just On Call - US cider still taking bite out of beer - C&C Group
C&C Group released its first-half results today
C&C Group's international MD has said the booming US cider category is on course to continue taking share from beer.
Joris Brams said that on current growth trends cider will account for 1% of the US Long Alcoholic Drinks (LAD) category by the end of this year. That is up from a 0.3% share at the end of last year, Brams said.
The LAD category includes beer, cider and alcoholic RTDs but is dominated by beer in the US.
“We usually see that growth on a ten-year basis and it has happened in one year,” Brams told journalists on a conference call today (30 October).
Brams, who oversees C&C brands including Magners and Gaymers outside of the UK and Ireland, said the group is “optimistic” about the US cider market despite Magners volumes dropping by 28% in first-half results, released today.
“The 1% share represents about 15-18m cases,” he said. “So (cider) is a rapidly growing category with a lot of newcomers and a lot of people building great brands.”
Brams blamed the Magners volumes slide on a new distribution arrangement in the US that sees all C&C brands distributed from one location. Previously, Magners was ordered by clients on an eight-week basis and shipped from Ireland. Following C&C's purchase of the Vermont Hard Cider Company last December, it will be stockpiled alongside other C&C brands at Vermont's warehouses and available for next-day delivery.
“That has had an enormous impact on the stock that is no longer on the water, but directly on the Vermont truck,” Brams said. “But we've now got access to growth capacity in all of the states and channels in the second half, so (the volumes declines) will level out.”
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