Situation Analysis for

Somersby Cider

Alexander Sinclair
s5095286

1003MKT – Introduction to Marketing

Tutor:
Trimester 1, 2018

Word Count: 2060

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Table of Contents

Table of Contents.......................................................................................................................... 2
Introduction and Company Background .......................................................................................... 3
Introduction .............................................................................................................................. 3
Company Background ................................................................................................................ 3
Situation Analysis .......................................................................................................................... 4
Market Analysis ......................................................................................................................... 4
Macro Environment Analysis ....................................................................................................... 4
Political Analysis ..................................................................................................................... 4
Economic Analysis .................................................................................................................. 4
Social Analysis........................................................................................................................ 5
Legal Analysis ........................................................................................................................ 5
Micro Environment Analysis ........................................................................................................ 5
Company Analysis .................................................................................................................. 5
Competitor Analysis ................................................................................................................ 6
Competitive market Summary ................................................................................................. 7
Consumer Analysis ................................................................................................................. 7
SWOT Analysis ....................................................................................................................... 8
Recommendations/conclusion ........................................................................................................ 8
Reference List ............................................................................................................................... 9

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Introduction and Company Background

Introduction
The purpose of this marketing plan is to reposition a brand/ product in the Australian Market.
The aim is to find ways to solve the problems that the chosen company is having with
marketing and present a strong marketing plan to help boost the brand. The company that will
be the focus of the analysis is Somersby Cider. While Somersby’s marketing is up there with
the best in the cider market there is still a lot of room for potential growth with a boost to their
marketing. Somersby have failed to capitalise on many opportunities that other brands in the
alcoholic beverage industry have been using to boost sales for years. An area that Somersby
could improve in is year-round sales, cider has peeks in Summer (January-March) with nearly
3 million (2,880,000) people having consumed a cider in a 4-week span and dips in winter
(April-June) with just over 2 million (2,220,000) people having a cider in the 4-week period
(Roy Morgan , 2016). These statistics show that there is a clear improvement that can be
made during the winter months and this is the problem that this analysis aims to solve.

Company Background
Somersby is a market leader in the cider industry around the world and leads the Australian
cider market with over 700,000 Australian’s consuming some sort of Somersby beverage on
average over a four-week period (Roy Morgan , 2016). They have a wide selection of ciders
to choose from, but the most popular options are apple, pear and blackcurrant ciders.
Somersby is a part of the Carlsberg company which was founded in 1847 by J.C. Jacobsen
just outside Copenhagen in Denmark. The Somersby brand was created by Carlsberg in a
large period of growth between 1968 and the 1990’s, Somersby like Carlsberg and many other
brands that are part of the Carlsberg group was founded in Denmark and has now spread to
over 150 countries (Carlsberg Breweries, 2018). The rights to distribution of Somersby cider
in Australia was purchased by Asahi Premium Beverages in 2012 and burst onto the market
in 2013, by 2014 Somersby had already established itself as the second largest cider brand
in Australia and since then has moved into first place and continues to grow at an astounding
rate.

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Situation Analysis
Market Analysis
The cider market in Australia has been flourishing in Australia despite the decline in total
alcohol consumption throughout the country, despite a 14% decline in total alcohol
consumed there has been an 11.4% growth in the Australian cider industry between 2011
and 2016, which led to the Australian cider industry turning over more than $300 million
(309.7 million) in revenue in 2016 (Stainkamph, 2016). This positive trend has continued
with IBISWorld reporting that the Australian cider industry now has an annual revenue of
$361 million (as of February 2018) which means that the annual growth between 2013 and
2018 is 8.4%. IBISWorld also predicted that by 2021 the industry will be worth over $400
million. The Australian alcoholic beverage industry is a large part of the Australian economy,
it inserts more than $19.7 billion into the Australian economy each year, this includes a huge
$5.9 billion in tax. The Australian alcohol industry also provides over 400,000 jobs for
Australian people, this includes jobs at liquor stores and bars as well as production facilities
(Industry Contribution, 2016). Despite the 14% drop in total alcohol consumed between
2011 and 2016 there is still expected to be slight increases in revenue, an increase of less
than 1% is predicted for 2018 due to a fall in discretionary income and then for the
following five years there is expected to be annual growth of over 2% (IBISWorld, 2018).
With the cider market growing at a fast rate despite the decline in the amount of alcohol
being consumed by Australians and the struggles that the alcoholic beverage industry is
experiencing it is an extremely good time to be a part of the cider industry.

Macro Environment Analysis

Political Analysis
 A major political effect on the alcohol and cider industries is the alcohol beverages
advertising code, the code has guidelines which affect the ways that companies can
advertise. The main parts of this code are, representing the consumption of alcohol in
a responsible way, ads mustn’t have a strong appeal to children, not suggest that the
consumption of alcohol would contribute to a change in mood, not show any
association between the consumption of alcoholic beverages and the operation of
motor vehicles, it must comply with Advertiser Code of Ethics and with the Australian
Alcohol Guidelines (Australian Government , 2004).

Economic Analysis
 An economic issue that will affect the alcohol and cider industries is the decrease in
discretionary income, discretionary income is the amount of money that the consumer

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 has left to spend after paying for bills and items that are necessary to live, less
discretionary income means less money to spend on alcohol.

Social Analysis
 A social trend that will affect the cider industry in a positive way is the health
consciousness of Australian people, with the rising interest in caring for the body many
people are trying to turn away from alcohol or find healthier types of alcohol. Many
people see cider as one of these options.

Legal Analysis
 The alcohol industries main legal influence would tie in with promotional laws (further
detail in political analysis). If a brand failed to follow the alcohol beverages advertising
code they would run into trouble with the law.

Micro Environment Analysis

Company Analysis
Positive
 Well established, currently the biggest cider brand in Australia.

 Successful traditional flavours such as apple and pear and good variations of those flavours
(i.e. sugar free or cloudy apple cider)

 Well distributed throughout Australia by Asahi, can be found in most bottle shops and places
that sell alcohol

Negative

 Fails to capitalise on major marketing opportunities such as sporting events.

 Cider is a seasonal drink, sells much better in Summer than it does in Winter.

 Only one non-traditional cider flavour (berry), failing to come up with new ideas when other
brands are.

Somersby is leading the way for the cider industry due to its well-known brand, high quality products
and vast distribution throughout the country. For Somersby to start challenging the real giants of the
alcohol industry they must be innovative with their ideas, take advantage of marketing opportunities and
focus on boosting sales year-round, not just in summer.

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Competitor Analysis
Strongbow

Strongbow was established in 1962 in the UK and was first brought to Australia in 1970
(Strongbow, 2018), it is currently Australia’s second most popular cider behind Somersby with
538,000 Australians drinking it in an average four-week period (Roy Morgan , 2016). In
comparison to Somersby’s product range Strongbow lacks variety, they produce 6 products
and 5 of them are variations of apple cider. Strongbow have well distributed products, they
are stocked at most bottle shops and places that serve alcoholic beverages. Strongbow are
such competition because while they may not have variety the products they do have are liked
by the customers and they have been in the Australian market for a long time.

5 Seeds

5 seeds was launched by Lion in 2009 and has experienced success in the Australian cider
industry (Lion Co., 2018), it is currently Australia’s third most popular cider with 512,000
Australian’s having one within an average four-week period (Roy Morgan , 2016). 5 Seeds
has slightly more variety than Strongbow but still trails behind Somersby in that regard,
Somersby and 5 seeds have each have apple, pear and berry flavoured ciders. 5 Seeds
distribution is good but not as good as that of Somersby and Strongbow, 5 Seeds is not as
common at all bottle shops.

Rekorderlig

Rekorderlig is a Swedish cider brand that was founded in 1996 (Rekorderlig, 2018), it is known
for its wide variety of unique flavours. It is the fourth most popular cider in the Australian market
with 332,000 people having one in an average four-week period. While it is a competitor of
Somersby and other major cider brands Rekorderlig wouldn’t be considered as much direct
competition as Strongbow and 5 Seeds due to its more out their flavours such as passionfruit,
forest berries and raspberry-lime. These bold, out there flavours separate them from other
traditional cider brands which means they don’t have to compete with the other brands with
basic cider flavours (i.e. apple or pear). Rekorderlig’s let down is its distribution, a lot of bottle
shops do not stock it.

Carlton Draught

The beer industry is the cider industries biggest rival, of the Australian people who drink
alcohol 39.1% consume beer compared to only 13.6% who drink cider. The leading brand in
the Australian beer industry is Carlton Draught with 17% of beer drinkers consuming it
(Morgan, 2018). Carlton Draught is a member of the Carlton and United Breweries group, they

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have been brewing beer since 1864 and have perfected a product that Australian’s have grown
to love (Carlton and United Breweries, 2018). Carlton Draught also have a very successful
partnership with the AFL which is a huge and successful part of marketing their products.
There are obvious differences between beer and cider, a major one that has helped the cider
industry is the health benefits of drinking cider rather than beer. Carlton Draughts distribution
is excellent with their products being stocked at any respectable bottle shop and anywhere
that serves alcoholic beverages.

Competitive market Summary

Competitor Target Market Product Price Promotiona Distribution Strength/
l Weakness
Strongbow Australian 18+ Basic cider $46.95 per case Hand Available in Classic flavours that
who consume flavours that of 24 picked by most bottle everyone loves.
alcohol (69.3%) customers know (Dan Murphy's, Hand shops and Not much variety which
(Morgan, 2018) and love. 2018) campaign places that sell has caused them to fall
alcoholic behind
beverages

5 Seeds Australian 18+ Primarily produces $41.90 per case Plant the Available at Competitive price with
who consume basic cider of 24 Seed most decent quality product.
alcohol (69.3%) flavours but also (Dan Murphy's, Campaign sized bottle Isn’t as well established
(Morgan, 2018) has some unique 2018) shops and some as Strongbow and
flavours such as specific bars and Somersby
berry. events

Rekorderlig Australian 18+ Specialises in $87.99 per case Beautifully Not stocked at Lots of unique, bold
who consume unique flavoured of 24 Swedish many bottle flavours
alcohol (69.3%) ciders such as (Dan Murphy's, Campaign shops, can be Poor marketing in
(Morgan, 2018) passionfruit and 2018) (Worldwide hard to find and Australia.
raspberry-lime. , nothing won’t be
Australia available at
specific) many pubs or
events.

Carlton Australian 18+ Carlton Draught, $49.95 per case Major Available in Well established beer
Draught who consume type of beer that of 24 advertising most bottle that the people know
alcohol (69.3%) has been around (Dan Murphy's, through shops and and love
(Morgan, 2018) for generations 2018) AFL places that sell Health conscious trend
that is known and partnership alcoholic is hurting normal high
loved by beverages carb beers like this one.
Australians

Consumer Analysis
The cider industries consumer numbers have grown significantly in the last decade, possible cider
consumers are the 69.3% of 18+ year old Australians who drink alcohol. Of those people 13.6% of
them are cider drinkers, of these drinkers the split between male and female drinkers is close with a
slight advantage to women. There is quit a different in popularity between age groups with 27% of
younger Australians (18-24) consuming a cider within an average 4-week period compared to only
7.8% of Australians who are 50+ years of age (Morgan, 2018). Cider can be purchased at liquor stores,
online or at pubs and events.

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SWOT Analysis

Strengths
•Asahi has strong distribution
throughout Australia
•Well established and trusted brand
name, Australias top selling cider
•Succesful, well loved traditional
flavours as well as some more
modern, unique flavours. Good mix
Weaknesses
•Seasonal Drink, sales are much
higher in summer than winter,
600,000 more people drank cider
during Summer months in 2016
•Cider industry on a whole well
behind other alcohols (i.e. beer and
wine. Of the 128.8 million glasses of
alcohol that were consumed in
Australia in 2017 only 3.3% of them
were cider.

Opportunities
•Advertising through sporting events
such as rugby league or AFL, this
would be a big oppurtunity for
marketing in general as well as
helping assist sales during winter
months (NRL and AFL in winter)
•The cider industry could take
advantage of the health trend that is
going through Australia, advertise
the benefits of drinking cider over
other drinks.
Threats
•Craft beer, as cider grows so does
craft beer, the unique flavours and
low carb variations of beer have the
same appeal as cider when
consumers are looking for a healthy
altarnative to beer
•Rekorderlig cider, it has a very
different product range to the rest
of the cider industry

Recommendations/conclusion
After analysing the cider and alcohol industry as well as Somersby and its competition there a few clear
steps that Somersby could take to stay in front of the cider market and catch the rest of the alcohol
industry. They have to continue producing the apple and pear ciders that have got them too the top of
the cider industry as well as diversifying their range of products to ensure they don’t fall behind brands
like Rekorderlig. They should also look into advertising through the NRL or AFL, this would be a great
form of promotion, not only to compete with beer brands but it would also assist with increases sales
during the winter months.

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Reference List
Australian Government . (2004, Jan 1). Australian Beverages Advertising Code. Retrieved from
Alcohol.gov.au:
http://www.alcohol.gov.au/internet/alcohol/publishing.nsf/Content/BFE15C2AC3242C22CA25
718E0081F1C5/$File/advertising.pdf
Carlsberg Breweries. (2018, 04 16). Our Rich Heritage. Retrieved from Carlsberg Group :
https://carlsberggroup.com/who-we-are/about-the-carlsberg-group/our-rich-heritage/
Carlton and United Breweries. (2018, 04 19). Our Beers. Retrieved from Carlton Draught:
https://www.carltondraught.com.au/our-beers/carlton-draught
Dan Murphy's. (2018, 04 19). Buy Beer and Cider Online . Retrieved from Dan Murphy's:
https://www.danmurphys.com.au/dm/home.jsp
IBISWorld. (2018, February ). Cider Production- Australian Market Research Report. Retrieved from
IBISWorld : https://www.ibisworld.com.au/industry-trends/specialised-market-research-
reports/consumer-goods-services/cider-production.html
IBISWorld. (2018, January 1). Liquor Retailing - Australia Market Reasearch Report. Retrieved from
IBISWorld : https://www.ibisworld.com.au/industry-trends/market-research-reports/retail-
trade/food-retailing/liquor-retailing.html
Industry Contribution. (2016, June 30). Retrieved from Alcohol Beverages Australia:
https://www.alcoholbeveragesaustralia.org.au/?s=industry+contribution
Lion Co. (2018, 04 20). Alcohol Beverages. Retrieved from Lion Co. : https://www.lionco.com/our-
brands/alcohol-beverages-au/cider
Morgan, R. (2018, April 11). Wine most popular, but beer most drunk. Retrieved from Roy Morgan:
http://www.roymorgan.com/findings/7550-wine-most-popular-but-beer-most-drunk-
201804060631
Rekorderlig. (2018, 04 20). About Us. Retrieved from Rekorderlig :
http://www.rekorderlig.com/nz/about-us/
Roy Morgan . (2016, December 13). Somersby and Strongbow leading the cider boom. Retrieved
from Roy Morgan : http://www.roymorgan.com/findings/somersby-strongbow-leading-cider-
boom-201612130928
Stainkamph, M. (2016, May 30). Australian cider industry to be worth more than $404 million in 2021:
Research. Retrieved from Smart Company:
https://www.smartcompany.com.au/growth/australian-cider-industry-to-be-worth-more-than-
404-million-in-2021-research/
Strongbow. (2018, 04 20). About. Retrieved from Strongbow: https://www.strongbow.com.au/about

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