Talking Trade

“There’s new ground to be broken in cider”

Seamus O'Hara, Chair of Drinks Ireland|Cider, talks to Pat Nolan about cider, the Budget and the future.
"The cider industry might be in decline but this is about bringing new dynamic to cider through new ideas such as different varieties of cider, fruited ciders or barrel-aged ciders."

“The cider industry might be in decline but this is about bringing new dynamic to cider through new ideas such as different varieties of cider, fruited ciders or barrel-aged ciders.”

Perhaps better-known for his craft beers, Seamus O’Hara, the Chairman of Drinks Ireland|Cider, is no slouch when it comes to crafting Irish ciders either.

But compared to brewing beer, cider can be a lot more labour-intensive and demanding.

“As a craft brewery we found ourselves dealing with customers interested not just in our beer options but our cider options too,” he explains, “Plus we’d noticed a bit of demand for cider in the export markets.

“A lot of the reasons why we’re in craft beer can be applied to cider – the lack of diversity in the market and the potential for innovation. It’s a great opportunity, the craft of making cider from local apple orchards. What had been on the market was even more narrow than beer.

“Our cider is made from apples from our own orchard and supplemented with apples from other local farmers. Cider offers so much potential and opportunity for diversification and innovation. When you look at France or Spain there are so many interesting things being done with cider. We decided to get going on it following consumer pull – and our own interest in it!”

For small producers, cider-making is a passion. It doesn’t make money at the end of the day, he believes.

50% excise relief

Alas 2020 wasn’t a good year for cider consumption with an 11.3% fall in cider’s market value to just under €520 million, reducing its share of the overall alcohol market to just 6.9% last year from 7.4% in 2019.

So this year’s Budget introduction of an excise relief programme of up to 50% for independent small producers of cider must have been quite a fillip for his members.

He readily agrees.

“This excise relief will allow more investment in resources for cider-making in a similar way to how craft brewing benefitted and developed, so it’s a shot in the arm for small cider-makers as they will have time and space to focus on it,” he says, “It allows more resources to be put into developing ciders with benefits to the end-consumer and to the on-trade – it’s another string to their bow in terms of what they can sell in their outlet.”

But Daniel Emerson of Cider Ireland took a less sanguine view of the government’s cider excise largesse, criticising the delay in implementation of the relief by Government and pointing out that the Budget announcement still means cider producers must needlessly wait yet another year for the excise duty reduction to take effect.

Seamus wouldn’t disagree with this sentiment but nevertheless points out, “We welcome the announcement as we’ve been waiting a long time for it.

“Craft brewers got this in 2003 but it needed some changes at EU level which have now been made. It’s frustrating to have to wait for another year but when you step back from it it’s a really welcome development and gives us certainty as to what’s coming down the tracks.”

He shares Daniel Emerson’s frustration, of course, but he also recognises that there’s work to be done by the Department to implement this because it also extends to other fermented beverages and it’s probably legislation that hasn’t been looked at in a long time.

“The excise break will allow capital investment and product development and innovation” he says, “building up teams and marketing ability and getting our story out there because the story of Irish cider hasn’t been fully told yet.”

Clearly, cider’s a smaller sector than brewing.

There are around 11 cider producers in Ireland at present and Seamus can see expansion for the more ambitious producers in the short-term as a result of the Budget announcement.

And he also sees some potential for export too as a result of the excise break, “So that’s likely to attract new people to the sector in the longer term which brings different expectations and approaches to the cider market.”

Restoring cider’s dynamic

Domestically, per capita consumption of cider has fallen by 23% since 2011 – and it fell by a further 11.4% to just 0.7 Litres last year compared to beer’s hearty 63.7 Litres.

Just how much help does cider now require?

“In the short-term, there has been Covid, but we’ve also seen year-on-year a gradual reduction in alcohol consumption across the board and cider is part of that,” he explains, “Moving forward, the cider industry might be in decline but this is about bringing a new dynamic to cider through new ideas such as different varieties of cider, fruited ciders or barrel-aged ciders, for example, which allow cider to mature over time and also develop flavours from the wood. This all brings new energy to the market.”

Return to the on-trade

Off-trade cider sales increased 27% to €147 million in the year to May the 23rd 2021 according to NielsenIQ. In the Winter months to come it will be imperative to win back and/or win over more of the on-trade, currently at just 16% of total cider consumption from its usual 45%.

“The off-trade has grown due to the pandemic,” he agrees, but points out, “When bars fully reopen more cider consumption will come back to the on-trade. If you go to your typical off-licence right now you can access a range of ciders with different tastes and appeals and we need to get to the stage where that’s also available in bars.

“Initially, the choice may be between bottled and canned for the on-trade if cider-producers are unable to acquire a draft line but we expect that to change over time.”

Seamus would like to see the day when every pub has a cider menu “… and that’s a mind-shift from where we are today where there’s just one cider tap and limited range in bottle. If you have a wine list you should have a cider list!” he believes.

Lockdown returns

For now, he’s fairly stoic about the constantly changing goalposts and last-minute announcements from Government that required suppliers to become a ‘push-me-pull-you to the trade when it came to supplying and taking back kegs of product.

“It was just one of those things we had to do as part of our service to on-trade,” he remembers, “The main challenge was planning supply at short notice and of course it was frustrating to deliver and have to go back and pick up kegs that weren’t needed due to Lockdown.”

While cider suppliers got no government supports specifically for the keg uplifts from pubs, there were some general supports put in place for businesses affected by Lockdown.

The 50% excise reduction in the recent Budget only impacts domestic sales. Nevertheless, it helps boost resources that can now be laid aside to export, he points out.

One wonders where Irish cider can go from here in terms of market opportunities.

“As a small producer it’s all about Irish apples and fresh apple juice right now, harvesting them, pressing them and fermenting the juice for 2022, so it’s quite seasonal in terms of production. It’s about storing and blending for packaging as demand comes in over the course of the next year.

“Most craft producers will use 100% freshly-pressed apple juice ‘though some will use concentrate to back-sweeten their ciders.

“Obviously in a market full of ciders there will be cheaper and more expensive options which will reflect quality and provenance and the consumer will ultimately decide where the market rests.

“There’s a lot of disruption in the market right now in both the on- and off-trades, so when you’re working in a market that’s been quite static for a long time this can lead to new opportunities. The timing of the excise break is really quite important in terms of the extra financial support whether it’s for capital spend or beefing up your business generally.”

He rejects the assertion that the Irish cider market is relatively small for any significant expansion of the cider offering.

“I believe there’s room for more variants on the Irish market, but exporting is really important too. Again another benefit of the excise support is making us stronger financially and therefore more able to go into export markets with a strong domestic foundation. Yes, it’s a relatively small market domestically, but there’s new ground to be broken,” he insists.

Hopefully, breaking that new ground won’t encroach onto that of craft beer for his own Carlow Brewing Company.

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