Cider Growth Strong

Craft beer currently has the biggest share of mind in retail today, and the beer category is still Canadians’ #1 choice for beverages. However, other categories are showing strong growth – cider in particular. According to Statistics Canada, national beer sales were up 3.1% in fiscal 2015 while the cider category tripled that at 9.2%. Total category sales for cider are only 10% of beer sales, but no other category is seeing such large increases.

Driving the new interest in cider are two phenomena. The first is the interest in gluten-free products. Consumers who want a moderate-alcohol beverage and are trying to avoid grain-based beer are looking to cider.

The second is the ongoing interest of Millennial consumers in ‘authentic’ experiences. A lot can be said about them as a consumer category, and Millennials have a record for focusing on products right at the tipping point of popularity. Their interest is fuelling not only a revival of traditional artisanal European ciders, but also new local brands from apple-growing regions like BC and the Pacific Northwest.

Producers

The category has attracted the attention of international beer companies in Canada and the US who identified cider as a profitable brand extension. The cider brands of one Canadian brewery now account for more than 23% of national marketshare.

Recently, medium-sized producers such as regional breweries and apple producers have launched their own product lines to capitalize on the market.

The craft category of ciders is smaller than national/regional brands, but it generates most of the interest and the fastest growth. Unlike larger brand manufacturers, these craft producers tend to be orchard-to-bottle operations, using apples from their own or other local orchards, without concentrated juices or flavourings.

The Ciders

Most of the national and regional brands fall into the same description: fruit forward, off-dry to sweet, well carbonated, and between 4% and 8% ABV. These not only meet current consumer expectations, they also have broad appeal as an alternative to beer and mixed drinks.

Craft ciders tend to be very different. In some cases they are fermented with specialty yeast, which can add intense character and sometimes a unique wild yeast ‘funk’. Some are aged in oak barrels, or even married to hops for increased complexity.

Also in this category are artisanal ciders from Europe. These include examples from Spain and France, fermented with indigenous yeast in equipment that’s hundreds of years old. These ciders  appeal to discerning drinkers who love craft products and seek out intensity and authenticity in their drinking experiences.

Not all craft cider is earnestly traditional and apple-only: blended and flavoured ciders are being made with local fruits like raspberry, cranberry and blueberry, appealing to drinkers who want a refreshing twist on plain apples. Perry, a cider made from pears, is also a small but strong niche. With softer flavours and a more rounded finish it has distinct appeal.

38% of cider drinkers are under 35 years old (compared to 17.5% for beer drinkers), and 50% earn $70,000/year or more.

Customers

In a 2011 survey, 76% of BC’s cider drinkers were found to be between the ages of 25 and 44. More recent surveys of US consumers showed that 38% of cider drinkers are under 35 years old (compared to 17.5% for beer drinkers), and 50% earn $70,000/year or more. Another key market identified for these ciders is women, who account for 46% of cider sales. Consumer demographics like these bode well for long-term interest in the category.

Producers are taking their sales cues from the craft beer market, using the same kind of packaging and POS that appeals to upscale beer connoisseurs. This attention to positioning attracts buyers who are willing to pay a premium price and are engaged in the idea of a handcrafted product.

Generating new sales is the single toughest task facing a liquor retailer, and competition for consumer dollars is intense. Despite strong growth, cider is still a small category, making it easier to manage than wine or spirits, and consumer interest is not only higher than it has ever been, it is on course to increase at double-digit rates for the foreseeable future.

Factor in the demographic appeal of cider and it becomes obvious that as a retailer you can’t afford to miss the opportunity to cash in on cider sales, both for your immediate bottom line and for future growth.