£1bn cider market loses £35m in last year, reports IRI

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Although cider sales passed £1bn last year after several years of growth, the sector is struggling says IRI, the global leader in FMCG market and shopper intelligence.  IRI’s market measurement and analysis of cider sales in UK off-trade retailers – which include supermarkets, off-licenses, convenience stores and independent retailers – shows that sales in the last year (to 15 August 2015) are down by -3.2%, which amounts to more than £35m of sales value.

Volume sales were also down by -3.7% to more than 481 million litres.

IRI’s analysis highlights three key drivers behind the declines:

  1. Poor summer sales– summer is traditionally a peak sales period for beer, lager, wine and, in particular, cider. However cider sales have been lower than average for the last two summers, which has impacted its performance. In 2014, the summer sales dip for cider was the result of people switching to beer, which was heavily promoted during the FIFA World Cup. This year it was the cooler weather that affected cider sales.
  2. More competition – cider is no longer the easy win for manufacturers as more brands enter the market with similar offerings and new product innovation provides more consumer choice.
  3. Shelf squeeze – as retailers continue to reduce the number of individual brands they stock on shelves, cider manufacturers are fighting for space. They are competing against new cider brands entering the market – such as new fruit ciders – as well as with other alcohol growth segments such as prosecco.

There are pockets of growth within cider. These are currently from:

Fruit flavoured ciders – Fruit focused brands, like Kopparberg, appeal to a younger and more female oriented demographic. Sales of fruit flavour ciders increased by 23% – £45m – in the last year.  Kopparberg is now the UK’s No2 bestselling cider with sales of £112m in the last year.

Premium and heritage ciders – traditional premium ciders are still growing as consumers opt for products that offer something special. Brands such as Westons, Thatchers and Aspalls are leading the premium charge.

Toby Magill, head of beer, wine and spirits Insights at IRI, said: “Cider should have made a come-back after last year’s poor summer but didn’t. Life is about to get tougher for cider manufacturers. The poor performance of some cider segments – notably mainstream apple cider products – will be top of mind for retailers as they continue to trim lines. They are increasingly likely to favour the new innovative cider products and premium ranges that are showing impressive sales growth.”

IRI believes that further growth opportunities for premium cider exist with the convenience sector.

“Sales of cider in the convenience channel could be worth more than supermarket sales by 2020,” adds Magill.  “Nearly half of all cider sales are currently in the convenience channel. Value and mainstream ciders do very well in convenience retailers, but we see more opportunity for premium and niche cider manufacturers to increase their share of the growing convenience channel while the supermarkets continue to focus on reducing rather than increasing range choice and so that they can capitalize on the changing consumer taste for premium cider.”

The total off-trade sector for beer, wine and spirits is worth £15 billion. Lager, cider and ale takes 32% of this market with sales of £4.8bn.