Beer has seen the most dramatic sales decline, losing £2.2bn in revenue between 2006 and 2011 mainly due to the decline of the UK pub sector.
Declining marketResearch company Mintel says that 10 years ago 42% of Brits were cider drinkers but that has now grown to 47%, despite the UK adult drinking population falling from 88% to 82% in the past five years alone. Cider's 47% compares with 46% of Brits who are Lager drinkers today.
Cider is the undisputed success story within the alcohol category over the past six years. It has grown its volume sales by just under a quarter (24%) between 2006 and 2011 and over this period its value sales increased from £1.7bn to £2.4bn.
Cider's success is in stark contrast to wine and beer - the most adversely affected in losing actual drinkers, mainly because they are the biggest categories with more to lose. Wine has seen a decline in the proportion of UK drinkers from 66% in 2007 to 58% in 2011.
"Cider has been particularly successful at attracting younger drinkers from the ailing lager category, as well as from alcopops and wine," argues Mintel's senior drinks analyst Jonny Forsyth. He says the surprise cider surge is due to "a combination of impressive innovation and marketing nous".
With pubs seeing record closures since 2008, cider has performed well above the market by recording a 25% growth in revenue from pub sales.
Cider's tax advantage could be key – it has lower duty than other booze. It says annual above-inflation duty increases push up retail sales prices of alcoholic drinks but cider's lower duty gives it an edge. Mintel reckons sales volumes could increase by 12% between 2011 and 2016 and value sales by a third (33%).
Cider is still way behind lager in volume consumed so has a huge potential. Its revenue of £2.4bn (in 2011) is a fraction of the UK lager market's total revenues of £11.4bn. Today, a third (34%) of alcohol drinkers who do not drink cider claim that it 'never occurs to them to do so' rather than them actively disliking it.
There's room for some clever marketing, argues Mintel. "This is a result of Cider not being able to compete with lager when it comes to being a 'session drink' rather than something you have one or maybe two glasses of, due to the sweetness of its flavour," says Forsyth. It needs also to position itself as an alternative to wine with meals – but that means dryer ciders.
Cider has seen particularly steep growth in the off-trade over the past five years, experiencing a 67% increase in volume sales and doubling its revenues between 2006 and 2011. Cider's share of supermarket shelf space has soared over this time and in 2010 accounted for 40.7% of UK cider volume sales.
The report says Heineken is comfortably the dominant company in the UK cider market, owning five of the top ten brands in terms of revenue within the UK off-trade in 2011. Its major brand – Strongbow – dwarfs all other cider brands within the off-trade channel with a value share of 27.2%.
"While cider's competitors are catching up when it comes to sweeter flavoured taste innovations, cider is storming ahead in this area. The entry of Stella Artois from AB InBev to the cider category, alongside the continued success of ciders such as Magners and Strongbow add to the rich growth potential of the category. There is particularly space to grow the more premium segment," Forsyth said.
Reason for drinking cider
- 58% claim that it is more refreshing
- 49% say it has a fresher taste
- 44% prefer its sweeter taste
- 27% drink it for a change
- 21% claim it's less gassy than
- 17% say that they like that it tastes less alcoholic than lager
"While Cider is drunk mainly by men, it also has a strong appeal to women and this gives it a considerable advantage in the in-home-focused alcohol market where 'shareability' between the genders has become a key benefit. Refreshment and freshness in cider are especially popular among over-35 drinkers, whereas under-35s have been most attracted by cider's variety of sweet flavours," says Forsyth.
"This means that 18-34 year-olds tend to adopt a 'mix and match' approach to cider, drinking a combination of pear, apple and other fruit flavoured ciders (such as strawberry), while older consumers still prefer apple. Young Cider drinkers have been attracted to the sweeter-tasting non-apple ciders due to a combination of factors: they appeal to their sweeter tooth and their love of constant flavour innovation."
The Wurzels won't be truly happy until people are drinking cider all of the time.
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