J
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World ofHeineken 38 - summer 2008
As little as five years ago, the UK cider market
was in decline. Suffering from a poor public
image, the product was only moderately
popular among British consumers, and
was perceived by many as a cheap and
unfashionable drink.
But that all changed in 2003, when Scottish
Newcastle (S&N) acquired the Bulmers
cider business in Herefordshire in the West
of England. Since that time, the company
has transformed this small cider mill into
the largest producer of the product on the
planet. And business is booming.
"Virtually overnight, we became the world's
leading cider company," says Stephen Mosey,
Marketing Manager of the UK's leading cider
brand, Strongbow. "Our stance was, we now
own the cider category; we're responsible for
it and we have to lead it. Following our initial
purchase of the business, we began with
housekeeping and operational improvements.
This gave us time to learn about the market
and to really understand the opportunities."
IMAGE IS KEY
Crucial to S&N's cider success has been a
strong investment in improving the product's
image, a strategy which has rejuvenated the
cider market. As a critical first step, plastic
bottles were steadily replaced by more
premium packaging, helping to establish
cider as a sophisticated, stylish drinking
experience.
"Of course, this meant an initial drop in
revenue, but the sacrifice was worth it, as it
allowed us to create an up-market category:
premium cider," Stephen continues. "We
focused primarily on Strongbow as the
volume-selling brand, but we also wanted to
develop other new products. There's a whole
range of tastes and experiences in cider,
so we needed to make the drink suitable
for a wide spectrum of people and drinking
occasions."
Last year, S&N invested around €33
million in marketing and advertising the
Strongbow brand. The positive result of
S&N's groundwork is a textbook example
of what the brand-marketing approach can
achieve. Cider is currently Britain's fastest-
growing alcoholic beverage category, with
a strong 18 per cent growth rate in 2007
alone. Strongbow, one of S&N's key priority
brands, is the most popular cider in the UK,
accounting for around 40 percent of the
market. Strongbow's growth has surged 42
per cent over the past 3 years.
Over the past few years, Strongbow taps
have continued to spring up in some of the
UK's most stylish pubs and clubs, while a
range of product line extensions have been
released supplementing the portfolio. Similar
to Heineken Extra Cold, S&N also offers
Strongbow Extra Cold, a variant which has
delivered double digit growth over the past
five years.
INTERNATIONAL SCOPE
Heineken's acquisition of this successful
cider business offers the company a valuable
opportunity to expand into an entirely new
beverage category. The product's success in
the UK shows significant potential for growth.
Heineken's extensive distribution network
in countries around the world is a genuine
springboard for possible international rollouts
of its new cider brands.
"Cider continues to have enormous potential
in the UK and that's our number one priority,"
says Jeremy Blood, Managing Director S&N
UK. "There is still opportunity to grow the
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