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Cider - UK - February 2012

INTRODUCTION
Definitions
Abbreviations
EXECUTIVE SUMMARY
The market
Figure 1: Market size and forecast for the total UK cider market, by value, 2006-16
Market factors
Figure 2: Most popular occasions for drinking alcohol at home and out of home, May 2011
Companies, brands and innovation
Figure 3: Market shares of the top five selling cider brands within the off-trade, 2011
The consumer
Figure 4: Reasons cider drinkers consume cider over lager, December 2011
Figure 5: Factors which stop people drinking more cider, by gender, December 2011
What we think
ISSUES IN THE MARKET
Can cider become the new lager?
How can cider increase its frequency of sales?
What is the biggest growth opportunity for cider in the next couple of years?
What are the major challenges to cider’s continued growth?
FUTURE OPPORTUNITIES
Collective Intelligence
Minimize Me
INTERNAL MARKET ENVIRONMENT
Key points
Cider faces flavour innovation challenge from rivals
Figure 6: Selected examples of flavoured alcoholic innovation in the past 18 months
Changing drinks landscape increases importance of targeting key occasions
Figure 7: Index of price rises for wine, spirits and cider – on-trade versus off-trade, 2000-11
Figure 8: Most popular occasions for drinking alcohol at home and out of home, May 2011
Taxation gives cider a competitive edge
Figure 9: Changing UK excise duty rates for cider compared to beer, wine and spirits, 2003-11
Strategies for cider: the demand for premiumisation versus value
Figure 10: Changing grocery spending habits, 2009 and 2011
Evidence that cider transcends just being a summer beverage
Figure 11: Penetration of cider drinkers, Q1 2006-Q2 2011
Local cider brands can do more to leverage their authenticity
BROADER MARKET ENVIRONMENT
Key points
Consumer spend is under increasing pressure
Figure 12: Change in average weekly earnings compared to inflation and consumer confidence, January 2007-October 2011
2012 will be a challenging trading environment
Rise in ABC1s underpins the continued importance of premiumisation
Figure 13: Forecast adult population trends, by socio-economic group, 2006-16
Impact of an ageing population
Figure 14: Forecast adult population trends, by age, 2006-16
COMPETITIVE CONTEXT
Key points
A declining pool of users makes targeting even more integral
Figure 15: Proportion of UK population who drink alcohol, 2007-11
Cider now ranks as the third most drunk major alcohol type
Figure 16: Penetration of major alcohol types in order of popularity, 2007-11
Drinks increasingly catering for consumers’ sweet tooth
STRENGTHS AND WEAKNESSES IN THE MARKET
Strengths
Weaknesses
WHO’S INNOVATING?
Key points
Introducing more extreme flavour and colour
Adding spice to cider
Experimentation with ABV
Aluminium can be a stylish, modern twist on the ubiquitous glass bottle
Developing features of cider’s taste profile
Interesting examples of global cider innovation
MARKET SIZE OF CIDER
Key points
Cider is one of the few alcohol success stories of the past six years
Figure 17: Market size and forecast of volume and value sales in the total UK cider market, 2006-16
There is still plenty of room for growth in the next six years
Figure 18: Market size and forecast for the total UK cider market, by value, 2006-16
Forecast methodology
MARKET SEGMENTATION OF CIDER
Key points
Cider is rapidly increasing its share of the supermarket drinks aisles…
Figure 19: Volume and value sales of the UK off-trade cider market, 2006-16
Figure 20: Market size and forecast for the off-trade UK cider market, by value, 2006-16
…which brings dangers as well as opportunities
Cider is one of the few products holding its own in the troubled on-trade
Figure 21: Volume and value sales of the UK on-trade cider market, 2006-16
Figure 22: Market size and forecast for the on-trade UK cider market, by value, 2006-16
MARKET SHARE
Key points
Strongbow remains the off-trade power brand
Artois Cidre shakes up the market
Figure 23: Market share in value sales for the top ten cider brands in the off-trade, 2009-11
Kopparberg leads the way for premium-positioned ciders
COMPANIES AND PRODUCTS
Key points
AB InBev
Aston Manor Brewery
C&C Group
Halewood International
Heineken
Kopparberg
BRAND COMMUNICATION AND PROMOTION
Key points
Adspend slows down as Magners downgrades marketing investment
Figure 24: Total above-the-line advertising spend in the UK cider market, 2006/07-2010/11*
Less well-known brands pushed up spend in 2010/11
Magners is still the biggest spender
Figure 25: Topline spend in the UK cider market, by brand, 2008/09-2010/11*
Strongbow increases adspend and steers clear of premium positioning
CHANNELS TO MARKET
Key points
Supermarkets are now comfortably the major volume driver for cider
Figure 26: Volume sales of cider, by on-trade and off-trade channels, 2008-10
The rise of online alcohol purchasing
CONSUMER USAGE OF CIDER
Key points
Cider penetration is now equal to lager…
Figure 27: Consumption of alcohol in the past six months, by drink type, December 2011
…but it is not efficient enough in converting penetration into revenue
Increasing awareness of dry ciders can position it as an ‘all night’ drink
Cider has the advantage of appealing to both genders
Figure 28: Proportion of cider drinkers in the past six months, by gender and age, December 2011
Cider attracts a younger audience than a decade ago…
…but more premium branding can capitalise further on this
New sweeter fruit variants attract a particularly young consumer base
Figure 29: Penetration of the three different types of cider in the past six months, by gender and age, December 2011
Brands need to deliver multiple flavours
Figure 30: Consumption of different types of cider in the past six months, December 2011
Figure 31: Index of consumption of solus apple cider drinkers and consumers of all three cider types, by gender, age and socio-economic group, December 2011
CONSUMER – GENERAL REASONS WHY PEOPLE DRINK CIDER
Key points
Freshness is cider’s USP
Figure 32: Reasons for drinking cider, December 2011
Refreshment is an important all-year need…
…and refreshment and freshness are key reasons for choosing cider over lager
Figure 33: Reasons cider drinkers consume cider over lager, December 2011
A younger generation with more desire for sweeter alcohol flavours
Figure 34: Net difference in reasons for drinking cider – under-35s versus over-35s, December 2011
Figure 35: Net difference in reasons why cider drinkers consume cider over lager – under-35s versus over-35s, December 2011
Over-35 drinkers are attracted more by freshness than sweetness of flavour
Cider is particularly drinkable for females
Figure 36: Net difference in reasons for drinking cider – females versus males, December 2011
CONSUMER – BARRIERS TO DRINKING CIDER
Key points
Taking the next step is about cider becoming more ‘top of mind’
Figure 37: Factors which stop people drinking more cider, December 2011
Calories and bloatedness are barriers to women drinking more cider…
Figure 38: Factors which stop people drinking more cider, by gender, December 2011
…as well as the younger 18-34-year-old generation as a whole
Figure 39: Factors which stop people drinking more cider – 18-34-year-olds versus over-35s, December 2011
APPENDIX – INTERNAL MARKET ENVIRONMENT
Figure 40: RPI % change for spirits, cider and wine (data not available for separate categories) – on-trade versus off-trade, 2001-11
APPENDIX – MARKET SIZE AND FORECAST
Figure 41: Market size and forecast for the total UK cider market, by volume, 2006-16
Figure 42: Best and worst case forecasts for the total UK cider market, by value, 2011-16
Figure 43: Best and worst case forecasts for the total UK cider market, by volume, 2011-16
Figure 44: Market size and forecast for the UK off-trade cider market, by volume, 2006-16
Figure 45: Best and worst case forecasts for the off-trade UK cider market, by value, 2011-16
Figure 46: Best and worst case forecasts for the off-trade UK cider market, by volume, 2011-16
Figure 47: Market size and forecast for the UK on-trade cider market, by volume, 2006-16
Figure 48: Best and worst case forecasts for the on-trade UK cider market, by value, 2006-16
Figure 49: Best and worst case forecasts for the on-trade UK cider market, by volume, 2006-16
APPENDIX – BRAND COMMUNICATION AND PROMOTION
Figure 50: Advertising expenditure in the UK ciders market, by advertiser, 2008/09-2010/11
Figure 51: Advertising expenditure in the UK ciders market, by brand and advertiser, 2008/09-2010/11
APPENDIX – CONSUMER USAGE FOR CIDER
Figure 52: Consumption of alcohol in the past six months, by types of cider, by demographics, December 2011
Figure 53: Most popular types of alcoholic drinks consumed in the past six months, by demographics, December 2011
Figure 54: Next most popular types of alcoholic drinks consumedin the past six months, by demographics, December 2011
Figure 55: Other types of alcoholic drinks consumed in the past six months, by demographics, December 2011
Figure 56: Most popular types of alcoholic drinks consumed in the past six months, by demographics, December 2011
Figure 57: Next most popular types of alcoholic drinks consumed in the past six months, by demographics, December 2011
Figure 58: Other types of alcoholic drinks consumed in the past six months, by demographics, December 2011
APPENDIX – CONSUMER – GENERAL REASONS WHY PEOPLE DRINK CIDER
Figure 59: Reasons for drinking cider over lager, by demographics, December 2011
Figure 60: Reasons people drink cider over lager, by demographics, December 2011
Figure 61: Reasons people drink cider over lager, by demographics, December 2011
Figure 62: Most popular reasons people drink cider, by demographics, December 2011
Figure 63: Next most popular reasons people drink cider, by demographics, December 2011
Figure 64: Most popular reasons people drink cider, by demographics, December 2011
Figure 65: Next most popular reasons people drink cider, by demographics, December 2011
Figure 66: Other reasons people drink cider, by demographics, December 2011
APPENDIX – CONSUMER – BARRIERS TO DRINKING CIDER
Figure 67: Most popular factors which stop people drinking more cider, by demographics, December 2011
Figure 68: Next most popular factors which stop people drinking more cider, by demographics, December 2011
Figure 69: Factors which stop people drinking more cider, by demographics, December 2011
Figure 70: Most popular factors which stop people drinking more cider, by demographics, December 2011
Figure 71: Next most popular factors which stop people drinking more cider, by demographics, December 2011
Figure 72: Factors which stop people drinking more cider, by demographics, December 2011
Figure 73: Typical calorie content, by alcohol type, December 2011

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