Cider Market
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Market report 2010 : Premium Ciders
HISTORY
In the alcoholic market the term « premium » has two meanings:
Firstly it may refer to a drinks alcoholic content (measured in percentages as alcohol by volume), however the drink must be marketed at a premium price if the manufacturer decides to market the products superior quality through highlighting the ingredients or manufacturing methods. Premium drinks may, therefore, be marketed through their high alcoholic content or their high quality.
The cider market has fluctuated in popularity since the 1950s. This is due to changing fashions, trends and also product innovations. These ciders were filtered white to produce a bland flavor, yet they were high in alcohol content at 7% ABV. Sales of designer ciders declined in the 1990s when fashions headed towards the alcopop, which usually contained a small amount of spirit (usually rum or vodka) mixed with fruit juice.
The cider market has seen a very big focus on product innovation since 2000S and it continues to fluctuate in popularity. It enjoy the period of great success in the 2000s, owing to “over-ice” brands that were of standard strength (4,5%) put promoted themselves with premium image. Premium brands were helped by an overall interest in cider and their sales figures have increased since 2006, but their share of the total has decreased considerably.
Overall the premium cider sector has benefited from the cider boom of recent years, but future prospects for this sector also appear limited.
Cidre le Brun is considered as premium product due to their high quality of product, manufacturing process (hand picked and traditional) and the alcoholic content (5%). The alcohol rate of cider brewed required to be classed as premium is 6%. But having a stronger percentage also means a higher rate of taxation. Producing premium cider required higher retail price such as special ingredient, superior quality of taste and unique packaging.
The cider market has developed rapidly for several years. There had been a shift a few years ago to lower-strength, over ice products such as Magners and Bulmers Original. However because the drink are around 4.5% in strength and are sold as mainstream drinks, they are not classed as premium.
Another emerging cider market is fruit cider. Although some of these are served with fresh, exotic fruit, it is important to note that the percentage strength is often at around 4%, so they are classed as standard drinks.
ECONOMIC TRENDS
Population: More men drink beer and cider than women, so the fact that there are slightly more women in the UK works against the market. This is something the market will have to cope with in the long term, because projections anticipate this imbalance in sex to continue.
UK Resident Population Estimates by Sex 2005-2009
Female
30 742
30 895
31 068
31 244
31418
29 492
29 69
29 918
30 154
30 374
TOTAL
60 235
60 584
60 986
61 398
61 792
% change
As with most developed countries, population levels in the UK continue to rise fairly slowy. The premium drinks industry cannot, therefore, anticipate rapid growth as a result of population expansion.
Inflation: The rate of inflation has fallen by 4.5 percentage points to -0.5%. The forecast for 2010 predicts a rise back up to 4.2%.
UK Rate of Inflation (%) 2005-2009
Inflation (%)
(%) Change
– 4.5
Deflation applies to pricing in the off trade for beer and cider, but sales in the on trade have tended to rise above inflation.
Unemployement: has risen sharply by 68% in 2009 to over 1.53 million.
Actual number of unemployment person in the UK 2005-2009
Actual number (million)
(%) Change
The recession had an big impact on public houses with many closing over the last few years. A rise number of people will no doubt have an effect on the on trade, because those who want to drink can save money by using the off trade and drinking at home.
Household disposable income: Despite the recession, household disposable income continued to rise in 2009. Over 10 years the average household has seen their disposable income double.
UK Household disposables income per Capita (£) 2005-2009
Household disposable income
13 529
14 080
14 453
14 976
15 350
(%) Change
If Household disposable income rises, people are usually willing to pay more for premium goods and services. This can benefit the premium market.
MARKET POSITION
The UK: Premium ciders enjoy a noticeable percentage share of the total amount of cider purchased in the UK. The main competition the ciders face in the UK market is wine, which continues to prosper and enjoy a sizeable share of the alcohol market. There is also major competition coming from spirits such as vodka and rum.
MARKET SIZE
The total market: producing a total value of each premium market is complex dur to changing trends and attitudes. The total value of the UK premium lagers, beers and ciders market continued to decline between 2006 and 2009 (less concern by the ciders). But there are signs of individual sectors showing improvements, and the total market rose by 1.4% between 2009 and 2010.
The total UK premium Lager, Beers, and Ciders by value (£m) and percentage (%)
% change 2006-2010
Premium lager
11 100
10 600
10 250
10 050
10 150
Premium dark beers
3 475
3 275
3 175
3 300
3 400
Premium ciders