That’s the conclusion Rabobank analyst Francois Sonneville draws in the agribusiness consultancy’s new report ‘Picking Sides in Global Cider’, which notes that the leading brewers have made the most out of the hard apple cider segment in some nations.
“There is room for wineries to benefit from the growth of the super-premium cider segment in both Australia and the US,” Sonneville writes.
“Most of these companies already boast an image of being high-quality beverage producers, and have distribution agreements in place that can be used to sell super-premium cider,” he adds.
Globally, 40% of cider is made by brewers, 35% by specialist cider producers and 25% in wineries. Major wine-producing countries such as South Africa produce almost all their cider in wineries.
Australian wineries have ‘stood on sidelines’
But Sonneville says that wineries are under-represented in the US cider market – where brewery and winery production is roughly equal, while in Australia wineries “have stood on the sidelines” with cider production negligible.
Wine estates can also benefit from such a move by diversifying their production schedule to balance output throughout the year, Sonneville writes in the report.
For instance, in the UK cider sales peak in June when wine sales are typically quiet; this situation is reversed in February, when wine outperforms cider.
Thus, seasonal diversification would benefit wine producers in the Northern Hemisphere, especially in packaging and distribution, Sonneville argues. He notes that this advantage is not available to breweries, since beer sales peak at the same time as cider.
‘Hybrid consumers’ on the rise
Glossing growth in super premium cider, Sonneville also discusses the rise of the (principally female) ‘hybrid consumer’ who flits between super-premium and value cider, ignoring the middle ground.
“Shoppers who traditionally have been spending their household budget between one or maybe two adjacent market segments are now moving towards extreme ends of the product spectrum, trading both up and down, depending on the occasion,” Sonneville writes.
As a result, medium-priced ciders – the current top sellers – will grow more slowly than super-premium and value segments, he predicts.
“If this happens, these two segments – which include leading international premium brands – risk getting stuck in the middle. It would be wise to acknowledge this risk at an early stage and start investing in the super-premium cider segment,” Sonneville adds.
Rabobank expects wineries to become active at the top end of the cider market, Sonneville writes, particularly in Australia and the US, given that wineries have the “right image and distribution contacts to gain a foothold in the super-premium segment”.