14/07/2022

Cider picks up pace with innovation cues from RTDs

Although the cider market faces two main challenges in the years ahead, its outlook is relatively buoyant

The outlook for the cider market is relatively upbeat. On top of the category’s 8% volume growth in 2021, IWSR expects cider volumes to grow at a volume CAGR of 2%, 2021-2026. Cider volumes are expected to surpass 2019 levels in 2023.

The category does however face two main challenges in the years ahead. One is to dilute its reliance on the UK and Ireland, and the other is to counter the threat from the Ready-to-Drink (RTD) market with which it competes for many drinking occasions and drinkers.

Both the UK and Irish cider markets look to be coming out of boom periods, and IWSR data suggests that both countries may have seen cider peak in the mid-term. Achieving growth is likely to become difficult in in these core markets – which account for a third of global cider sales. Other regions do offer opportunities for the category, and cider volumes grew over 50% in Africa in 2021. Brand owners such as Heineken have been investing in cider’s biggest African market – South Africa, where there has been an existing tradition of cider drinking.

Regional expansion at a domestic level was what helped cider in the UK emerge from a trough period a little more than fifteen years ago. At the time, cider distribution continued to be biased towards the West Country and a small pocket in the Northeast of England where they enjoyed sweet ciders. This was to change with the import of the ‘over ice’ concept from Ireland, which catapulted cider into a national drink versus a regional one.

It was the arrival in the mid-nineties of RTD products in the UK that led to a steep decline in cider consumption, driven primarily by younger LDA drinkers switching from cider to the RTD category.

The buoyant RTD category is undoubtedly constraining the cider category today. This can be seen in what some might consider a sleeping cider giant, the US. Cider in the US was going well, with sales more than trebling between 2012 and 2015. The green shoots of a craft cider movement became evident before the rapid rise of RTDs stunted the development of the category.

In the UK, cider brand owners competed with the rise in RTDs by innovating with new flavour ranges – building on what pioneer Kopparberg achieved after it arrived in 2003. The rapid development of the fruit cider segment blurred the line between RTD and cider. Cider also became more gender-neutral and could be marketed as a ‘natural’ drink with a broad flavour appeal. Democratising cider helped brand owners to reach new audiences and win back existing ones from the RTD category.

Recent innovation from cider brands in the UK highlights this democratisation. Normandy-based cidery Maison Sassy, for example, introduced a zero-ABV version of its original Sassy Organic Cider in the UK. Aimed at millennial consumers, the alcohol alternative was launched to meet the on-premise opportunity. More specifically, Sassy has said it is seeking millennial consumers who are interested in heritage and authenticity. Heineken is also targeting younger LDA cider drinkers with the launch of its low-calorie Strongbow Ultra Dark Fruit.

New flavours continue to provide interest in the category as well. Earlier in 2022, family-owned UK craft cider brand Thatchers, for example, launched a new blood orange flavour. Molson Coors also added a blood orange flavour to its Rekorderlig Cider range, following its other recent flavoured-cider launches such as pink-lemon and watermelon-citrus. British cider brand Brothers has added a new varietal said to target trending cherry flavours – Brothers Cider Cherry Bakewell is inspired by the popular British dessert of the same name.

Similar strategies are evident in the cider category in the US, where regional cider brands continue to perform well and leverage current consumer trends to maintain relevance. Tapping into the health and wellness trend, for example, Schilling Cider released Vida Mate cider which contains Yerba Mate, a natural tea-like compound containing health benefits, in flavours blackberry lemonade, lemon mint and mango lime.

Cider brands in the US are also leveraging the hard seltzer trend by releasing seltzers with a cider base. For example, Austin Eastciders Spiked Seltzer comes in flavours such as mango, black cherry, apple, and peach. Blake’s Hard Cider Co has launched Blake’s Hard Cider Paloma, a cocktail-inspired cider as part of its new Bar Cart Series. Inspired by top-selling cocktails, the Bar Cart Series is designed to be drinkable on its own, or with the addition of 1–2oz of spirits to create a cocktail. Paloma is the first in a range of three, and combines grapefruit juice, lime, and tequila, and semi-sweet hard cider, combining citrus and sweet agave over the apple cider base.

At the premium end, Heritage hard cider is also making in-roads with enthusiasts, as each year’s crop is captured in the bottle similar to that of wine making at a vineyard.

All the recent cider innovation points to a category that is benefitting from consumer interest in RTDs. With an opportunity to leverage its core flavour base with the additional unique attributes that appeal to today’s consumer, the runway for cider growth could be long.

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