Cider category dollar share shrank in 2019, however, the growth of regional and local producers proved to be a bright spot, Danny Brager, senior VP of market research firm Nielsen’s beverage alcohol practice, shared Thursday during the American Cider Association’s (ACA) annual CiderCon conference in Oakland, California.
“While total cider may be down a little bit, the regional/local cider segment within that is up pretty sharply — up 15% — and its share is now getting close to 40%,” Brager said.
Regional and local cider producers’ share of the category has grown steadily over the last decade. In the Pacific Northwest, local cider accounts for nearly two-thirds of the market, Brager said. Although other regions are not as well-developed, sales of local and regional ciders increased double digits compared to 2018 in each geographic region. Midwestern cidermakers’ sales increased the most at 25%.
The trends change, though, when national brands are included, leading to all regions declining single digits.
In 2018, the cider category as a whole grew, buoyed national launches of rosé ciders from brands such as Boston Beer Company’s Angry Orchard and Molson Coors’ Crispin Rosé. However, those products slumped in their sophomore year, leading the rosé cider segment declined 13%. Nevertheless, three quarters of the roughly 50 rosé brands tracked by Nielsen grew in 2019, Brager said.
In fact, sales of regional rosé offerings doubled in 2019, Brager said. Among regional producers, pineapple-flavored ciders outsell rosé and other cider variants such as hopped and berry flavored.
The growing variety of flavors aligns with one of the seven major consumer trends Nielsen has defined in the beverage alcohol space. The others include health and wellness, premiumization, convenience, channel and category blurring, authentic experiences and generational and demographic shifts as consumers age and the population becomes more multicultural.
According to Brager, cidermakers can incorporate these trends to craft new products and marketing campaigns. An increasing number of cider makers are also packaging their offerings in cans, which coincides with the convenience trend. Brager encouraged attendees to consider consumers’ desires when choosing packaging formats.
“What’s the packaging that you’re offering?” he asked. “Is it a convenient package? Can I take it somewhere and go to the beach for instance or go to the pool?”
Canned cider sales dollars increased 30% in 2019, while bottles declined 17%, Nielsen found. As a result of this shift, cans now account for 37% of dollars spent on cider.
Can sales increased in 2019 across several categories, including craft beer (+24%), wine (+79%) and ready-to-drink spirits (+102%).
Brager added that the cider drinker is far more promiscuous than consumers of other alcoholic beverages. More than 70% of cider drinkers also buy beer and nearly 80% of them also buy wine in off-premise retailers tracked by Nielsen. Slightly less than half of cider drinkers also buy craft beer and about 60% of cider buyers also purchase spirits.
However, drinkers of those categories rarely purchase cider. The cider purchasing rate for beer, craft beer, wine and spirits hovered around 10%.
“There’s certainly opportunity to convert more of them to get into the cider category,” Brager said.
Those categories aside, one alcoholic beverage segment has a significant amount of crossover appeal with cider drinkers: hard seltzer. About 20% of cider drinkers buy seltzer and 20% of seltzer consumers also buy cider.
Hard seltzer became a $1.6 billion business by the end of 2019, nearly half of which was incremental spending, Brager said.
“They might have been buying beer or wine or cider, whatever, and a good chunk of them are adding this on to their repertoire,” he added. “Within the part that isn’t incremental, it’s really coming from everywhere.”
Brager cautioned that hard seltzer poses a threat to cider in the on-premise, as retailers are often reluctant to allocate many tap handles to non-beer offerings.
“It’s hard fighting for tap handles,” Brager said. “And it’s going to get tougher because hard seltzers are now coming into the on-premise in a big way, and they’re going to grab some handles tooI.”
On-premise trends for cider were down in 2019, with total sales decreasing nearly 3%, according to Nielsen and on-premise market research firm CGA. About two-thirds of all cider sold on-premise is on draft, which declined 3.7%. Packaged offerings on-premise were down 0.8%. National brands accounted for 53% of all on-premise cider sales, and those brands declined 4.2% last year. Regional and local brands made up 47% of on-premise sales and declined 1.1%.
Brager advised cidermakers to continue to leverage consumer trends: offering cans, experimenting with flavors and marketing to age groups outside of cider’s traditionally younger base. More than 40% of cider drinkers fall between the ages of 21 and 29.
As population growth slows, Brager cautioned against waiting for younger consumers to come of age and instead suggested they appeal to older consumers.
“If there is any growth, it’s really at the senior end, the 65-plus as Boomers move into that age and people are living longer,” Brager said. “So there is growth there but that’s not exactly the core of the cider drinking population either.
“If you net all that down, we’re kind of fighting for share with everybody else that’s going after that same drinker, the 21-plus drinker.”