When Magners owner C&C Group paid £45m in 2009 for the Gaymers cider brand and its stablemates Olde English and Blackthorn, it surely had a vision to grow the business.
At the time of the acquisition, from Constellation Brands, analysts warned that C&C might be overreaching itself. One theory was that the purchase was made to protect Magners' premium positioning in a category where its sales were losing fizz.
Fast-forward to 2011, and Magners is in clover, with volumes up 14.9% and value sales up 11.5% for the three months to 31 May. However, the news is not so good for Gaymers.
As a multi-cider-brand company, C&C can't cite any downward trend for Gaymers' woes. Instead, it blames 'reduced activity at the lower-margin end of the portfolio' for a sales slide of 15% and volume hit of 22.2%.
While the high-profile 'Method in the Magners' ads continue to buoy the premium brand, Gaymers' marketing is centred on its presence at festivals - but it is clearly failing to make its way into revellers' weekly shopping baskets.
In C&C's results, it made clear its intention to invest further in the Magners brand. Does this mean that Gaymers will be left on second fiddle?
We asked former Molson Coors director of commercial innovation David Preston, now director of brand agency Elephants Can't Jump, and Andrew McGuinness, partner at Beattie McGuinness Bungay, which works on the Carling and Diageo accounts.
DAVID PRESTON, DIRECTOR AND HEAD OF RESEARCH, ELEPHANTS CAN'T JUMP
Retailers have increased their interest in cider in the past five years, driven by greater margin potential than other alcoholic long drinks, as cider is subject to significantly less tax.
Consumer interest has increased too, built on the successful launch of Magners and its 'over ice' ritual. So there is brand and range proliferation and the retail space dedicated to cider increasing. It's a great opportunity.
Yet the C&C Group has announced that Gaymers' volumes have declined by 22%, not that long after the brand was repackaged and relaunched.
The root of the problem is the lack of originality in Gaymers Original.
It has no distinct market position. No differentiation in design, flavour, 'serve-ritual'
or communication. No clear role in the category's pricing ladder. No attempt at a deeper emotional connection. No reason to believe in the product.
Why would a consumer buy the brand? Yet, at its root, there is plenty of distinctiveness, such as its authenticity, and its Norfolk origins.
REMEDY
- The brand should spend time identifying a clear cause. What is the common denominator that drives Gaymers and will set it apart from Magners, Bulmers, Westons et al?
- Gaymers has to be clear on what the brand will do for the consumer, or it will remain a 'me-too' brand and have to continue to resort to lower pricing.
- Recognise that in alcohol, your brand can outperform heavier spending brands if it can be distinctive at the point of purchase. Gaymers needs a distinctive, bottle, glass and serve-ritual that consumers want to buy into. C&C must be clear on why bar staff should recommend the brand.
ANDREW MCGUINNESS, PARTNER, BEATTIE MCGUINNESS BUNGAY
Nestled in a category that's enjoying rude health, and with a 241-year heritage and a provenance story about originating in the east of England rather than the cider-filled valleys of the west, Gaymers seems to have a lot going for it.
So while brands like Magners enjoy double-digit growth, why does Gaymers languish in double-digit decline?
There appear to be three key reasons.
First, and perhaps most significant, is C&C's apparent decision to focus its resources on Magners. With limited money to invest and the spectre of an all-dominating Strongbow backed by the might of Heineken, this is entirely understandable.
The second is that rather than behaving as a relatively small challenger brand, Gaymers has conformed to many of the category's conventions.
It does this, for example, in language ('cold-filtered') and in promotion (via music festivals including Glastonbury, Reading and Leeds). These are environments where it's difficult not to get utterly swamped.
The third is that C&C has failed to present the brand's history and artisan credentials in an evocative and relevant way. Gaymers has a depth of story that brands in many sectors would die for, but it's not coming through in the way the brand is presented.
REMEDY
- Clarify the mid-term role in the C&C portfolio. Gaymers' heritage is too good to let it fade.
- Identify a unique Gaymers 'voice'. The brand has great depth; bring it to life, particularly in packaging.
- Be prepared to break the rules. There's space for an old(e) school, artisan cider, particularly within a portfolio that includes Magners.