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Cider - UK - December 2010

The cider market has been one of the real success stories of the alcohol market over the past five years, helped by clever innovation which has constantly updated its appeal to its core 18-34-year-old consumer base. However, looking forward, 2011 and beyond threatens to be even tougher for the industry, with duty and VAT forcing a sharp rise in its retail selling prices (RSP) as well as those of its competition. To continue its present rate of growth, cider must persuade drinkers to prioritise it more rather than just seeing it as an alternative to what they usually drink. The category also needs to do more to sell itself to non-cider drinkers, many of whom are willing to try it, but find that it rarely falls on their radar.

  • Innovation and greater segmentation will continue to drive the cider market, with new customer groups already emerging such as the 2.3 million, primarily younger (18-24 year-olds), female drinkers who drink the new pear/other fruit ciders but not traditional apple cider.
  • Smaller volume serves are key if the cider market is to attract more women, as almost half (47%) of non-cider drinking females prefer not to drink bottles or pints.
  • By promoting cider as a compliment to British roasts, or encouraging Spanish-style drinking of cider in “shots” among friends, the market can attract more non-drinkers into the category. Currently, three in five people in the UK do not drink cider, and it never occurs to the majority (66%) of them to do so.
  • The introduction of an ‘extra cold’ draught format,as is currently being trialled through Magners Golden draught, can become an important tool to tempt young male drinkers to drink cider rather than beer or lager. Currently, 67% of male non-cider drinkers prefer beer if they are having a pint yet Mintel’s Lager report – UK, November 2009 found that the extra cold draught serve was the biggest attraction among young beer drinkers.
  • While twice as many cider drinkers now see it as a year-round rather than as a summer-only drink, there are still 4.4 million drinkers who only drink cider in warm weather, and mulled cider brands can challenge this perception and associate cider with the festive period.
  • Cider has rich potential to further grow its user base, with 10.4 million UK adults prepared to consider drinking it in the future. These ‘potentials’ were most likely to drink other British/Irish products such as whisky and ale/stout, suggesting that they are particularly receptive to communication emphasising local provenance.

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Table of contents

  1. Issues in the Market

      • Key issue/themes
        • Definitions
          • Excluded
            • Abbreviations
            • Future Opportunities

              • Trend: Experience Is All
                • Trend: Fauxthenticity
                • Market in Brief

                  • Cider is a major success story
                    • Cider should continue to perform well despite tough conditions
                      • Its benefits are well understood among cider drinkers…
                        • …but it remains low down on consumers’ drinks repertoire
                          • Better marketing of its benefits can help maximise its potential
                          • Internal Market Environment

                            • Key points
                              • A market fuelled by innovation…
                                • Figure 1: Trends for UK volume sales of UK-produced cider, by format, 2000-08
                              • …and lower rates of duty...
                                • Figure 2: Trends for excise duty on cider compared to the other key UK alcohol categories, March 2007-March 2010
                              • …but VAT and ‘tax escalator’ will see cider prices increase greatly
                                • Premiumisation essential for the continued development of the sector
                                  • Local provenance has grown in influence
                                    • Figure 3: Trends for agreement with the statement ‘I buy goods produced in my own country whenever I can’, 2006-10
                                  • Cider is steadily shedding its summer-only image
                                    • Figure 4: Trends for rolling annual total of proportion of UK cider drinkers, Q4 2006-Q1 2010
                                • Broader Market Environment

                                  • Key points
                                    • Limited discretionary consumer spend means tough market conditions
                                      • Figure 5: Trends for consumer expenditure, at current and constant (2010) prices, 2008-15
                                    • Price will continue to push consumers to drink in home
                                      • Figure 6: Trends for indexed annual price changes in wine/cider/spirits in the on- and off-trade, 1988-2009
                                    • Double-digit growth in 25-34-year-olds
                                      • Figure 7: Total adult population trends, by age, 2005-15
                                    • Growth in AB population means premiumisation remains key
                                      • Figure 8: Forecast adult population trends, by socio-economic group, 2005-15
                                  • Competitive Context

                                    • Key points
                                      • Cider is the only drink to grow its penetration of UK adults
                                        • Figure 9: Trends for drink types consumed in the UK over the past 12 months, 2006-10
                                      • The alcohol market is becoming increasingly fragmented
                                        • Cider benefits from a taste shift to lighter, fresher drinks
                                        • Strengths and Weaknesses

                                          • Strengths
                                            • Weaknesses
                                            • Who’s Innovating?

                                              • Key points
                                                • Developing draught cider
                                                  • An influx of bottled ciders with premium cues
                                                    • Aspall looks to compete with sparkling wines…
                                                      • …while Halewood targets rosé
                                                        • Own-label starts to get in on the act
                                                          • Figure 10: Trends for proportion of new cider products to market, private brands versus own-label, 2007-10
                                                      • Market Size, Forecast and Segmentation

                                                        • Key points
                                                          • Cider market remains in rude health despite serious challenges ahead
                                                              • Figure 11: Market size and forecast for the UK total cider/perry category, in volume and value sales, at retail selling prices, 2005-15
                                                            • The market will weather the tough conditions over the next two years
                                                              • Figure 12: Forecast of the value sales for the total UK cider/perry market, 2005-15
                                                            • Value of off-trade market will outstrip on-trade by 2015
                                                              • Figure 13: Trends for cider/perry on-trade value sales compared to off-trade, 2005-15
                                                            • Off-trade volume sales of cider to grow by 42% over the next five years
                                                              • Figure 14: Market size and forecast for the UK off-trade cider/perry category, in volume and value sales, at retail selling prices, 2005-15
                                                              • Figure 15: Forecast of the value sales for the UK off-trade cider/perry market, 2005-15
                                                            • On-trade cider forecast is impressive considering that pubs will struggle
                                                              • Figure 16: Market size and forecast for the UK on-trade cider/perry category, in volume and value sales, at retail selling prices, 2005-15
                                                              • Figure 17: Forecast of the value sales for the UK on-trade cider/perry market, 2005-15
                                                            • Methodology
                                                            • Market Share

                                                              • Key points
                                                                • Strongbow consolidates its number one position
                                                                  • Figure 18: Trends for value and share of cider brands in the UK off-trade market, 2008 and 2009
                                                                • Own-label sales are increasing ahead of the market
                                                                  • Despite rise of premium cider, cheaper brands are thriving
                                                                    • Higher-ABV cider brands fall into two distinct camps
                                                                      • Figure 19: Brand map of price compared to ABV within the cider/perry market, November 2010
                                                                  • Companies and Products

                                                                    • Key points
                                                                      • Major players
                                                                        • C&C Group
                                                                          • Product range
                                                                            • Recent activity
                                                                              • Heineken
                                                                                • Product range
                                                                                  • Recent activity
                                                                                    • Other cider companies
                                                                                      • Aston Manor Brewery
                                                                                        • Product range
                                                                                          • Recent activity
                                                                                            • Halewood International
                                                                                              • Product range
                                                                                                • Recent activity
                                                                                                  • Merrydown
                                                                                                    • Product range
                                                                                                      • Recent activity
                                                                                                        • Thatchers
                                                                                                          • Product range
                                                                                                            • Recent activity
                                                                                                              • Westons
                                                                                                                • Product range
                                                                                                                  • Recent activity
                                                                                                                  • Channels to Market

                                                                                                                    • Key points
                                                                                                                      • Pubs responsible for lion’s share of cider value
                                                                                                                        • However, not all have adopted to the changes in such a dynamic market
                                                                                                                          • Major multiples have a relatively small slice of the pie
                                                                                                                            • Figure 20: Share of value cider sales in the total UK market, by on-trade and off-trade channel, 2009
                                                                                                                        • Brand Communication and Promotion

                                                                                                                          • Key points
                                                                                                                            • Cautious advertising spend despite continued sales
                                                                                                                              • Figure 21: Trends for total above-the-line advertising spend for the cider/perry category, 2006-10*
                                                                                                                            • Magners has dominated spend over the past three years
                                                                                                                              • Figure 22: Proportion of total above-the-line advertising spend for the cider/perry category, by brand, January 2007-June 2010
                                                                                                                            • Spend dominated by C&C and Heineken
                                                                                                                              • Figure 23: Proportion of total above-the-line advertising spend for the cider and perry category, by companies, January 2007-June 2010
                                                                                                                          • Consumer Usage of Cider

                                                                                                                            • Key points
                                                                                                                              • Cider goes from niche product to major category…
                                                                                                                                • Figure 24: Trends for cider consumed in the past 12 months, 2006-10
                                                                                                                                • Figure 25: Proportion of UK cider drinkers and how this ranks against other drink types, August 2010
                                                                                                                              • …but can it sustain its appeal as its core young drinkers get older?
                                                                                                                                • Cider’s status as a repertoire drink remains a weakness
                                                                                                                                  • Figure 26: Proportion of drinkers who consume cider depending on how many drink types they consume, August 2010
                                                                                                                                • Cider is attracting more wine than beer drinkers
                                                                                                                                  • Targeting the missing quarter of drinkers
                                                                                                                                      • Figure 27: Crossover of cider, wine and beer drinkers, August 2010
                                                                                                                                    • Men and women have different barriers to drinking cider
                                                                                                                                        • Figure 28: Those who drink wine and beer but not cider, and their reasons for not drinking cider, August 2010
                                                                                                                                      • Pear/fruit cider is catching on
                                                                                                                                          • Figure 29: Proportion of UK apple and pear/other fruit cider drinkers and how this ranks against other drink types, August 2010
                                                                                                                                        • Around half of cider drinkers embrace both kinds
                                                                                                                                          • Figure 30: Cider drinkers, by cider type, August 2010
                                                                                                                                        • Pear and fruit ciders are helping to attract a younger, more female crowd
                                                                                                                                            • Figure 31: Solus drinkers of apple and pear/fruit cider, indexed (100 = average), by gender, age and socio-economic group, August 2010
                                                                                                                                        • Consumer Attitudes towards Cider

                                                                                                                                          • Key points
                                                                                                                                            • Cider drinkers are very enthusiastic about its sweet and refreshing taste
                                                                                                                                              • Figure 32: Statements about cider which cider drinkers agree with, August 2010
                                                                                                                                            • Cider has the benefits to attract chilled wine drinkers
                                                                                                                                              • Too many cider drinkers view it as an alternative to their usual tipple
                                                                                                                                                  • Figure 33: Drink types consumed in the past year by those cider drinkers who consume cider when they feel like a change from their usual drink, August 2010
                                                                                                                                                • Appealing to discerning drinkers attracted by local provenance
                                                                                                                                                  • Consumers are now less likely to pigeon-hole cider as just for summer
                                                                                                                                                    • Cider is simply not on the radar for most non-drinkers…
                                                                                                                                                      • Figure 34: Reasons why people have not drunk cider in the past year, August 2010
                                                                                                                                                    • …and can sell its benefits better to the wider drinking public
                                                                                                                                                      • Cider needs to raise its food matching profile
                                                                                                                                                        • The category cannot forever rely on innovation for its growth
                                                                                                                                                          • Women put off by the volume of cider serve
                                                                                                                                                              • Figure 35: Reasons why people have not drunk cider in the past year, indexed (100 = average), by gender, August 2010
                                                                                                                                                            • When men want a pint, they are more likely to opt for lager
                                                                                                                                                            • Targeting Cider Potentials

                                                                                                                                                              • Key points
                                                                                                                                                                • Cider has potential to convert many more drinkers...
                                                                                                                                                                  • Figure 36: The proportion of Cider Potentials and Cider Rejecters among non-cider drinkers, August 2010
                                                                                                                                                                • ...but taste is the main turn-off for rejecters
                                                                                                                                                                  • Figure 37: Barriers to entry for Cider Rejecters compared to Cider Potentials, August, 2010
                                                                                                                                                                • A chance to attract more older, discerning males
                                                                                                                                                                  • Figure 38: Cider Potentials, by socio-economic group, age and gender, August 2010
                                                                                                                                                                • Cider has the potential to attract more drinkers from wine than from lager
                                                                                                                                                                  • Figure 39: Drink types which Cider Potentials and Cider Rejecters consume, August 2010
                                                                                                                                                              • Appendix – Internal Market Environment

                                                                                                                                                                  • Figure 40: Agreement with the statement ‘I buy goods produced in my own country whenever I can’, by demographics, 2010
                                                                                                                                                                  • Figure 41: Monthly % change in GfK NOP Consumer Confidence Index, January 2009-October 2010
                                                                                                                                                              • Appendix – Brand Communication

                                                                                                                                                                  • Figure 42: Advertising spend (top ten) on cider and perry, by company, 2007-10
                                                                                                                                                                  • Figure 43: Advertising spend (top ten) on cider and perry, by brand, 2007-10
                                                                                                                                                              • Appendix – Consumer Usage of Cider

                                                                                                                                                                  • Figure 44: Most popular types of alcohol drunk in the past 12 months, by demographics, August 2010
                                                                                                                                                                  • Figure 45: Next most popular types of alcohol drunk in the past 12 months, by demographics, August 2010
                                                                                                                                                                  • Figure 46: Other types of alcohol drunk in the past 12 months, by demographics, August 2010
                                                                                                                                                                  • Figure 47: Least popular types of alcohol drunk in the past 12 months, by demographics, August 2010
                                                                                                                                                                  • Figure 48: Types of alcohol drunk in the past 12 months, August 2010
                                                                                                                                                                  • Figure 49: Types of alcohol drunk in the past 12 months, by demographics, August 2010
                                                                                                                                                              • Appendix – Consumer Attitudes towards Cider

                                                                                                                                                                  • Figure 50: Agreement with the statement ‘Cider is too sweet to drink too much of it in one sitting’, by demographics, August 2010
                                                                                                                                                                  • Figure 51: Agreement with the statement ‘Cider is refreshing’, by demographics, August 2010
                                                                                                                                                                  • Figure 52: Agreement with the statement ‘I like the sweet taste of cider’, by demographics, August 2010
                                                                                                                                                                  • Figure 53: Agreement with the statement ‘I like the variety of different flavoured ciders now available’, by demographics, August 2010
                                                                                                                                                                  • Figure 54: Agreement with the statement ‘I prefer traditional cider (ie apple) rather than the variety of different flavoured ciders now available’, by demographics, August 2010
                                                                                                                                                                  • Figure 55: Agreement with the statement ‘Cider is made from fresh/natural ingredients’, by demographics, August 2010
                                                                                                                                                                  • Figure 56: Agreement with the statement ‘I drink cider when I feel like a change from my usual drink(s)’, by demographics, August 2010
                                                                                                                                                                  • Figure 57: Agreement with the statement ‘I only drink cider in warm weather’, by demographics, August 2010
                                                                                                                                                                  • Figure 58: Agreement with the statement ‘I like to drink cider all year round’, by demographics, August 2010
                                                                                                                                                                  • Figure 59: Agreement with the statement ‘I like drinking local ciders’, by demographics, August 2010
                                                                                                                                                                  • Figure 60: Agreement with the statement ‘I prefer to pay more for premium cider’, by demographics, August 2010
                                                                                                                                                                  • Figure 61: Agreement with the statement ‘It never occurs to me to drink cider’, by demographics, August 2010
                                                                                                                                                                  • Figure 62: Agreement with the statement ‘Cider is too sweet’, by demographics, August 2010
                                                                                                                                                                  • Figure 63: Agreement with the statement ‘Cider has too many calories’, by demographics, August 2010
                                                                                                                                                                  • Figure 64: Agreement with the statement ‘I am put off by the taste’, by demographics, August 2010
                                                                                                                                                                  • Figure 65: Agreement with the statement ‘If I am going to drink a pint, I would rather it be beer’, by demographics, August 2010
                                                                                                                                                                  • Figure 66: Agreement with the statement ‘There are more refreshing alternatives (eg lager, wine etc)’, by demographics, August 2010
                                                                                                                                                                  • Figure 67: Agreement with the statement ‘There are better-quality alcohol alternatives (eg lager, wine etc)’, by demographics, August 2010
                                                                                                                                                                  • Figure 68: Agreement with the statement ‘It has too many artificial ingredients’, by demographics, August 2010
                                                                                                                                                                  • Figure 69: Agreement with the statement ‘I prefer not to drink pints or bottles’, by demographics, August 2010
                                                                                                                                                                  • Figure 70: Agreement with the statement ‘I associate cider with something people only drink when they are young’, by demographics, August 2010
                                                                                                                                                                  • Figure 71: Types of alcohol drunk in the past 12 months, by agreement with the reason ‘There are more refreshing alternatives’, August 2010
                                                                                                                                                                  • Figure 72: Types of alcohol drunk in the past 12 months, by agreement with the reason ‘There are better-quality alcohol alternatives’, August 2010
                                                                                                                                                                  • Figure 73: Agreement with the statement ‘I am prepared to pay more for foods that don’t contain artificial additives’, by demographics, 2010
                                                                                                                                                              • Appendix – Targeting Cider Potentials

                                                                                                                                                                  • Figure 74: Reasons why people have not drunk cider in the past year, by demographics, August 2010
                                                                                                                                                                  • Figure 75: Reasons why people have not drunk cider in the past year, by attitudes towards future cider consumption, August 2010

                                                                                                                                                              Cider - UK - December 2010

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