Aussie spending big on cider as other booze slides
Competitive edge: (from left) pear cider, vodka and soda, red wine, real ale, champagne, gin, premium, lager. Picture: Peter Wallis
Cider sales growth is predicted to be stronger than any other alcohol category over the next five years, according to a new report from market research company IBISWorld.
The local industry has seen annual growth of 14 per cent from 2010-15, and is expected to turn over $277.9 million in revenue this financial year.
Victoria is the country’s biggest producer, making 28.9 per cent of Australia’s cider, followed by NSW with 22.7 per cent and Western Australian with 18.2 per cent.
IBISWorld estimates industry revenue will grow by 8.1 per cent a year over the next five years to reach $410.4 million.
A 21.5 per cent jump in spending on cider has been forecast over the next five years.
The report found that while Australia’s per capita alcohol consumption was decreasing — with beer drinking falling at the fastest rate — there were still a few “sweet spots” in the alcohol industry that could generate revenue growth.
Cider was one of them.
According to former chief judge of the Australian Cider Awards Max Allen, there are 130 cider brands in Australia.
“That’s real cider made with apples and pears, not this flavoured stuff,” he said.
According to IBISWorld business information analysts, Australians will spend an impressive $1 billion on cider this financial year.
Sales of cider have grown by 33.9 per cent a year over the five years, with growth of 21.5 per a year expected over the next five years.
IBISWorld Australia general manager Daniel Ruthven said the burgeoning popularity of cider was coming at the expense of ready-to-drink beverages, such as pre-mixed vodka or whiskey.
The trend away from strictly apple-based varieties of cider was attracting new drinkers, and was also leading to a rise in the number of specialty ciders available on tap, he said.
“Ciders have benefited from increased taxes on ready-to-drink mixes, with many young partygoers now opting for cider as a cost-saving exercise,” Mr Ruthven said.
“While many consumers have switched to craft and imported beers, others have changed to wine and cider.”
Beer consumption is falling, but revenue is increasing as consumers opt for imported and craft varieties, Mr Ruthven said.
“This willingness to pay a premium for quality and variety is also driving revenue in the cider market.”
But it’s not all smooth sailing.
The domestic price of fruit can be volatile, leaving cider producers exposed to price movements when supply shocks occur.
But the high profit margins of cider products mean producers are better placed to absorb price movements than other alcoholic drinks, analysts suggest, Mr Ruthven said.
Cider Australia president Sam Redi said it was better for people to know that they were buying a cider from a producer that grows their grew their own apples.
“It’s a competitive advantage as well as a cost-saving advantage,” he said.
Imports are still a challenge, growing from 25.8 per cent to 27 per cent of domestic demand.
Popular brands such as the Swedish Rekorderlig and Kopparberg, and the New Zealand-based
Monteith’s — have driven this significant import penetration.
Australia’s leading target export market is the United Kingdom (24.4 per cent), followed by New
Zealand (19.8 per cent) and the United States (16.3 per cent).
Integrity of labelling is an issue, Mr Redi said.
“Ensuring that what is called a cider actually is a cider is he biggest challenge out there for us at the moment,” he said.
“We’re pursuing a country of a origin labelling agenda so that the drinkers know where the apples in their cider come from.
A lot of what the report doesn’t mention is how the percentage of Chinese concentrate is in the market at the moment.
“We obviously want consumers to be able to make an educated choice so it’s a level playing field. “
The third annual Cider Australia awards and festival will be held from the October 10 to 12 in Melbourne.
“We’re anticipating a record number of entries into the awards this year due to the growth in the industry,” Mr Reid said.
For more details visit cideraustralia.org.au
Source: Weekly times now - 11th September 2014
