Promo Dynamic – Is Promotional Pressure Now Brewing For Cider Brands?
The Grocer
Cider brands could fall victim to the sort of heavyweight promotions seen in the lager market as the category continues to grow, warn industry experts.
Premium ciders were increasingly sold in multipacks rather than single bottles, said Waitrose beer and cider buyer David Wyllyams. They ran the risk of being included in multibuy deals as retailers sought to boost volume sales, he added.
“At the moment the market is focused on single bottles and mixing and matching but you can see, as with beer, the growth of multipacks and more volume driven from that,” he said. “The danger is that prices come down and our competitors put bigger packs of cider into beer deals which is happening already and the industry as a whole sees value eroded.”
The depth of promotions has already increased, according to data from retail analysts Assosia, with the average saving offered on ciders up from 16% between January and August 2010 to 25% in the same period this year. The number of featured space promotions has increased from 721 last year to 751 this year, with the number of x-for-y deals rising from 241 to 404 year-on-year.
Much of the growth in cider could be attributed to new drinkers entering the category, especially young women, said Tim Wilson, managing director of market analysts Wilson Drinks Report. “As this new recruitment plateaus out, there will be a huge temptation to go for more volume at the expense of margin,” he said.
A proliferation of me-too over-ice and fruit-flavoured ciders was in danger of homogenising the mainstream market, added Geoff Bradman, joint MD of premium cider maker Aspall.
“There are some excellent products in the mainstream premium fruit cider market, but there are a lot of new entrants coming in that aren’t that differentiated from each other,” he said. “Therefore, the battle to get volume and share for that segment unfortunately comes back round to price.”
Published in The Grocer, 01 October 2011
http://www.thegrocer.co.uk/fmcg/is-promo-pressure-now-brewing-for-cider-too/221461.article