Magners cider producer C&C Group reports falling UK volumes
Volumes of Magners and Gaymers in the UK fell 13.9% and 16.4% respectively in the quarter. Revenue from UK ciders declined 15.9% over the period. Net revenue declined 0.8% to €476.9m
The GB cider category experienced its first volume decline in almost a decade, falling by 2% as poor weather depressed home consumption in the key summer months. Despite the heavy promotion of the category by retailers and brand owners, off-trade volume declined 4% in the year to March, in line with beer.
The company said there were positives, however, in the value growth of cider in the off-trade and in the on-trade category trend. Value grew by 2% in the off-trade, outstripping LAD by over 2ppts and illustrating the continued premiumisation of the category from a retailer/consumer perspective.
In the on-trade, cider volume growth remained in positive territory, up 1% year-on-year and 5ppts ahead of LAD. Packaged variants in the fridge enjoyed a good year with flavoured ciders delivering much of the growth at the expense of standard draught.
It said that the health of the category was further validated by a number of new entrants during the course of the year. There was also a significant level of investment behind brand launches and range extensions and there is no doubt that competition in the space intensified as a consequence.
The group said there was little improvement in the UK cider market in the second half, following a challenging first six months. The rate of volume decline improved from 18.6% at the end of August to 15.0% for the full year but the price/mix effect still left net revenues down 20.2%.
Operating profit declined by 15.6% to €30.9m, while operating margin improved by 1.2ppts, which C&C said reflected the decision taken earlier in the year to hold back on marketing investment given the dynamics of the trading environment for the category.
Stephen Glancey, C&C group chief executive, said: “Our results are in line with stated guidance and while it has not been an easy year for our core cider brands, with poor weather and increased competition, particularly in the UK, the second half did bring some trading stability in Ireland. We have had an excellent contribution from the Tennent’s brand both in domestic and international markets providing some balance to the increased competition within UK cider.
“Our International business delivered strong growth with volumes increasing by over 55% in the year. In our domestic markets we continue to develop multi-beverage capability investing in customers and providing support through a trade lending model, advancing €16.7m in the year. The creation of the Shepton Mallet Cider Mill trading division is a positive step towards capitalising on the latent potential of the Gaymers portfolio and will be an important feature in the next phase of cider growth."
