It seems that cider has finally managed to shake off its "park bench" image. The Magners effect has pushed up the premium category, with ACNielsen figures for December 2007 showing sales up a whopping 70%. This compares with a modest 17% rise in mainstream, led by Strongbow, and 16% for value ranges.
But the big news this year is the staggering amount of new market entrants battling for shelf space. Whereas in 2006 there were just 27 products in premium, by the end of 2007 ACNielsen showed 82 competing for shelf space.
This push on new brands shows no signs of abating. Merrydown managing director Chris Carr says: "If I looked at the premium cider category today there would probably be more than 100 products. Whenever a category is in growth there's almost a lemming-like rush. People think that if you can write cider on the bottle, then it will suddenly do very well. We saw it back in 1995 in the RTD sector following the introduction of Two Dogs, and we're seeing it again in the cider market."
Manufacturers have cautiously welcomed the rush of npd in the category. Thatchers Cider managing director Martin Thatcher believes that innovation has had a positive effect across the board. He says: "The market has been through a huge amount of change over the past few years, which is positive for the people producing it and positive for the people drinking it. It is a much more premium product and the quality is improving. And there are lots of apples being planted, which is good for cider business and good for the rural economy."
According to TNS Homescan Data, npd has added £50m incremental sales to cider. But Thatcher offers a note of caution. "There has been some genuinely innovative new products and any industry should encourage as much of that as possible. What is not so good is direct copying. If people are creating inferior quality products that's bad news for the industry."
That's a sentiment shared by John Mills, Gaymer Cider Company managing director. "If we do things right in the cider industry and we don't get excited by short-term greed, cider should follow the wine model that has grown in double digits for 10 years and then slowed into single digits, but still off a higher platform. We need to work closely on giving retailers guidance. They need a selection of premium products, but they don't need 20 - they need four or five. They don't need the 'me too' products because they don't add value."
As such, some cider manufacturers have focused on provenance and premiumisation when launching new products. In April Gaymers added its County Series, which uses apples
from the cider-making counties of Somerset and Devon. Thatchers backed this trend with two new ciders in its single variety - Prince William and Dabinett.
So how should retailers decide what to stock from the wealth of products on the market? The new varieties offer a huge opportunity for convenience stores, but with shelf and chiller space at a premium, choosing what to sell can be baffling.
Scott Fairbairn, marketing manager at C&C's Magners, says focusing on the market leaders is key for space-restricted c-stores. "You need to cover as many of the key occasions as possible and working with the mainstream products is going to do that. Obviously, you need to respond to market requests, but if you get one person in a hundred asking for an obscure, flavoured cider, stocking it on the shelf will cost you money. By entering the store people have already made a decision to pay for convenience and they'll be willing to pay for the premium and trusted brands."
ACNielsen figures for impulse premium glass back this up. In the eight weeks ending March 22, 2008, Bulmers and Magners occupied seven of the top 10 spots, with Bulmers Original 568ml heading
But the new kids on the block are starting to rack up the sales. Old favourite Merrydown Vintage holds the sixth position, but at number eight and 10 are new players Kopparbergs Pear Cider and Jacques.
These aren't the only manufacturers launching flavours and varieties of cider to attract new consumers.
Pear cider led the way and now represents the lion's share of npd. Established manufacturers have been introducing a pear variety - Gaymer Cider Company launched its pear cider in March 2008, supported by a £4m music campaign, and Thatchers launched its version around the same time. There are also new entrants targeting pear's growing following. Halewood International and Herrljunga Cider have joined forces to launch an imported Swedish cider called +46, planned for launch into the off trade in September.
Although pear can be labelled a cider in its own right (pear and apple trees can sit side by side in orchards) the Food Standards Agency put it foot down with the flavoured varieties hitting the market. Cider flavoured with other fruits has to be referred to as 'flavoured'.
Brothers Cider launched lemon, strawberry and a limited edition toffee apple in autumn last year. Pear with a twist of lemon followed in May 2008. Senior marketer Phil Plowman says that the target audience of early 20s with disposable income is a good fit with the convenience channel.
Likewise, InterContinental Brands has targeted new flavours with the launch of St Helier in original pear, apple and raspberry & lime in autumn last year, followed by blueberry in January.
But is there a risk that these flavours may attract underage drinkers to the cider category?
InterContinental Brands' joint managing director Paul Burton thinks not. "We have been very conscious of the need not to lose any of the essential characteristics of cider. We believe we have created something that is very cider-like, rather than a RTD that has 5% alcohol and tastes like sugar, water and flavour. We didn't want to be accused of turning the category into a faddy one."
Others aren't so convinced. Mills from Gaymers Cider Company says: "I was worried about the flavoured ciders. First, because cider is a great British drink and it could just become an alco-pop category with all its associations with problematic, social responsibility drinking. Second, it could mean that the government would find it perfectly acceptable to impose an alco-pop duty on cider. And given that cider has a far higher cost of production compared with beer or alco-pops, it would kill the category."
But although there are concerns around attracting underage drinking, there's no disputing some of the sweeter varieties are introducing more females and younger drinkers into the category.
Carol Saunders, head of customer marketing off-trade at S&N UK, says consumers have been won over by cider's new "cool and socially acceptable image". Referring to S&N research in 2007, she says: "Cider appeals to a wide target market, especially females who represent a huge opportunity for the category, with 81% agreeing that they would enjoy a stylish and refreshing alternative to wine, but 91% finding beer too filling."
S&N has targeted females with Jacques Fruits of the Forest and Jacques Orchard Fruits, lightly sparking ciders with flavours and an abv of 5.5%.
S&N's Bulmers and Magners have been further investing in luring females into the cider market with the recent launch of low-calorie versions. Bulmer Light has 30% fewer calories than the original and Magners Light contains 93 calories per bottle.
Magners and Bulmers and the 'over ice' phenomenon still continue to drive the market and after a wobble in 2006, where C&C saw profits fall, premium cider looks to be getting back on track.
As Fairbairn from Magners says: "The wet summer last year knocked profits across industry, and not just for manufacturers but supermarkets, convenience retailers and bars. We suffered a little bit more in perception because we had such a fantastic growth during the year before and that wasn't maintained. But we came out in a better place than some of the others in the industry and certainly this year is continuing the growth."
A reported £25m marketing spend in 2008 split between S&N, C&C and Gaymer Cider Company will also help boost the market this summer.
Most manufacturers agree that one of the biggest challenges for cider is consumer perception that it is a summer drink. But this could be changing. Thatcher believes that although he sees a big peak in the summer months, cider is becoming a drink that is consumed all year round. Fairbairn admits that seasonality is still one of Magners' key challenges but that "it is slowly levelling out".
Plowman from Brothers Cider agrees: "Cider has a reputation for being seasonal and there are concerns that following a huge burst in growth it will tail off. But it is the fastest growing category in alcoholic drinks and we are now seeing consumers converting from lager and staying there."
One area that is struggling more than others is the white/strong category. ACNielsen figures show that this category suffered a 4% drop in sales in 2007, with consumers moving into other categories.
Although white cider has traditionally been a strong category in convenience stores, government concerns over cheap, high-alcohol content drinks could be denting sales.
Brands such as Aston Manor's Frosty Jack's are hoping to combat the bad press with consumer campaigns. Frosty Jack's 'You don't know Jack!' campaign is hoping to show that white cider presents no issue if sold and drunk responsibly.
White cider sales may be dropping, but some convenience retailers remain loyal regardless. Merrydown's Carr urges them to take another look at the category. He says: "It's one of the things that I feel really strongly about. If you look in a convenience store, there's far too much space allocated to white cider and plastic bottles. They really should look at having far more choice because the market has changed; in something like 30% of independents all they sell is white cider. It's frustrating."
Mills from Gaymers says the increase in space allocated to new cider products shows that retailers are catching on to the sector's popularity.
He says: "There is lots of innovation and while some of it won't last, it's buzzy, it's exciting, and you can see people perusing the feature like they do with wine. And I don't care if all these new products don't last - there'll be others replacing them and if it gets people thinking that cider is part of their repertoire then it's a good thing. That's good for growers, good
for sustainability, good for orcharding, and it's good for the industry."