In 2011, cider was the shining star in Australia’s otherwise sluggish alcohol market. The wine sector continued to struggle and beer sales declined for the first time in four years as growth in the low-carb and premium segments slowed. In contrast, growth in the cider category gained momentum, accelerating to 50 per cent in the last three months of the year.
When Glenn Cooper was asked about Australia’s flourishing cider market in an interview with The Shout, he responded that it is still only a small part of the overall alcohol market when compared to beer volumes. He added that cider may turn out to be a “short-term trend”, with consumers eventually moving on to “something new”.
It’s true that cider only represents around two per cent of Australia’s $14 billion alcohol market, but Kieron Barton, MD of Rekorderling, one of Australia’s fastest growing cider brands, claims this is just the start of a major shift in drinking habits. He points to the UK, where cider makes up 12 per cent of the overall liquor market, as an example of how the local market is likely to develop.
“Cider kicked off in the UK in 2004 and it is the only [alcohol] category that has remained in growth every single year since then,” he says. “[Over this period of time], the UK has gone through the global financial crisis and it’s going through another recession or flat market now, but cider is still forecast to grow 45 per cent over the next five years.
“That’s not a trend, that’s a change in consumption habits.”
Barton explains that, while Australia is five years behind the UK cider market, it is following the same growth pattern.
“The cider market really started to grow here three years ago, but it’s rocketed in the last 12 months and that’s exactly what happened in the UK,” he says.
Clive Coleman, Carlton United Brewers’ (CUB) group marketing manager for cider, supports this theory. CUB holds around 60 per cent of the Australian cider market and its portfolio includes Australia’s most popular cider Strongbow, as well as Bulmers, Tassie-favourite Mercury and craft cider Dirty Granny.
Coleman argues that the cider category will continue to experience strong growth long term because it is aligned with a number of key consumer trends.
“I don’t believe cider is just a fad,” he says. “You just have to look at the macro global trends to see cider is bang on.
“There’s a shift towards easier drinking beverages that are less bitter, and for sweeter beverages in general as food has become more processed over the last 20 years. The younger generation definitely has a sweeter palate [than previous generations] and again that plays more into cider than beer or wine.”
On top of this, he says, because cider is made with fruit, consumers tend to perceive it as being a healthier option than RTDs, which usually include more artificial ingredients. For Coleman, however, the most interesting factor contributing to the rise of cider drinking is the appeal of ‘unisex drinking occasions’, with young men and women wanting to drink the same thing.
“It’s more fun for them to drink the same thing and it makes them feel as if they’re part of a group,” he says. “When I grew up, men would have their beer and bourbon and women would have their white wine and RTD, but that’s changed. Beer drinking was once a rite of passage for young males, but cider is now seen as an acceptable alternative.
“It appeals to both males and females, not being too sweet or too bitter. I don’t expect that to change and I believe this trend will go from strength to strength.”
The core cider-drinking demographic is fairly evenly split between men and women and tends to be younger consumers under the age of 24 years. However, the demographic is already broadening as the market matures. Barton says that, while the Surry Hills hipsters may have been the ‘first movers’, the cider bubble has burst and it’s being consumed across the country by a variety of age groups.
“There’s places all over the country where the market is exploding – Perth is going gang busters, for example – there’s just more and more people starting to consider cider,” Barton says. “...The UK cider market’s about 12 years old and the first movers have grown older but continued to drink cider while the category has grown organically with more young people coming into it.”
No doubt, the breadth of cider’s appeal is supported by the wide range of cider styles and brands. Last year, approximately 90 cider brands – a mix of local and imported – were launched in Australia and there were over 50 per cent more SKUs on shelf compared to 2010. Coleman explains how CUB’s cider portfolio has been organised to cover the market with different ciders aimed at different demographics.
“Strongbow is your easy-drinking mainstream player, it’s one of those brands like Coca-Cola that everyone loves; Bulmers is a premium cider with the UK history and heritage; and then you’ve got Dirty Granny playing in the craft areas,” he says. “You’ve really got each of the major sub-segments covered by our portfolio.”
Opinions vary as to how the cider category will evolve, but there’s a consensus that we’ll see more flavoured ciders in the future. Nielsen’s associate director of liquor services Lance Song believes the ongoing proliferation of new brands and new flavours will help maintain more fickle consumers’ interest in the category.
“Younger consumers are interested in new products and new flavours, and are going to be looking for more than the traditional apple base,” says Song.
When it comes to flavoured ciders though, Rekorderlig is undoubtedly leading the way. Its portfolio comprises six variants: Apple; Pear; Strawberry-Lime; Wild Berry; Apple and Blackcurrant; Winter Cider with apple, cinnamon and vanilla. The Swedish-owned company has been active in Australia for a little over a year and has experienced staggering market growth to become the second-biggest selling cider in the country in December, only just behind the category stalwart Strongbow.
On a similar line, CUB launched Strongbow Pear in June last year and Bulmers Blackberry in November, which Coleman says is performing very well.
“In the UK, Bulmers has gone down the flavour route and also different apple varietals, and we may well follow that here,” he says.
The other areas of the cider market that Coleman expects to grow and see innovation are international premium and local craft brews.
“I could definitely see Dutch ciders and even ciders from Spain, which is one of the biggest markets for cider, [selling here],” he says. “I mean the cider companies around the world must be looking at Rekorderlig’s success and saying ‘I want a piece of that’.”
Dirty Granny, launched last July, is produced by CUB-owned micro-brewery Mathilda Bay which tweaked its craft beer brewing style to create a darker, drier cider than usual. The cider has been well received and took gold at the 2011 Australian Cider Awards for best local cider. At present, craft cider represents 2.5 per cent of the cider market, while craft beer holds 10 per cent of the Australian beer market, suggesting there’s room for growth of this cider sub-category.
Stealing market share
While the common assumption seems to be that cider is growing at the expense of the beer market, Song asserts that it is being consumed as an alternative to a number of alcoholic beverages.
