Convenience retailers risk missing out on sales from this growing category if they fail to follow consumer trends in cider, points out Sonia Hook

Cider could be a fruitful category for convenience retailers this year if they pay attention to trends, say industry experts. The overall cider category has continued to flourish with a 6% growth in value for the impulse sector in the past year, according to Nielsen data (Scantrack Impulse MAT to December 25, 2010).

Palmer & Harvey marketing director Richard Hayhoe reports that cider sales for the wholesaler have been growing faster than beer and spirits. “Our independent shops have seen double-digit growth over the past year,” he notes. The company will be running a cider festival between April 25 and May 13, offering promotions on best-sellers.

Retailer’s view

“People are buying more cider throughout the year than they used to, although it’s still a drink that sells well in the summer months. 

“Budgens runs promotions quite regularly on cider and that definitely helps year-round sales. At the moment we have promotions on both Bulmers and Thatchers Katy, and both are selling really well. 

“All the ciders we offer are available chilled and we have a good range of chiller cabinets. We offer a lot of different ciders for the size of the store and people seem to want to buy it cold, ready to drink later on that day.
“We probably sell more bottled ciders than cans, but that would suit the kind of customers we have coming in here. Our customer base tends to be more mature and middle class here, so they prefer the premium brands. 

“We do sell pear and fruit ciders and they do okay, but we don’t sell a great deal of these in comparison with the standard ciders both medium and dry.” 
Nick Davey, manager, Budgens, Hassocks, West Sussex

“We are offering store owners some great deals on cider to encourage them to give it more space on shelf possibly taking some space from RTDs, which our data shows are in decline,” he says.

And Martin Thatcher, managing director of producer Thatchers Cider, confirms that cider is still very much the hero of the off-trade market. “Take-home premium sales in particular are growing year on year, alongside fruit and pear,” he points out.

But while the market continues to grow, there are challenges facing retailers, such as the large number of cider variants available to them, explains Amanda Grabham, Merrydown Cider head of brand marketing.

“During 2010, 40 new ciders were launched in glass bottles in the impulse channel, which can be overwhelming,” she says. “On store visits we do still see a fair number of independent retailers giving too much focus to white ciders, which isn’t delivering the greatest return from their shelf space.”

There has to be a balance, she explains. “Most of the ciders flooding onto the market are aimed at 18- to 30-year olds, and this masks the fact that more than two-thirds (68%) of cider is actually consumed by the over-35 age group, for whom heritage and niche brands have a strong appeal.”

Meanwhile, ICB managing director John Mills explains that although the future for cider is very strong, it is important that the impulse channel increases its range of 500ml glass bottled ciders, such as those offered by St Helier, Kopparberg and Jacques, because these will bring greater profits.

“The impulse channel is selling proportionately more amber and white 2ltr cider because it has not increased its range of 500ml glass offerings,” he says. “An opportunity is being missed.”

Magners GB managing director Gordon Johncox also notes that cider is still “significantly under-spaced on shelves and fixtures”. He explains that the category as a whole needs more space. “Don’t squeeze more brands into the existing space allocated already, but expand it give best-selling brands the space they deserve. Too much space is given to under-performing ales and RTDs.”

Future developments Brewer AB InBev’s announcement that it will be moving into the cider market with the launch of Stella in May this year confirms that the drinks industry believes the growth in cider will continue. 

Richard Hayhoe, marketing director at Palmer & Harvey, predicts that the Stella launch will help cider sales increase even more dramatically this summer. “The Stella launch has the potential to bring more traditional lager drinkers into the category,” he says. “The deal Palmer & Harvey has secured with Stella will give independents a really strong price and a chance to compete with larger and more competitive retailers on this new product.” 

The premium Stella Cidre has a 4.4% abv and comes in 568ml bottles and 440ml cans.

Consumer trends

Cider producers also stress the importance of the summer season, suggesting that retailers make the most of dates such as bank holidays, barbecue occasions and weekends.

WKD marketing director Debs Carter says that WKD Core consumers aren’t ones to keep a stock of drinks at home, but “are just the types of people who will invite friends on the spur of the moment as soon as the sun shows its face, so convenience stores with chilled stock are their saviours”.

Landmark senior trading controller Jim Brown also points out the importance of chiller cabinets. “Chilled beers and ciders will be key in the independent sector and will grow apace as it’s not something the multiples can do easily,” he explains.

It is, however, important to recognise that more people are drinking cider all year round, says Magners’ Johncox, “so convenience retailers need to ensure they are displaying a good range in store throughout the year,” he explains.

Another trend to look out for is changing consumer purchasing habits, says Heineken UK head of off-trade customer marketing, Doug Walker. “People are now prone to shop more often, but buy slightly less,” he says. “This creates a real opportunity for independents to take advantage of the top-up shop offered by smaller pack sizes. Pricemarked packs are also becoming more important.” He explains that Heineken has a range of pricemarks on brands such as Strongbow.

Meanwhile, retailers should also keep an eye on the developing sub-categories in cider. Pear and fruit flavoured ciders continue to liven up the market and, according to Johncox, are helping to bring new consumers into the category.

“There are 3.5 million consumers buying pear cider and 2.3 million buying fruit ciders (Nielsen 52 weeks ending December 2010),” he says. “Retailers should group similar products together on shelf in order to make the choice as easy as possible for consumers.”

Premium brands are also doing well, with companies such as Thatchers claiming to have recorded growth of about 700% over the past eight years.

Roger Jackson, Westons Cider’s commercial manager, also points to a consumer trade-up to premium ciders, as well as a trend towards ‘local’ products. “There has been strong demand for premium ciders,” he says. “Pear ciders are doing well, too, including premium lines. Our Premium Organic pear cider has had an impressive year.”

Retailer’s view

“Cider is really up and coming. The new Bulmers range has been doing well and flavoured cider is very popular. I would say that Magners sales have perhaps been a bit stagnant of late. 
“We’ve been able to give enough shelf space to cider because alcopop sales have declined, so we have rearranged the store accordingly. 
“Cans are popular and so are bottles it’s a different type of market for each, though. 
“Heineken remerchandised its ciders so they are now in the same fridge as their beers and this has helped sales to pick up in the past few weeks. 
“Sales have been good throughout the year and not just in the summer, although over the recent sunny weather sales have picked up by 20-25%. We have a lot of cider in chillers and people tend to want to buy cold products. 
“I think cider is probably selling faster than lager at the moment, or it certainly looks as though it will do pretty soon the way sales are going.” 
Pinda Cheema, Costcutter, Coventry

Jackson notes that the company has seen substantial growth in the past 12 months. “As a result, two of our leading brands, Henry Westons and Premium Organic, will see exciting new developments over the next few months,” he says.

And brands which claim to offer something new and different to consumers, such as Kopparberg and WKD Core, are also reporting good sales successes.

Kopparberg has spent the past two years focusing on the convenience sector for its range of ciders, and this year it will be increasing its advertising spend from £3m last year to £5m, according to MD Davin Nugent.

Other bottled cider brands have also reported strong growth. Value sales for Merrydown Cider are reported to be growing at almost 10% in impulse stores, according to the producer.

And Savanna cider is continuing to make dramatic strides in the UK, says head of European marketing Anthony Mills. This year, for the first time, the brand is investing in a sponsorship deal with ITV1’s primetime Regional Sports Report, which begins in April and runs through to the summer. 

Size is everything

Research shows that shoppers who buy cider from convenience stores are usually on their way out to a social occasion and are therefore looking for a pack size which is easily portable. 

“This is evident from our research which shows that 60% of beer and cider purchases take place on a Friday or Saturday, with 73% taking place between 4pm and 9pm,” says Heineken’s Doug Walker. 

To tap in to this, producers have been making efforts to offer retailers a range of different pack formats. 

At the end of last year, ICB launched eight-packs of its St Helier cider with printed shrinkwrap targeted at the impulse channel. The company says most wholesalers and cash & carry operators are now listing the pack. 

Meanwhile, Kopparberg will soon be offering each of its pear, mixed fruit and strawberry & lime variants in four x 330ml bottle packs. The brand will also add to its multipack offering with the introduction of a 12 x 330ml mixed fruit can pack and a six x 500ml pear cider bottle pack. 

Managing director Davin Nugent says the company has made large investments in its brewery in Kopparberg town over the past 18 months, increasing its capacity considerably. “This has led directly to these new packs,” he adds. 

Brothers Cider, meanwhile, launched a new bottle size designed to target the summer and party occasion. The 250ml stubby bottles come in eight- and 10-packs for pear, apple and strawberry variants. 

Similarly, Mills at Savanna Cider says the company is delighted with the success that the Savanna Chill Pack enjoys. The pack holds 12 x 330ml bottles in a case and has a poly-coated lining. “You just add ice to create an instant cooler box,” says Mills.

ones to watch…
In the pink 

ICB launched its Rozel Pear Cider variant in 2010 and it is proving popular with female cider fans, the company says. The drink, which is packaged in 750ml glass bottles, has a light, aromatic flavour and is described as being a perfect substitute for wine, but at only 4% abv. The company also launched St Helier pear cider with blackcurrant last year. 
tel: 01642 256154 

A rosé glow 
Thatchers has launched its Katy Rosé and Ciderberry variants into the c-sector in the past 12 months through Booker. Both have been “exceedingly well received”, it says. “Katy Rosé in particular has showed very positive growth,” says MD Martin Thatcher. The variant is made from English Katy apples and takes its characteristic blush from the colour of the apple. 
tel: 01934 822862 

Bumper crop 
Bulmers Crisp Blend is the third limited-edition variant to join the portfolio, and it aims to build on the success of Bulmers Summer Blend and Bulmers Red Apple. Crisp Blend is made with a mix of traditional cider apples with sharper tasting varieties, offering a “crisp, refreshing taste”, according to producer Heineken. The drink is packaged in 568ml bottles. 
tel: 01506 471001 

Warming to it 
Brothers says it received numerous consumer requests for a new ginger-flavoured cider and ginger as a flavour has been making a big comeback in alcoholic drinks. In response, the team created a drink with a natural ginger extract, which is described as having a distinctive, fresh aroma, a smooth palate and an after-taste of ginger heat. It was launched in March this year. 
tel: 01749 333456