New cider house rules

She’s apples: Cider sales have risen by more than one-third by volume in the past year.

A summer Sunday afternoon drinking session on Bondi Beach’s “grassy knoll” got brothers Rich and Sam Coombes thinking about creating a craft cider brand. A mate was enjoying a longneck of Coopers Pale Ale beer.

“We thought ‘where’s the Coopers equivalent of cider?’ ” Rich says. “A brand you can connect and engage with [and] something locally made rather than imported.”

That was four years ago. It took another 2½ years for Rich to leave his investment banking job at Investec and Sam to leave a marketing role at MTV Australia before the brothers established Batlow Brewing Company, in a joint venture with Batlow Apples.

The cider was released in September this year but it was not without a challenging pre-production period. Over 18 months the duo threw out two batches of cider before getting their desired flavour.

The Batlow name is synonymous with apples, so teaming up with the almost 100-year-old fruit grower was a business brainwave. “Batlow is the most recognised apple brand in the country,” Rich Coombes says, adding that consumer research shows that people are more familiar with the Batlow brand than with the pink lady apple variety.

The brothers’ knowledge of cider came from visiting their father while he was living in England in the early 2000s. “It wasn’t until we went to the UK that we saw cider didn’t have to be a sugary sweet alcopop,” Rich says. “It was a nice alternative to beer.”

The Coombes duo are starting slowly, identifying hip bars and independent retailers where they will distribute the product. “Our strategy is to cherry-pick what we classify as best in class,” Rich says. Currently the range is available only in Sydney venues but Rich says the brand will need to get into Melbourne and Brisbane before he can comfortably pay the bills.

Many of the new boutique and premium cider lines on the market such as Pipsqueak (owned by Little Creatures) and Three Oaks Cider (owned by Vok Beverages) are shy about discussing financial details – it’s not in keeping with the nonchalant, hipster image they court.

Drinkworks shows that there’s money in the golden apple booze. The premium alcohol distributor (with beer brands in its portfolio such as Tiger, Bintang and Tui) began distributing the New Zealand brand Monteith’s crushed apple and crushed pear ciders in early 2010 and turned over about $7 million from the brand in 2010-11.

Drinkworks general manager Judd Michel says this exceeded the company’s expectations by about 15 per cent and he expects the company’s cider revenue to grow by another 20 per cent in 2011-12.

At the big end of town, Carlton United Brewers (as part of Foster’s Group) turned over $110 million from cider sales in 2010-11.

“We’re really proud of our cider portfolio, which includes three of the top five brands in Australia,” CUB marketing manager for cider Clive Coleman says. CUB has market leader Strongbow, Tasmanian cider Mercury (No. 2) and English brand Bulmers (No. 4), he says. Foster’s also owns Matilda Bay Brewing Company, which took top honours at the Australian Cider Awards in September for its Dirty Granny range of cider.

Monteith’s and Dirty Granny are seen as premium offerings. The 2011 Cider Report by market research company Nielsen shows that this part of the market is driving consumer pick-up. In the past year, cider sales in Australia have increased by just over one-third (34.7 per cent) in value terms but just over one-fifth (23.2 per cent) in volume terms.

Drinkworks’ Michel says discounting hasn’t been a focus. “In the premium cider segment where Monteith’s operates, retailers and consumers appreciate that the quality of the product is superior and hence are prepared to pay a slight premium for it,” he says.

Nielsen says 45 new cider brands have been introduced in the past two years. To stand out, Michel is focusing on quality and innovation for Monteith’s, including the introduction of a “simply delicious” crushed apple and pear hybrid cider.

The Coombes brothers have consumer segments in their sights: namely country-gastro-pub-visiting foodies and skinny-jean-wearing, alternative-rock-loving festival-goers. Batlow was the official cider of new music festival Harvest in November.

BRW

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