The end of an era as Merrydown stops the cider presses

Related tags Brand management

British drinks group Merrydown has come a long way since its
restructuring in 1998, in particular moving steadily into the adult
soft drink brand with its highly successful Shloer brand in a bid
to offset dwindling cider revenues. That process was continued last
week when the company finally decided to stop making cider at its
plant in Horam, bringing an end to nearly 60 years of production.

Merrydown, like its larger cider rival Bulmer, was badly hit by dwindling cider sales in the 1990s, coinciding, somewhat ironically, with the alcopop craze which Merrydown started with the launch of the Two Dogs brand. Repeated efforts to revitalise the cider market - in Bulmer's case both at home and abroad - ended in failure, and the Bulmer family was finally forced to sell the group to Scottish & Newcastle back in April 2003.

Merrydown, however, took a different route, bringing in a new management team, revamping its finances and taking the visionary decision to elevate one of its minor brands, Shloer, over its then core cider brands. While Merrydown's eponymous cider brands continued to struggle, despite a more up-market repositioning, Shloer went (and indeed still goes) from strength to strength, in turn prompting the latest decision to focus solely on brand marketing rather than production.

"After extensive evaluation of the options we have concluded that to make best use of the group's resources and progress our successful brand management strategy, we should close the manufacturing site at Horam,"​ the company said in a statement last week. The closure will mean the loss of around 35 jobs and the transfer of production (of both Shloer and Merrydown) to contract manufacturers.

The closure will cost the company some £2.5 million, but this is likely to be more than offset by the proceeds of the sale of the Merrydown production site, located between Eastbourne and Tunbridge Wells in what is otherwise a decidedly rural part of south east England.

"Given Merrydown's history in Horam this is a painful decision which has not been taken lightly but, in the final analysis, we believe this is the best use of assets and concentrates our resources on the strategy of managing our brands,"​ said Nigel Freer, Merrydown's chief executive.The company said that the move would lead to long-term gains in profitability, as it would mean greater production capacity - important for a company with such big plans for the Shloer brand, which already runs to several variants - and improved efficiencies.

The brand management strategy has certainly been shown to work, with Shloer sales ahead 30 per cent in the year to 31 March at £13.9 million and even cider sales improving thanks to a 10 per cent gain from the premium Vintage brand, its "best performance in years"​, according to Freer.

Most of the cash generated by the sale of the Horam plant will be returned to shareholders, the company said, but some of the proceeds will also be used to continue the good work in packaging design, marketing and product development which have helped the company to such a miraculous turnaround in the last six years.

Related topics Manufacturers

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