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Wednesday, August 8, 2012

Cider Explodes in U.S. Market

Updated: I forgot to add in the analysis...sorry!
I've been noting an explosion in small -- and not-so-small -- cidermakers, and it's reflecting a huge category growth. According to a story in today's Shanken News Daily, cider sales in the U.S. rose by 23% last year (that's 5.7 million cases sold in 2011...and for those of you who, like me, are used to thinking in barrels, it's about 414,000 bbls.). Pretty amazing, and probably explains why A-B and Boston Beer both rolled out ciders this year (Michelob Ultra Light Cider and Angry Orchard, respectively). It's amazing what cider can do when it gets proper distribution, too: they report that Crispin cider, after being bought by MillerCoors' Tenth & Blake craft/import unit in February, has been growing at about 300% per month since the purchase. That's frickin' amazing.

Anyway you slice it, the 800 pound gorilla is Vermont Hard Cider, which makes Woodchuck and Wyders, and imports Strongbow and Woodpecker. From the SND story:
“We didn’t have much competition in the cider category for almost 20 years,” says Bret Williams, president and CEO of Vermont Hard Cider Co., the U.S. market’s leading cider player. “It’s a very unique time ['very unique', it makes the editor in me shudder...], with more brands coming into the mix. But competition is good for the category. It’s building awareness and bringing in new consumers.”
Vermont Hard Cider’s top brand is the Woodchuck label ($8.99-$9.99 a six-pack), which last year grew 32.8% to surpass the 2-million-case mark [with Strongbow, that's half the market]. The brand—which includes a range of seasonals and private reserve offerings—is trending at more than 28% growth for the first half of 2012, according to Williams, and is expected to hit 3 million cases by year-end. Vermont Hard Cider is breaking ground next month on an expansion project at its Middlebury, Vermont production facility that will grow capacity from 4 million cases to 10 million cases annually. Vermont Hard Cider is also investing heavily in innovation, recently launching Woodchuck in a 12-ounce can format. In addition, the company has started production on an aged cider matured in Bourbon barrels, set to roll out later this year.
Kinda sounds like craft beer, don't it? You'd almost expect them to be announcing plans to open a second facility in North Carolina or something... Anyway, there's also flavors coming -- Crispin's Fox Barrel pear cider is kinda tasty -- and you'll likely see more draft options, breaking out of the single handle most places offer. 
Vermont Hard Cider’s Williams says the on-premise will be a key battleground as cider continues to expand. “On-premise accounts won’t have several ciders on tap—they’ll only have one,” he says, adding that he sees cider ultimately gaining upwards of a 10% share of the U.S. beer market. “In the past 20-plus years, I’ve never been more bullish on the category.”
What's driving it? Couple things. First, it's simply taste. Cidermakers are making better-tasting cider, just like the craft brewers made better-tasting beer. They're making more interesting ciders, robust, dry, flavored with other fruits and spices, big ciders and session ciders, and like craft beer, variety sells. Woodchuck's making seasonals, and they sell. Secondly, you've got sales to people who just flat-out don't like beer, and never will -- they're out there, just like the folks that don't like wine or whiskey -- or can't drink it: cider is increasingly picked as a natural choice for the growing number of diagnosed celiacs, who cannot digest the gluten in beer, and are actually harmed by it. Cider tastes good, it's fizzy and you drink it cold, and it has about the same ABV as beer; a very acceptable substitute for some.

Is this growth bad news for craft beer? No! Getting people to choose different things is good for craft. Which brings up a much bigger question: is the rise of really large craft brewers -- Boston Beer, Sierra Nevada, New Belgium, Boulevard -- bad news for craft beer? That's a topic for another day. For now, let's have a glass of cider.

1 comment:

Eric Allan West said...

Vermont Public Radio produced a solid piece on Woodchuck back in June. Woodchuck anticipates losing market share as cider explodes but doesn't see that as a bad thing...sort of a "rising tide lifts all boats" scenario.