The Artful Strategist learns the hard way that there are no facts about the future

My mind has been under the influence of cider today.

Now just to be clear, cider won’t supplant Shotover Trinity in my long drink affections, nor threaten the hegemony of rosé in my everyday drinking repertoire – just as well given the number of cases of the pink stuff we recently shipped from the Var to our cave in Cannes – but cider more than any other product is the one which helped make my name, and especially on mellow Autumn mornings when our apple tree seems magically be-decked with red fairy lights, my attention shifts to the world of cider and an important business lesson which I learned there.

You never forget your first client, and in 1978, as a strutting young adman I found myself stuck behind tractors at harvest time on narrow country lanes on the borders of Gloucestershire and Herefordshire. I was on my way to an important client meeting. The client in question was Bulmer’s cider, and the tractors were transporting loads of Ladies Fingers and Kingston Blacks to the Cider Mills in Plough Lane, Hereford.

Bulmer’s, more than any other client, has been the big red thread of my marketing career, and I always found it a rather civilised and bucolic English family business.

My first job on the account was to work on the launch of a new upmarket cider called Bulmer’s Special Reserve. The launch campaign had a TV ad with Babs Windsor extolling its virtues and proposing in her best cockney that Special Reserve was Posher than y’er average cider. To be frank, this was also the moment that I discovered that creating brands far more interesting than making very average ads.

Six years later, I went on to launch my own brand. With Elaine and Graham, we created The Value Engineers, and Bulmer’s was one of our four founder clients. But these were challenging times for the cider business: after a glorious run of Hereford Lightning summers which saw cider sales boom and the company go public, a combination of awful weather and an aggressive tax hike put the market into sharp reverse, and Bulmer’s just recently the darlings of the London Stock Exchange, saw its share price collapse and was making people redundant.

Laying people off is never easy, but it was especially hard for a paternalistic culture like Bulmer’s, a big employer in a small city.

The Value Engineers had been appointed to find ways of kick-starting market growth and to create a portfolio of exciting product ideas that would bring vitality to the whole category. We began -predictably- with a detailed forensic analysis of the business and the marketplace. This immediately highlighted far more problems than opportunities. We discovered serious demographic challenges, product palatability issues, un-motivating brand imagery and menacing low-price competitors taking share and feeding on the company’s margin. The case to invest in marketing seemed at best problematic, and to make matters worse research showed that a whole battery of new product concepts had failed to excite the consumer.

Asked to provide a 3-5 year forecast for the board, I put on the gloomiest face I could find, and intoned that that given the precipitant nature of market decline and the prevailing competitive pressure on margins, marketing based growth would be unlikely. After a fantastic run over the previous five years, I ventured that the cider market would be unlikely to exceed 3.5m hectolitres ever again.

This turned out to be an appallingly bad forecast, and is probably the biggest single marketing goof I can admit to. (For the purposes of my own morale, I should point out that I belong to a distinguished society of lousy forecasters that includes as members Thomas Edison, Thomas Watson and Bill Gates)

Not only was the UK cider market growing again within two years, but by 1995, the market had doubled to 6m and by 2010 had trebled in size to over 10m hectolitres. Today the UK cider market is a £3bn business that accounts for 9% of all alcohol drunk, and is one of few alcoholic drink categories in the world that seems to be in rude health.

In mitigation, I did learn an important lesson from this fiasco.

The problem with our forecast – so obvious with hindsight- was that I had made one massive and erroneous assumption: that the cider market would continue pretty much as it always had, and that cider would look and taste like it had always looked and tasted. What we had not considered were the possibility and potential for new liquids and/or new marketing concepts to disrupt the world of cider as we understood it, and which would give new consumers, new reasons to drink it on new occasions.

As the white cider rocket-juice sector pioneered by Diamond White took off rapidly alongside more traditional amber ciders, the whole market dynamic changed, and the episodic long-term upward trend resumed. A few years later Magners’ were able to create a similar growth effect with another simple innovation that drinkers loved: serving cider in long glasses over ice.

In 1986, we had come to believe that the category was in a box: the cider box.  But it was a box of our own making, and we had put ourselves into it as a result of our own deterministic analysis that was long on detail but short on marketing imagination which after all, is the real rocket fuel of growth.

Forty years later and back in my garden today, my glass of cider seems a little cloudy. Is that because it’s off or could cloudy cider be the new big thing?

Precept: When faced with the challenge of looking into the future to find growth, consider all the assumptions you are making very carefully.

If in doubt, artful strategists follow my mentor David Bernstein’s rule: Never assume!