The Big Interview: NACM chief exec Fenella Tyler

Rarely does an opportunity for an audience with two of the cider industry’s most powerful people present itself. Yet, on one unseasonably warm spring day – perfect for frolicking through apple orchards – such a chance arose.

Although, it is not among the apples where Fenella Tyler and Helen Thomas agree to meet, but above a Belgravia, west London, pub following their National Association of Cider Makers (NACM) members’ meeting.

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Needless to say, talking about cider with the duo shines a positive light on the sector, yet they are both also refreshingly honest about the challenges it faces, as well as the potential difficulties likely to arise in the months ahead.

Facing huge changes

Thomas, who is managing director of Westons and the current chair of the NACM, has headed her family’s cider business since 1996, and experienced a great deal of change over the years. While Tyler’s cider career spanned more than three decades, before she became the NACM’s first full-time paid member of staff as the organisation’s chief executive in 2015.

“As with any organisation, we’re facing huge changes like the rest of the alcohol industry and we’ve had to evolve to react,” says Tyler, who chaired the NACM in 2007 while working in big roles for the likes of Heineken and what was formerly Scottish & Newcastle.

“We’ve been talking this morning [to our members] about how we can better reach more cider makers in the UK to communicate with them and help them become more involved in the wider industry,” the chief executive adds.

Like other alcohol segments, the cider category is facing shifting consumer appetites. Yet, cider is also a victim of forgetfulness from European policy makers, since many EU countries don’t have a thirst for cider like the UK.

In Westons’ recent Cider Report​, the UK was ranked the largest producer of cider in the world, with 800m litres made annually, equating to 12.18 litres of cider consumed per person each year. Yet, Ireland is the biggest consumer of cider, with 14.8 litres consumed by each person on average per year.

This was also a year of great cider news, as the UK market saw big growth,  with sales up 3.5% and volume up 2.2% to a value of £2.98bn.

“One of the things we have to remember, though, is that while the UK accounts for 39% of the world’s cider production, we’re a small part of the drinks industry in the UK, and so sometimes we’re forgotten by the Government when it comes to legislation,” says Tyler.

That said, the pair are quick to point out that UK leaders are more aware of the sector and its importance as an employer, as well as the positive impact it has on UK farming. The likes of the Department for Environment, Food & Rural Affairs understands cider’s role in places such as Herefordshire and other major cider-producing areas of the UK.

However, because many countries in the EU don’t have big cider industries, when it comes to making legislation, cider is often completely forgotten or is saddled with charges that are not fit for purpose, they agree.

Currently, cider makers pay no tax if their annual production is 70hl or less, but beyond that, all producers pay a rate of £40.38 per hectolitre. Ciders made with fruit juices, botanicals or hops are classified as ‘made-wines’ and taxed at a rate of £88.93 per hectolitre at an ABV of 4% or less, and £122.30 at an ABV of between 4% and 5.5%. Conversely, duty paid per hectolitre of beer produced is £19.08 (general beer duty). The rate of duty for high-strength beers (exceeding 7.5% ABV) pay an additional £5.69 per hectolitre, while lower strength beers (exceeding 1.2% ABV but not exceeding 2.8% ABV) pay £8.42.

“At a Government level in the EU, cider is disproportionately recognised,” explains Tyler. “We’re a little away from solving the 70hl tax bracket on cider, but we’ve been fighting this for years because it’s a technical anomaly.

“We’ve been fighting to get the right wording into EU regulations, but as with all of these things, they get tied up in red tape and we’re trying to untangle them.”

The Brexit effect

With Brexit on the horizon, however, do Thomas and Tyler believe the UK cider market will come out better? It is a catch-22, yes; they believe some of the unfair EU regulations surrounding cider will eventually be broken down, as the NACM, which represents 80% of the UK cider market, will only need to fight for change with one government. However, leaving the EU also raises many other questions.

“Obviously, Brexit poses a threat to UK cider,” says Thomas. “We need to know there’s going to be continuity, but also cider makers in the UK import a lot from the EU, such as glass bottles and equipment, and we need to know that tariffs will be fair to allow us to compete with other countries.

“It’s a big issue because this hugely changing [Brexit] agenda could affect the apple growers and the cider makers because we’re not sure how it’s going to impact on how we do our jobs.”

The pair, however, do not envisage any of the potential threats to cider makers affecting pubs and their customers, as Thomas says: “I think it’s all going to affect cider makers more, as there is more complexity around how we do our business.

“What is likely to have more of an impact on pubs is if cider makers don’t have enough fruit because of a failed harvest due to a frost or disease.”

A market in rude health

This, however, is not currently the case and the cider market is in rude health, as seen by the raft of new products coming onto the market from producers such as Westons, Thatchers and large makers like Heineken.

“Operators are already seeing more new products on the market and so they’ve got a better range to choose from,” says Thomas, who explains that this heightened level of new product development has the potential to bring more drinkers into the category and grow sales further.

A growing market also provides stability to what’s available on the bar, according to Tyler, who says: “Being in growth means we will see more products on the market, as well as consumers being able to have the ciders they know and love supplied for longer.”

With this rediscovered growth in cider, can the pair envisage a category that gives beer a real run for its money in terms of volume sales? Tyler can’t comprehend a day when cider will outsell the likes of lager, but she can foresee continued growth for the category.

“You can safely say we will be successful in 10 years and we will be doing wonderfully,” she adds.

This is where the NACM’s strength comes in – it is an organisation that deciphers complex legislation and the technical jargon that strangles the alcohol industry. The way Tyler and Thomas talk about how cider is discussed by the policy-making bigwigs conjures images of a category that would be
lost if a bold organisation such as theirs did not exist.

“Cider companies are very together behind the scenes, but competitive in the marketplace,” explains Thomas. “We’re a small industry, but we have to work together to get on and develop this British success story.”

More strength has been brought to the organisation through bigger companies, such as Heineken, joining the discussion, Thomas agrees. “I think if you have different people sitting around the table, then we will get new ideas.”

The spending power provided by large cider-owning brewers has also had a positive impact on the sector because their resources lead to better promotion, helping to spread the message about cider further.

“We hope they continue to advertise cider and put more money behind their brands, because it’s good for everyone,” continues Thomas. “It’s like when Magners came into the UK market, they put so much money behind the brand and more people were drinking cider.”

Innovation beyond apple

But it is more than a decade since Magners brought its Irish cider, served over ice, to the UK – back in 2005. The sector has moved on dramatically since then. What is coming to the fore now is innovation beyond the apple, which is expected to provide a considerable boost to sales in the coming years.