Mintel reports that the cider industry, the current darling of the drinks sector, is booming. Even in the poor current economic climate the cider industry has seen steady and impressive growth which can provide the impetus for the industry to move beyond its core market.
Last year 47% of adults said that they drink cider. Mintel reports that a year on, that figure has increased to 60%, overtaking the 57% figure that said they drink spirits. While the figure for beer is at 70%, this sector is showing little growth which is not surprising for a market that has struggled to retain its base of drinkers in recent years. Larger UK drink companies are now seeking to capitalise on this continued growth in the cider industry as it gives great potential to increase revenue.
The recent increase within the cider industry have allowed many cider producers to grow rapidly and research conducted by Mintel suggests that the future prospects for this market still look just as bright. Even among cider drinkers, 23% of people state that it does not always occur to them to drink it. Hence, any strategies aimed at increasing product awareness and visibility could potentially reap huge rewards for operators.
Chris Wisson, Senior Drinks Analyst at Mintel said: “Cider continues to stand out as one of the star performers among alcoholic drinks markets. Usage has flourished in recent years as the market has improved its image, with strong growth at the premium tier. The market has also performed well on the back of its accessibility, with its accessible flavour profiles helping to attract new users such as women and 18-34 year-olds. While many drinks markets are struggling to grow in real terms and are also hampered by the government’s tax escalator, cider is one of the anomalous success stories which is also showing underlying volume growth.”
The recent economic downturn has led to slim pickings in the drinks industry with cider being one of the only success stories. It has shown significant and steady growth year-on-year. Over the last five years total sales of cider have increased by almost a third (32%) to reach £2.7 billion in 2012, up from £1.8 billion in 2007. Although volume sales have signed slower growth, they still climbed 18% in the same period between 2007 and 2012. With Mintel forecasting that in the next five years sales will reach £3.7 billion the momentum built up by this steady growth looks set to keep flourishing. This projected growth is based on both potential duty increases and continued growth in user numbers. This strong consumer demand has already led to a better range of ciders in both the on- and off- trade sales channels. Delving into the cider sector itself there are interesting growth trends related to the pear and flavoured cider markets.
Although apple ciders still reign supreme, being drunk by 47%, pear ciders have grown to become a firm favourite within the market. Buoyed by the introduction of brands such as Strongbow and Stella Cidre into the market, pear cider is now drunk by 37% of adults. Almost a quarter (24%) of adults have drank ciders of any flavour, with examples as varied as cloudberry and toffee apple.
“Pear cider is now a highly profitable segment of the market and one which producers should almost be prioritising on a par with apple cider. While apple continues to drive most of the sales, pear can also be an effective gateway into the market, with a particular appeal to female drinkers. However, pear is still underperforming in terms of appealing to older drinkers and operators may be well served in highlighting features such as a British heritage and ingredient quality to appeal to these more traditional cider drinkers,”Chris continues.
However, despite all the positives for the cider industry there are still issues that need addressing, especially related to the perception of cider among drinkers from other groups such as beer, wine, and RTD drinkers. Within these groups only 14% think cider is worth paying more for, and only 8% think it is a sophisticated drink, which are figures significantly behind those for wine. “While cider enjoys a range of positive associations among drinkers, such as being refreshing, natural and suitable for men and women, sophistication is an area where there is significant room for improvement. The cider market has improved its image greatly over the past decade and should continue working to evolve away from unfavourable historical associations such as those with underage and binge drinking, and towards being a sophisticated drink to be seen with,” Chris concludes.