The past decade has loudly proclaimed the rise and rise of UK craft breweries and artisan spirits, with brands such as BrewDog and Sipsmith mastering the art of successfully selling Brand Britannia at home and abroad.
However, it now appears that UK craft Cider makers are also keen to get in on the act. Cornish Orchard has recently reported that Russia is now their biggest exporter, accounting for 45% of their international sales. They have found that their ciders are particularly popular in Moscow’s trendiest bars and a ‘British craft’ brand is seen to have great appeal with younger, aspirational Russians. According to a recent European Cider Trends report (source: The National Association of Cider Makers), the Czech Republic and Ukraine are also proving to be some of the fastest growing markets for cider.
The demand for innovative flavoured ciders is also on the rise, especially with female drinkers who now make up nearly 50% of the market. They are increasingly more likely to see fruit cider as an alternative to cocktails and wine, according to Phil Tate, from marketing firm CGA Strategy.
These indicators all bode well for UK producers who are seen as leaders in the production of innovative or small batch, crafted ciders and perries.
But the above opportunities also sit side-to-side with a number of challenges for our local cider industry.
- Unlike brewers or spirit distillers, cider makers have to plan well in advance if they are to be ready to take advantage of market growth. New orchards take years to develop and production capacity often is only calculated after the annual harvest. Once apples have been juiced and set to ferment, then it’s a case of working out how to sell your produce over the coming year into an increasingly competitive market place.
- The increasing ratio of cider sales in favour of the off-trade (64% off-trade to 36% on-trade) inevitably means additional investment in bottling, canning and packaging design for the producer again impacting on profit. Plus there is a requirement for more focus/investment on the “Brand” to enable it to stand out from the crowd in the off-trade.
- Recent adjustments to tax duty for cider makers have also made it more difficult to make a healthy return, especially if you are a smaller independent.
All these points make it difficult for all but the sharpest or largest producers to focus on markets at home and new opportunities further afield and highlight the increasing requirement for long-term planning. When it comes to cider making, with your long lead times and requirement to forward commit, I believe long-term planning is an absolute essential. At The Business of Drinks, we have found with our cider clients that walking them through a 3 year forward planning process (called the Orbit Plan Review) has really helped them plan their business going forward, giving them more confidence to increase their volumes.
If you’d like to find out more, please get in touch and we'll be happy to explain how it could help enable your business growth for the future.