Rekorderlig Cider has brought a piece of Scandinavia to Auckland's Shortland St with the arrival of a Swedish-themed bar and restaurant that will be open to the public for just ten days. All up, around $400,000 was spent on constructing and promoting the tree filled, wood-panelled Winter Garden. And when you look at the growth of cider in New Zealand and around the world, that seems like a pretty good investment.
Russell Browne, the group marketing manager for the Redwood Cider company, which DB bought last year, says the premium Rekorderlig brand is "a bit of star" in its cider stable (it bought the rights for this market off Chilli Marketing around a year ago). And when you factor in the current 'Cultural Invasion of Scandinavia', they’re on to a winner.
Since DB bought Redwood, Browne says the companies have actually become more independent, with Redwood Cider Co. operating from an office in Parnell and the beer-centric DB staying put in South Auckland. He says it seems counter-intuitive for a merger, but it gives the company an opportunity to “live and breathe cider”.
The total cider market in New Zealand is now worth $42.9 million (according to retail scan data to June 2013 Nielsen). Redwood Cider Co. is number one in the market with a 40.7 percent share via Old Mout (18.4 percent value share, growing at 20.1 percent); Rekorderlig (11.8 percent value share, growing at 308 percent); and Monteith’s Crushed Ciders (10.4 percent value share, growing at 67.9 percent). Treasury Wine Estate owns Scrumpy and Lion owns Isaac’s and Speight's.
At present, he says the whole category is growing at around 30 percent a year. But fruit ciders, which Rekorderlig and the “more accessible” Old Mout tend to focus on, are leading the charge and are currently growing at 170 percent.
Browne says this trend is aligned with the rise of craft beer, where consumers are looking for different combinations of flavours and are willing to pay a premium for the novelty value. But there are still a lot of people who haven’t tried cider and it still struggles to make it onto the booze consideration set along with beer and wine, especially in the winter months.
As a point of comparison, cider accounts for about 15 percent of the market in terms of total value in the UK. In New Zealand, it’s still small, at just six or seven percent of the size of the beer market. According to Nielsen, 15 percent of Kiwi shoppers currently buy cider at retail, up from 12 percent last year, but that figure is around 45 percent in the UK.
“We don’t know where it will stop, really,” he says. “But the UK is a good benchmark to say there’s a bit more growth to come.”
He says it has a few ways to do that, primarily by growing the consumer base by exposing more of them to the products that already exist and trying to change the assumption that cider is a solely summer drink.
This is a major reason for the Winter Garden, a joint effort between Aegis Media agencies Haystac and Apollo Marketing. But Old Mout also has a winter campaign launching soon and Monteith’s is currently running a 15 second ad for its Crushed Apple Cider.
“People still drink cold white wine or cold beer in the winter. They still have a cold Coke in the fridge. So they still want to be refreshed. And while we’ve had a few retailers say ‘why are you promoting cider during winter, you’re mad’, we’re trying to change that behaviour and make it a year-round drink.”
It also about continuing to innovate and develop its brands (it is set to launch another cider brand into the market soon, but he can’t talk about that yet). And, while it’s still important to do the instore sampling campaigns, he says an increasing chunk of his budget is being spent on experiential activations, “because you really don’t know how you’ll enjoy a drink until you’re in the proper environment”.
While New Zealand is obviously a focus, Redwood also sees potential further afield. Monteith’s, which Browne says is also at the premium end of the spectrum and is not from concentrate, sells more in Australia than it does here; there’s also potential for it to be distributed by DB’s parent company, Heineken, in Europe (“which is a bit like selling coals to Newcastle”); it’s already stocked in Singapore; and plans are afoot for a push into Shanghai.
“We’re very keen to get first mover advantage over there. There’s a bit of Magners available, but it’s mostly for the expat community.”
He says the fruity taste profile and the fact it has lower alcohol content than wine should be appealing and it's what’s driving a lot of growth in cider (Stephen Glancey, who heads the company that owns Magners and Gaymers, recently called cider “unisex beer”), but he admits it’s got a massive education and comms job to do in the Asian markets, many of which are still only starting to figure out wine.
He says there’s been quite a bit of research done by the government, which is "really supportive of our push into Asia", into finding the next big export industry. And cider has been pegged as a distinct possibility, because New Zealand grows a lot of fruit and, given the size and status of the wine industry, there is already plenty of expertise and infrastructure when it comes to putting fermented fruit in bottles.