The latest Westons Cider Report reveals almost half of UK households (47.7%) now buy in to the category, which attracted almost a million more shoppers in 2020.
What’s more, shoppers bought cider in greater volumes – averaging an additional 30 litres per household, up 9.4%.
And, while the enforced closure of pubs, bars and restaurants for much of 2020 certainly played a part the category’s off-trade success – as consumers swapped trips to their local for a ‘quiet night in’ and an influx of new shoppers bought in – the report also calls out premiumisation as a catalyst of category growth.
Darryl Hinksman, Head of Business Development at Westons Cider, tells Wholesale Manager how the cider market is performing and what trends are driving growth.
How much is the off-trade cider category worth?
Overall, cider is worth £2.1bn. The volume of total cider is 687m litres, down 12%. The total off-trade is worth £1.3bn and that is a volume increase of 17% and value is up 21%. That is driven by premiumisation – people drinking better. Also, new shoppers are entering the category – nearly 48% of shoppers are new to the category. Convenience is tracking ahead of the overall market at +24% in value and +20.1% in volume. We have definitely seen within the year a movement towards convenience as people do more frequent shops. There are more people, buying more and shopping more often. People are shopping in convenience because they don’t want to go to big footprint stores. We have seen convenience benefit from that, from a cider perspective.
Is the market in growth? What is driving the growth?
As well as convenience, online is also growing. Nearly 10% of cider sales have come from online. People will remain shopping online but within the convenience channel that habit will remain as well. Undoubtedly the dynamics have changed but as the market begins to open, I don’t necessarily think people will go back to their old habits. Brand-wise there has been a massive premiumisation swing. I think people are transferring their on-trade spend into the off-trade. People are enjoying more premium at-home occasions. We have seen a big rise in crafted cider in particular. Market share on crafted has gone from about 12% to about 13%. Within that, we have benefited significantly on Henry Westons. We have gone from £45m last year to £61m this year. We are seeing bigger growth within convenience where we are up about 27%.
Besides premiumisation, people are buying bigger packs. We have seen a huge move towards cans, which are growing 30%, ahead of bottles at 20%. Within our own portfolio we have seen bigger pack formats growing significantly. 4-packs are growing 65% and the 10-packs are up 643%. When people go shopping they stock up. Premiumisation and people buying more are driving that dynamic. Looking at the convenience data, it’s very reflective of that.
Also, value amber and value white ciders are performing very poorly. For a company like us that is really good news because we don’t compete in that arena, we don’t make big plastic bottles of cider in the cheapest possible way. Value amber has declined over the last 12 months and value white is nearly 8% down. That’s good news for the category. By comparison, in convenience if you look at mainstream, its up 25%. If you look at crafted, which is where we largely play with Henry Westons, it’s up 76%. So it’s a real swing.
Do you think the people who bought value cider are buying a different category now?
Either that or they have traded up. If they are on-trade consumers as well, and most of them would be, they have not been spending in the on-trade. So if they have an allocated amount to spend on hospitality, they can get much better value for money in the off-trade than they can in the on. I think we are seeing most of them trade into mainstream so it’s not a big step up into premium but certainly a step up from where they have been in terms of plastic bottles. People at the bottom have shuffled up a sector. That is absolutely the pattern of premiumisation.
What is the household penetration of cider?
Up to 48.6% of households are buying cider. That is up from 45% the previous year. The biggest movement has been on average purchase volume.
What effect did Covid and the resulting lockdowns have on the off-trade cider market?
It has had a massive effect. When the on-trade opened up in between the lockdowns, it was marginal because they opened up in restricted ways. So the last 12 months has been about off-trade and online, both via our own website and direct to consumer through Amazon and other sites. Those are the key dynamics that have impacted the cider market this year. The off-trade growth has not offset the on-trade loss in terms of volume. The volume loss in the on-trade is quite significant. But as a business we had a good year. Although we didn’t compensate for what we lost in the on-trade, we did particularly well in the off-trade and online and we made savings in other areas.
How is craft cider performing?
People are premiumising and that has played a huge role. I think it’s incredible that craft cider has grown as significantly as it has because it is in much smaller formats. Single bottles for example have only been a couple of percent but bottles in total are up around 30%. We have seen a huge amount of innovation. We launched Organic, Cloudy and Rosé back in February. Those skus have brought new consumers into the brand. People are looking for variety and the category offers that. Launching those NPDs added £2m on top of the growth on Henry Westons Vintage. People are trialling more and are much more promiscuous in terms of trying new flavours and new brands. Craft has really benefitted from that. I haven’t looked at other categories but I would assume that is a fairly consistent story that people have premiumised their drinking across the board.
What share of the market does fruit cider have compared to apple cider?
Apple still has the majority of the market, at 60%. Fruit cider has 35% and pear cider has 5%. Both areas have done well in the last year. Apple cider is up +22.3% while fruit cider has grown +22.9%. The split between apple and fruit has not changed significantly over the last 12 months. Within fruit cider there has been massive growth of the rosé category. That has become a £42m category in the space of a year, up 400%. Drinkers have moved from wine into the rosé cider category and that is definitely a key focus area for us.
What are the biggest emerging trends in the cider market?
The decline of value amber and white cider will continue and if anything accelerate. There is still a disproportionate amount of space allocated to those two sub-segments. If more space is allocated to craft ciders, then you start to get a snowball effect. If ciders that are doing well get more space they will start to do even better. We expect these dynamics to continue: the ongoing decline of value amber and value white and the ongoing growth of the rest of the cider categories.
How do you work with wholesalers to improve sales?
We work with them from a category perspective. We recognise that there is a limited amount of space in convenience and their priority needs to be stocking the top selling skus. Within cider that would largely be Strongbow, ourselves on Henry Westons and Stowford and Thatchers. There also has to be representation in fruit which is Koppparberg. We focus on sharing category insights, making sure they are aware of the category dynamics. They don’t always have access to the same information as the grocers. So we share details about the brands they need to stock and the dynamics we see in terms of format mixes so the split between bottles and cans. We continue to share insights into trends such as people moving into bigger pack formats. That is particularly key within wholesale because historically it has been a 4-pack led market on cans. It is moving into bigger packs like pint cans and 10-packs. We have quite a lot of feet on the ground that will call on wholesalers to deliver those category messages. They work with them to merchandise their ranges accordingly to make sure shoppers are coming in to stock up for their independents. We spent a lot of time in wholesale during lockdown redoing all their point of sale, updating all the brand messages so they know Henry Westons is the number one selling bottle cider in the UK. If they have got to stock one bottle it has got to be Henry.
What advice do you have for wholesalers in merchandising the cider category?
I think they should merchandise in line with what the market is demanding. We do see that but there is a bit of a lag in terms of catching up with dynamics and trends. Make sure 60% of your space is on apple and 40% is on fruit. From a format perspective I would be saying make sure 60% is can, 30% is bottle and 10% is plastic. Plastic bottles played a massive role in convenience previously but it is a declining category. Making sure they dedicate that space to a more premium offering would be my biggest advice.
Does Westons have any NPD this year?
We haven’t got any NPD to talk about. We have seen huge growth on our NPD on Henry, Rosé, Cloudy and Organic. Outside of those variants there is a big requirement for us to deliver bigger pack formats. That is one area we will be looking at as we go into next year – how can we offer better weight of purchase within crafted cider. At the moment it is quite single bottle led.