Word: ciders
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Walk into a British pub and order a pint bottle of Magners Original - a premium cider brewed by Ireland's C&C Group - and be ready to cough up the princely sum of $7 to $8. That's as much or more than you'd pay for any other cider or beer on offer. But price be damned, say British drinkers, who are acquiring a growing thirst for ciders in general, and premium ones in particular. Cider consumption in Britain jumped 35% last year - an increase analysts have dubbed the Magners effect. That's a tribute to a brand that...
...Cider's a cool brew now, but it wasn't always thus. "It was thought of as a product consumed by vagrants on park benches," says Maurice Pratt, C&C chief executive. Cider was commonly sold in large plastic bottles at discount prices, bolstering its cheap image. In Ireland, C&C's cider is called Bulmers Original (it's the same thing as Magners, but drinks company Scottish & Newcastle owns the Bulmers brand outside Ireland). Struggling with stagnant sales in the 1990s, C&C decided dowdy Bulmers needed a makeover. It cut the alcohol content to 4.5% (about the same...
...Scotland in 2004 and 2005, hit London in 2005 and took on the rest of England in 2006. British rivals maintain that C&C is just riding a wave of popularity, not creating it. Sales of Strongbow, an S&N brand that boasts a 60% share of the U.K. cider market, have grown consistently for four years, the company says. Analyst O'Reilly disagrees, calculating that more than 70% of cider's recent growth is attributable to Magners. Certainly, rivals have dashed to bring out their own over-ice ciders: S&N dusted off its Bulmers Original brand, and Constellation...
...iced cider become so hot while British beer sales are tepid? Big ad budgets have helped. C&C spent $41 million in advertising in the U.K. last year to launch Magners, and it's upping that investment to $54 million this year. Magners ads reinforce the traditional heritage of cider and make effective use of classic rock songs like Donovan's Sunshine Superman. Premium ciders have also benefited by offering an appealing alternative to beer at a time when the public is fortuitously tiring of alcopops - sweet, soda-like drinks laced with alcohol. "People were fed up with things that...
There's always the danger that Magners will prove similarly vulnerable to the whims of fashion, but CEO Pratt insists it won't happen. "Alcopops are like boy bands: here today, gone tomorrow," he says. "But cider has existed for hundreds of years - we've simply added an enhancement." What's more, says Pratt, "Magners has been carefully positioned by us as anything but fashionable." Perhaps, but the pace of Magners' U.K. growth did slow slightly over the winter. C&C is confident demand will pick up again with the warmer weather, and it expects Magners' share of the total...