LAD on-trade volumes decline 0.5%

The total LAD market here grew 0.7% in volume in 2015 although the on-trade suffered a decline of 0.5% compared to the off-trade’s growth of 2.4% according to C&C Group in its annual results to 29th February 2016, published today.

 

 

But despite this growth, off-trade values declined 0.5% as a result of a price war by the mainstream lager brands seeking to gain share of throat.

The relevance of innovation to the LAD market has been made even more clear now according to C&C.

“The emergence of new entrants across the LAD market and the growth of craft brands suggests a consumer now more willing to experiment and try something different,” states the report, “There is no doubt that innovation, authenticity and heritage are more relevant to LAD now than they were two or three years ago, although craft brands appear to command more share of media voice and presence than volume at this stage.”

C&C brand volumes fell 11.0% on the island of Ireland with declines in both the on- and off-trade channels, reports the company which blamed a poor Summer coupled with increased competition in the market.

As a result of these factors cider net revenues fell by 16.0% on the island of Ireland while volumes declined 13.3% resulting in Bulmers’s market share slipping from 8.8% to 7.9%.

However C&C’s beer volumes showed more promise during the year. Sales of Corona grew by over 30% here in its first year under the distribution stewardship of C&C, to reach 80,000 hectolitres.

Irish Operating Profits dropped 17.4% to €49 million from €59.3 million the previous year, while Irish revenues at the company fell 12.6% to €358.1 million from €409.7 million.

Overall, the company reported an Operating Profit of €103.2 million, down 10.3% on net revenue of €662.6 million, itself down 3.1% from €683.9 million the previous year.

However exports indicate a more sanguine picture, with branded volume growth in “double-digits in each of our main export regions in FY2016” states the company adding that, “The development of the cider category is now attracting the interest of brewers and drinks companies alike”.

C&C Group Chief Executive Stephen Glancey commented, “Cider is now penetrating deeper into international markets as consumers are attracted to the sweet natural taste. Magners is the original premium apple cider and we are pleased to report growth not only in the UK but across our export business, where cider grew by 15% over the past 12 months and with momentum sustaining into the current year”.

Organic growth and increased distribution capabilities are set to grow export volume and earnings still further FY2017 and beyond, states C&C which increased its marketing investment by 5.5% to €34.6 million.