The category continues to grow, appealing to younger, more affluent consumers, and the sector is seeing a surge in product innovation.
“Cider might be consumed more like beer, but the wine industry needs to come to terms with the fact that cider is not solely a threat to the beer category,” said Rabobank in its latest wine quarterly report.
“The impact might still be at the margin, but wine companies seriously need to consider what might lead their consumers astray as cider once again enters the big leagues in key markets.”
Craft beer and cider
While the UK and Ireland remain big cider consumers, North America, South Africa, Australia and New Zealand are seeing markets for the beverage expand. In the US, for example, cider sales in the grocery channel have tripled in volume since 2012 to reach 7.8m cases in 2014.
“Over the past decade, the cider category has gone a long way to discard its old-fashioned image and connect with a new wave of consumers,” continued Rabobank.
“Not unlike the rise of craft beer before it, the recent success of cider producers in tapping into a seemingly ready and growing global market has provided further evidence of rising segmentation within many developed alcoholic beverage markets.
“Suppliers are testing the boundaries of the cider category, with a surge in product innovation and marketing activity. As cider consumption takes root in new corners of the globe, suppliers of competing categories like wine are being encouraged to assess the current and future threat posed to their markets, as cider once again enters the big leagues of the alcoholic beverage market.”
How can wine companies step up their game?
Wine producers are far less aware of the threat from cider than their counterparts in beer, said Marc Soccio, senior analyst for beverages at Rabobank.
In addition, he notes a 'conspicuous absence' of major wine companies from cider activities.
"This is principally because the distribution capabilities required for mainstream cider products tend to overlap more with those of beer companies, as well as the fact that they have typically seen cider as a threat to beer," he said.
"There's an opportunity for wine companies to better understand the appeal of cider. The light, more casual and refreshing nature of cider also presents opportunities for wine companies to innovate with similar wine-based beverages. The surge in demand for Prosecco around the world proves consumers are looking for such options.
"Furthermore, akin to the strong craft trend we see in beer, there are opportunities for wine companies to use their expertise in building craft cider brands with strong provenance and artisanal attributes."
Male and female
In the UK, cider is popular with important demographic groups.
“The relatively mature UK market can help shed light on cider’s versatility and the potential threat it poses to competing categories. First and foremost, cider is equally popular among male and female drinkers – this equal appeal is unmatched by other major categories.”
Cider is the most preferred drink of 18-24 year-olds, said Soccio.
"Cider and wine consumption occasions overlap in more casual, social settings when food is less of a focus, which is especially a threat amongst younger female demographics who would tend to consume wine, especially white wine, in this setting."
Cider is now trendy, with different connotations and associations to before.
“Below the surface there have been some meaningful signs of premiumisation. As innovation has increased in the category, cider has shed old, negative stereotypes associated with underage drinking, and consumption has increased among more affluence and mature age demographics.
“Of particular note is the out-performance of higher value imported and speciality ciders, with products containing diverse fruit flavours and those supplied by craft and boutique producers now well-represented in the market. At the same time, we have witnessed market volume declines in private label offerings.”