Where did it all go wrong?

Published: 28 August, 2008

Magners is no longer the golden child of the cider industry. John Holberry tells Christine Boggis his rescue plans

John Holberry doesn't quite have the look you might expect of the man at the helm of the brand that drove the UK's ailing cider market into 21% growth (according to Nielsen, year to June 14).

In fact, the managing director for Great Britain is open about

Magners - though still in growth in the off-trade -

not doing as well as it should be.

"Although we are having a very poor summer, you won't see me blame the weather for the performance - it can't be the reason Magners is not doing well, because cider is still doing well. What are we doing wrong?" he asks.

The Irish-owned company has fixed on three reasons for its faltering performance: a failure to listen to what the trade wanted, a lack of innovation and an enormous amount of innovative, and cheaper, competition.

It was always clear

the brand couldn't keep up its meteoric growth once it reached full distribution, but now Holberry says it is losing share to the raft of new releases hitting retailers' shelves.

"The off-trade is growing at something like 20%

and we are not - yet we are investing 12% of the advertising in the long alcoholic drinks market, and more than 60%

in the cider category.

"We are investing 60% of above-the-line spend and actually not getting market share growth, which is not a good performance," he says.

Staying premium

Magners spent £13.3 million on ads in the year to June, according to Nielsen figures - nearly four times as much as its closest rival Bulmers.

The strategy remains to be premium, keep prices high and invest above the line.

In January this year the brand was growing 65% by value year on year, but by April that had slowed to 35%, according to Nielsen.

Magners has launched a major recruitment drive and is looking for sales, marketing and administrative staff to boost its 30-strong British team to nearer 100, in a bid to make up for what has been perceived as a high-handed approach driven from the Irish headquarters.

Holberry admits: "We don't listen to our customers as well as we should, and we have got to put that right. For very good reason we were run from Ireland in a very structured way. Now it is time to listen to the UK customers, because we are so big they won't allow us to grow further unless we take account of what they think."

The on-trade remains the primary focus for Magners - after all, as Holberry points out, most people don't have enough ice in their own freezers to create the advertised perfect serve - but under his leadership it has relaxed its anti-off-trade stance and finally released pint bottles in singles and even six-packs .

It's about time too, as the brand's off-trade volumes drew closer than ever to those in the on-trade this July, reaching a roughly 60-40 split in the on-trade's favour, from 70-30 last year.

And, in a major departure for a brand so successfully seeded in the on-trade that retailers were clamouring to get their hands on it, its latest innovation, 2.3% abv Magners Mid-Strength, is being trialled in Tesco with no fixed date for an on-trade roll-out.

"Our desire is that when we go out to our customers and tell them what happened when we put Mid-Strength in, we have got some evidence. We don't want the independent channel to put products in that don't sell," says Holberry.

He adds: "One thing I have experienced is humility around new products. You are never sure, however logical or sensible, whether they will compete."

Served over ice and priced the same as Magners - around £1.89 a bottle in Tesco - the new product scores points for flavour ,

seeming to escape the stripped-down, watery flavours you can get with lower alcohol wines and beers. But is there really demand for a low-alcohol cider?

Being responsible

Holberry says Mid-Strength has done well in consumer tests in Ireland, but notes that there is also a compelling business case for being seen to offer something that helps consumers to drink more responsibly.

"We are under attack as a category, and we have to be seen to be responsible - and putting 'drink responsibly' on your advertising and then launching a 9% abv cider in 2-litre flagons is hardly going to go down well with consumers, because they see through it. You get more credibility if you are seen to be doing something that encourages people to drink responsibly, even if they don't. If we want them to drink responsibly it is our job to make sure they can."

Coming after the limited success of Carling C2 - which Holberry launched in his

previous role as sales director of Coors - Mid-Strength seems like a drop in the ocean

in the trade's bid to appear more responsible.

So how

to fight back against government policy and creeping regulations?

"What you have to do is recognise that, mostly, regulation comes from consumer group pressure, and what we have

to do as a drinks industry is mobilise consumers rather than consumer groups," says Holberry. "Most consumers expect changes to be slow, and are much more comfortable with slow change - whereas extreme pressure groups tend to require extreme action but are very vociferous, whereas consumers are not.

"If, as an industry, we can mobilise what most responsible people think, then I think that would be quite attractive for the category, as opposed to telling consumers what they think. It is also more effective than if I stand up and talk to Gordon Brown about what he should be doing when I have a vested interest."

Who is John Holberry?

Born Bradford 1958

Studied law at Liverpool University

Started as a graduate trainee sales rep at Procter & Gamble before changing career to join the Merseyside Police Force in 1981

1986 entered the drinks trade as district manager at Imperial Inns & Taverns, where he moved on to become director of regional sales

Joined Bass Brewers as regional managing director and was appointed the brewer's youngest

ever board member in 1997

2002 Coors acquired Bass and Holberry was made managing director of sales operations

Joined Magners in March 2008.

Magners timeline

1935 company founded in Clonmel, County Tipperary

2003 Magners launched in Scotland