, Magners and cloudy ciders seem to be more appealing due to their more dry, crisp taste although we have certainly seen a decline in sales of Magners. We have Magners available on both draught and in 500ml bottles and two years ago we would have sold about three kegs per week. Now we barely even sell one. The flavours have taken over.”

Amy Williams, General Manager of Inn Deep in Glasgow, told DRAM, “We currently stock Herrljunga cider in four flavours, Apple, Pear, Strawberry and Lime and Blackcurrant and Lime. These sell really well in summer but are also a slightly quirky alternative to mainstream flavoured cider brands. Although we do have Magners in stock, we have noticed a decrease in sales and customers who would have previously opted for Magners seem to now be more drawn to our draught cider, Black Rat from Moles Brewery. The customers seem to love it and it is great to be able to offer a more dry alternative to our sweet flavours range.”cider apples

With Inn Deep bar in Glasgow, being known for it’s extensive range of craft beers, we asked Amy what her opinion of craft cider was. She comments, “I don’t think that craft cider will ever become as popular as craft beer as there seems to be a difference in the type of person who buys cider. Craft beer drinkers tend to be very experimental, and like to try a variety of beers whereas cider drinkers like to go for what they know.”

However Peter Stuart of Thistly Cross is enjoying a knock-on effect from the craft movement. As a result Thistly Cross is now available in Keg, and it has been repackaged. Says Peter, “There are not that many Scottish cider makers, but we are the biggest. We can provide kegs to order and we also offer a flexible range of ciders at a good price. Also with the new allergens regulations we put the percentage of fruit in fruit ciders on the label.” This is an area which could be quite contentious in the future according to Mintel. They believe it is possible that there could be increased legislation around cider terminology in the coming years. At the moment ciders can be made with the unlimited inclusion of fermentable syrups before the fermentation process. Says Mintel, “Under law, apple ciders in the UK must contain at least 35% apple juice (fresh or from concentrate). While producers are under no obligation to declare their fruit content, previous industry research has calculated that many ciders which are not ‘traditional pure juice’ variants feature a fruit juice content of less than 50%, with the remainder made up of water-diluted fermented sugar syrup. For many larger producers, this is a necessity given their size and difficulties in producing ciders with a high fruit content on a mass-market scale.” Mintel also suggests that there is an opportunity for premium fruit brands to use provenance to appeal to consumers. Says Mintel, “Despite being under no obligation to provide details of their fruit content, cider brands with a high fruit content should be making overt claims about how much fruit juice is in their cider. This would help them to justify a premium price tag in the process, particularly as 58% of cider drinkers would be interested in seeing the juice content on cider packaging. Location- specific details on labels could help to prove brands’ ingredient credentials too.”

That’s not going to be a problem for Thistly Cross. Peter explains, “We generally speaking use Scottish apples, and the majority of our fruit is British. We have doubled the amount of Scottish apples we use every year, and although we spend a lot of money on advertising, we also offer landowners a deal where we swap apples for cider, or juice for money. That word travels very far, and is very effective.” Chris Wisson of Mintel says, “Talking about the use of specific apple/pear varieties in a similar way as beer is now doing with hops could further build premium cues by strengthening an image of quality ingredients.” He concludes, “Fruit-flavoured cider benefits from being seen as a fashionable and innovative segment of the market, two attributes which have been key in driving growth by appealing to Millennials in particular.”

Certainly fruit is going to continue to do great guns this summer. The last word goes to Ryan Tierney, who is looking forward to cider sales this summer. “We have a particularly large beer garden which seats over 200, so as you can imagine, Kopparberg Strawberry and Lime still wins hands down as far as overall sales are concerned. In the height of summer it literally runs out of the door and we sell about 10 cases a week.” Here’s hoping the rest of the trade has as much success with cider.

 

*CGA_Brand Index Data to 21/02/2015 – Total Scotland

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