Aspall Cyder could be the booze sector’s next high-profile buyout. This week, national news reports claimed Carling owner Molson Coors is eyeing the premium cider brand for acquisition before the end of 2017. So why now? What makes Aspall an attractive proposition? And what can this tell us about the way the cider market is going?
The target
Aspall looks to be in significant growth. The brand has spent the past five years cementing a strong position in retail, which has included a significant investment into its production capabilities of late. Following a rebrand across its portfolio in 2015, it installed a new apple press at its Suffolk base with an eye to ramping up production by an extra three million litres of juice per year by 2018. This facility alone makes it a tempting target for a takeover - any new owner would be able to hit the ground running with the brand (rather than having to invest in scaling up its capabilities, as was the case for Camden Town Brewery, for which AB InBev built a new £30m brewery following its acquisition in 2015).
Consumers seem to be buying into it. More recently, Aspall has been pushing to win extra space on supermarket shelves, having launched a new canned version of its 4.5% cider into Waitrose in May. There are signs its work is paying off: supermarket value sales of its flagship Suffolk Cyder were up almost a third (32.7%) over the past year to £8.1m, on volumes up 31.2% [IRI 52 w/e 25 March 2017].
Aspall has also worked hard to ensure its place at the posh end of the market. Its latest NPD, a limited-edition 11% abv sparkling cider called Aspall 1728, launched in June aimed at ‘super-premium’ retailers. Meanwhile, sales of its pricier Premier Cru have risen from £4.2m to £6.9m over the past five years [Nielsen 52 w/e 12 August 2017]. These numbers will no doubt impress potential buyers.
The buyer
Enter Molson Coors, the brewing behemoth behind Carling, Cobra and Coors Light. Despite owning the UK rights to Rekorderlig and producing Carling Cider, its sole apple cider competing in the premium sphere is Sharp’s Orchard, which is only available on draught in the on-trade. “There is a big gap in their portfolio”, says retail consultant John Butler. “Whereas everybody else has managed to jump in and do something in that category.”
Aspall, too, enjoys a strong on-trade presence, he notes. “So they wouldn’t just be buying a retail brand - they’d be buying on-trade distribution. It’s a double whammy for them, with a brand that everyone knows.”
Interestingly enough, Molson Coors has abstained from swallowing up smaller brewers over past years, while others have splashed out such as AB InBev (with Camden) and Heineken (with Lagunitas). Arguably Molson Coors’ purchase of Cornwall brewery Sharp’s in 2011 was a bellwether for later buyouts, but Sharp’s has always erred on the side of tradition rather than ‘craft’ despite regularly releasing up-to-date, canned modern beers. So with fierce competitors in the craft arena already in place along Britain’s booze aisles, perhaps Molson Coors sees cider as its joker in the pack.
The market
Like the craft beer market, cider has seen serious consolidation over recent years. AB InBev struck a deal with cider giant C&C last autumn to distribute its cider portfolio, which includes Magners, Chaplin & Cork’s, Blackthorn and K in England, Wales, the Isle of Man and the Channel Islands. C&C snapped up the trendy Orchard Pig in April, having worked with the brand over the past five years, with the company setting out plans to grow its craft and premium portfolio by 5% “over the medium term”. Meanwhile, Frosty Jack’s owner Aston Manor is on the market, with national news reports claiming it could eventually go for over £100m.
Shore Capital analyst Phil Carroll believes cider and craft are attracting large buyers for essentially the same reasons. “I see cider almost as an extension of craft. It has many of the same characteristics, in the sense that something like Aspall has its own story and authenticity, something Molson Coors hasn’t got. It has plenty of heritage and it’s family-owned.”
However, unlike in the world of craft beer, it is harder to find smaller companies waiting to be snapped up. If Molson Coors does indeed take control of Aspall by the end of 2017, as Sky News has predicted, it will leave the number of independent cider brands in the UK significantly depleted.
Nothing is definite yet. Neither Aspall nor Molson Coors have confirmed reports of the upcoming sale, both stating they would not respond to “industry speculation”. Other potential buyers are said to be circling, and it is yet unclear what kind of stake Aspall could be willing to give up. But the rumours indicate the potential promise in cider following the craft beer boom. As a heritage, premium brand, Aspall is well placed to take its pick of suitors - and could well become the apple of Molson Coors’ eye.
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