UK cider maker the Devon Cider Company has been acquired by its rival Aston Manor Brewery after going into administration at the end of September. As well as saving 50 jobs, the purchase should enhance Aston's portfolio of ciders, enabling it to benefit more widely from the continued appeal of such beverages in the UK.
The acquisition of Devon Cider highlights the continued growth of Aston, which has invested strongly in its business during 2009 after a record year of sales. According to reports, the Birmingham-based cider company expects to record revenues of over GBP50m for the first time this year, as the popularity of both its premium and regular ciders continues to grow.
In contrast, Devon Cider has performed more sedately, with turnover believed to be around GBP20m a year. The company has struggled to compete with its larger rivals such as Magners and Bulmers, which have dominated the category. Nevertheless, the acquisition by Aston demonstrates the latter's confidence that its smaller competitor can succeed in the long term as a niche cider brand.
This belief stems from the continued growth of the cider category as a whole. The UK cider market was worth GBP2.9 billion in 2008, achieving a compound annual growth rate of 7.9% between 2003 and 2008. This high growth is set to lessen slightly in the coming years but still achieve a significant 5.5% between 2008 and 2013.
Cider's growth has been heightened by the success of the 'over-ice' proposition, whereby premium brands such as Magners and Bulmers have marketed their drinks as being best served in a long glass with ice. The consumer appeal of premium brands such as these continues despite the economic slowdown, highlighting its position as a premium but affordable alcoholic beverage.
Devon Cider has the ability to perform well under its new owner due to its production of premium bottled ciders that address the over-ice trend, as well as its strong ties to tradition and locality. The latter two are features that consumers are increasingly seeking in their purchases. Therefore, the company's brands could become profitable parts of Aston's portfolio.