Who is flirting with our consumers? And Why?
Earlier this year I came across Cider is Wine, a not-for-profit alliance of cider producers that’s hoping to create a new and higher standard category with similar production values to wine. They want to elevate the profile of premium cider by adopting wine’s practices.
Their question: “Is there any reason why cider should not be seen as, purchased as, consumed as, the finest wine propositions found on retail shelves, on restaurant menus and behind every quality bar?” made me pause and reflect for a moment.
What does cider see in wine that makes them want to be like wine? I looked at what is happening in the cider and craft beer worlds and here’s what I found:
According to the Brewers Association’s latest annual growth report, while the total beer market shrank by 1% in the US, craft beer volume rose by 4%, representing 13.2% of the entire US beer market in 2018. With 7,436 craft brewers in the US and growing volumes, this is a category set become just as fragmented and saturated as the wine industry.
Based on The European Cider and Fruit Wine Association information, 55% of the global production of cider is consumed in Europe, while only 10.9% in North America. Fun fact for wine: cider drinkers are predominantly not found in big wine-drinking countries; therefore, there is an excellent opportunity for our industries to share some consumer knowledge.
They communicate like us:
Cider and craft beer professionals are discussing flavours, tastes, tannins, fermentation, yeasts and terroir, and experimenting with different fermentation methods. Their professional language is like wine’s language, and yet, we are not sharing knowledge and experiences.
During the Craft Beer Rising 2019 event this February, craft beer professionals talked about the “Vinification of Beer” pointing out that the danger with this is that it might put off not only beer drinkers but also new drinkers who are not attracted by the language typical to wine.
Although this is not news for the wine industry, the cider and craft beer professionals are aware of the roadblocks this might create in attracting new consumers, and while in their professional circles they use similar language to ours, they also know not to use it with consumers.
Their future outlook:
During the Future Trends session at the same event, a panel composed of cider and craft beer producers discussed their plan to attract new consumers. Their concerns are similar to ours in the wine industry as we are looking at, and analyzing, the same consumer profiles. Beyond market fragmentation, distribution, and shelf-space wars, attracting the younger consumer, maintaining their interest, and keeping them loyal are also among their primary concerns.
One significant trend is low alcohol products, as they see this new trend as a significant market growth opportunity. Getting the right balance between flavour and the low alcohol content is a challenge that is as difficult for them as it is in the wine industry. As one craft beer producer highlighted, to bring new consumers into their category, the most challenging but also exciting innovation will be to find the best flavour in low alcohol craft beer.
One premium cider producer on the panel said their extra volumes are coming from their newly launched low-alcohol cider (0.5% ABV.). She said it is not cannibalizing their other products; it has added sales volumes and helped to flatten seasonality. They believe these low alcohol products will be the gateway to younger consumers who are experimenting with alcoholic beverages for the first time.
Why we should listen:
We share consumers.
We are in the same broader alcohol beverage industry, and we are all in it to stay. We are all working to get new consumers into our categories but, cider and craft beer producers have an advantage because they can launch and test their products faster than us. As if this advantage wasn’t enough to make us worry, they are also looking at wooing wine consumers into their categories.
Our strategic differences.
There is a clear difference in strategies adopted by the different alcohol beverage categories. On the one hand, the cider and craft beer producers take a market-driven approach. They listen to market demands and make products that cater to the needs of their current and new consumers’ lifestyles and desires. On the other hand, the wine industry adopts a market-driving strategy assuming that wine drinkers don’t know what they want, and they need to be educated about what they should be drinking. The problem is that such exclusivity and approach won’t work with new drinkers who will, instead, turn more and more to drink categories that are friendlier and where they feel welcomed and understood.
Wine industry heads up! As they say, keep your friends close, and your enemies even closer and be aware that the cider and craft beer industries are not only using our language, learning from our practices and experiences, but are also flirting with our consumers.