A rotten apple spoils Magners’ full barrel

Of course, it could be the simple, unvarnished truth. But Mitchell & Butlers’ insistence that its subsidiary All Bar One is delisting Magners cider in favour of a small, Suffolk-based brand called Aspall because Magners isn’t upmarket enough rings hollow all the same.

Of course, it could be the simple, unvarnished truth. But Mitchell & Butlers’ insistence that its subsidiary All Bar One is delisting Magners cider in favour of a small, Suffolk-based brand called Aspall because Magners isn’t upmarket enough rings hollow all the same.

Because the cynics among us, fairly or otherwise, will immediately connect M&B’s decision with something entirely different: Magners increasingly tricky supply problems in the UK.

Readers will barely need to be reminded that Magners is one of the most extraordinary marketing case studies of the past year. Last week, a trading statement underlined the 250% increase in sales in the six months to the end of August, on top of the 130% increase which it reported in its year-end figures. In a more graphic way, it could be said (though Scottish & Newcastle, maker of Strongbow, might beg to differ) that Magners has re-invented the UK cider market. It has come from nowhere (well, Ireland strictly speaking) to UK market leadership in just a few years; in the process it has transformed a rather sleazy, declining tipple into something more adult and sophisticated that can be drunk over ice. And, as the IPA Effectiveness Awards will no doubt take note, much of that successful repositioning is down to advertising.

So what could possibly have marred such a fairy-tale story? There had been rumours in the wholesale industry for some time, but C&C, the company that makes Magners, was finally forced to come clean in the self-same trading statement in which it trumpeted its successes. It simply cannot keep up with the demand for Magners. Though an extra €50m (£34.1m) has been allocated to new bottling facilities to satisfy demand in the take-home sector, the extra plant will take time to come on stream. In the meantime, there is a grave danger that distributors will lose patience, and Magners’ predicament become a hostage to covert manipulation by its competitors.

To the uninitiated this must seem a bizarre situation for the brand to be in. How can one possibly become a victim of success in this way? Why didn’t C&C, so brilliant at its marketing, foresee its own difficulties? Yet making a mistake with demand planning is more common than it seems, affecting even the biggest of blue-chip marketers who should – it might be thought – have known better.

Some 15 years ago, Brooke Bond foods did it with Oxo Gravy Granules, and ended up having to can the advertising campaign (a possibility for Magners, too). More recently, Unilever has been at it again, underestimating demand for a soya-based fruit drink called Adez. In 1999 McDonald’s discovered an embarrassment of riches when a 2-1 voucher offer on Big Macs to celebrate its silver anniversary stimulated 4 million sales – twice what it had expected, and certainly a lot more than it could cope with. Carphones Warehouse totally underestimated the popularity of its "free" broadband offer, with egg on the face for Charles Dunstone as a result. And the list goes on… There must be an easier way. But if it is so obvious, why haven’t more marketers found it?

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