Struggle brewing for control of lucrative SA cider market

21 April 2019 - 00:21 By TJ STRYDOM


In a side-show - or cider-show - to its global brewing bout with AB Inbev, Heineken is also eyeing a larger share of a market dominated by Distell, the maker of Hunter's and Savanna.
SA is one of the world's biggest cider markets. Bigger even than the US, SA's appetite for the apple-based alcoholic beverage is second only to the UK.
That is why Heineken is pushing in with Strongbow - the world's biggest cider brand.
"Heineken SA sees a massive opportunity in this largely uncontested space, which has been owned by a single beverage company for more than 20 years," said Lance Dodgen, the company's marketing manager for international brands and cider.
Strongbow's performance in SA was one of Heineken's global highlights last year, the company said in its annual report.
And Heineken's Dodgen expects to see growth in the cider category because the drink's sweeter taste appeals to the South African consumer palate.
But it faces a strong incumbent.
Apart from a portfolio of wines and the globally recognisable Amarula, Distell is the world's second-largest cider producer.
Though based in Stellenbosch, the company produces more than 80% of its cider at its Springs plant.
And it has the capacity to ramp up production should it see the need. The cidery is running at half of its capacity but will increase output as the company moves production to more efficient plants.
Distell's Springs plant was designed not so much for pushing out massive volumes, but to be "flexible" and to respond quickly to changes in the market, said its general manager Anand Gounden.
Distell views cider as part of a larger portfolio of fruit-based alcoholic drinks. And though some of the brands go through ups and downs, it sees growing demand in the category in SA, said CEO Richard Rushton. Other African markets, such as Kenya, Angola and Nigeria are also lucrative.
In SA, Distell and Heineken will face off in both dry and sweet versions of cider.
Heineken's Dodgen also sees "the extended daylight drinking occasion" becoming more prevalent, which refers to drinking a cold one while the sun is still out.
AB Inbev's subsidiary SAB does not have any ciders in its portfolio in SA. It used to have a brand called Sarita, but discontinued it about seven years ago.
Danish brewer Carlsberg, which brews Somersby cider mainly for the British market, did not respond to a request about its plans for SA.

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