NEW YORK (MainStreet) – Hard cider may not be as big as beer yet, but its days of hiding in dart-league pubs behind Guinness taps is over.
Apart from Northeast post-collegians sipping Woodchuck and Boston locals having Magners on ice, there weren't a whole lot of folks drinking hard cider instead of beer, wine or spirits until just recently. In 2009, cider was a $35 million market in the U.S. that wasn't spreading past core markets in the Northeast, Northwest and Great Lakes. Last year, it exploded into a $366 million industry, according to market research firm IRI.
That's up from $172 million a year before and, at 75.4% growth, is way ahead of the 18% growth of the craft beer segment through June of last year and the 1.9% downturn in overall beer sales just a year earlier. With IRI's research excluding sales at liquor stores discount stores such as Wal-Mart, even that impressive growth may be underestimating cider's impact. Granted, it's still only 1.2% of the overall beer market, but with that overall market shrinking, there's a lot of reason to focus on success stories.
Part of cider's appeal is that it has roughly the same low alcohol content of beer, but a sweeter flavor for those put off by hop or grain bitterness. Hard cider makers press apples for their juice, add yeast and let the mixture ferment in a process similar to winemaking. The yeast chows down on the sugars in the juice and produces a concoction with 6% or more alcohol by volume. That's similar to craft beer and, like beer, can have its alcohol levels reduced to a more drinkable brew below 4% ABV or a potent, wine-like concoction closer to 12% ABV.
It also helps that cider's sweetness doesn't discriminate. Roughly half of cider's consumer base is made up of women, compared with about 28% for beer, according to Nielsen. It's also gaining momentum with younger drinkers. While Baby Boomers and World War II-era beer drinkers are 41% to 69% less likely to pick a cider than the average drinker, Generation X is 1% more likely to choose a cider, while drinking age Millennials are more than twice as likely to go with a cider. While women have no problem picking up cider, they're 38% to 46% less likely to pick up domestic, imported or craft beers than their male counterparts.
Cider not only invites everyone to the party, but it gets them to shell out a lot more for the privilege. As IRI points out, cider sells for an average $34 a case. That's a impressive jump from the $29-a-case paid for imported beers, but just below the $35 spent on the average case of craft beer.
In the past few years, brewers including Anheuser-Busch InBev (BUD) - Get Report , MolsonCoors (TAP) - Get Report , SABMiller (SBMRY) and the Craft Brew Alliance (BREW) - Get Report have taken on big cider brewers such as Ireland-based C&C by making cider lines of their own. While locally based cider producers still thrive and places such as Portland boast cider bars, brewpubs and happy hours, here are the five ciders that are changing the way cider is sold to the U.S. and the world:
Owner: Heineken USA
Cider sales in 2014: $15.2 million
Change from 2013: 83.6%
Boy, we're guessing Woodchuck Cider maker Vermont Hard Cider would love to see growth like this.
Sadly, it could have: If it hadn't sold the U.S. rights to H.P. Bulmer's English cider to Heineken USA in 2012. Strongbow's English roots stretch all the way back to 1962 and its expat following is incredibly loyal. At a time big U.S. brewers are racking their brains trying to figure out how to make hard cider “manly,” Strongbow and its black-and-gold tallboy cans, soccer sponsorships and slacker advertising never had that issue.
As a result, Strongbow took nearly a third of the UK's cider market and won favor with Anglophiles who clamored for it at bars in the U.S. But Strongbow's streak of good fortune here may be coming to an end thanks largely to Heineken. Where Vermont Hard Cider had deep reverence for Strongbow's traditional dry cider recipe, Heineken showed no such loyalty and threw out the original formula last year. Like Hershey suing to keep British Cadbury out of the country, Heineken decided to Americanize Strongbow by turning it into an overly sweet cider that's a bit much even by U.S. standards. Core fans were outraged and casual fans were too distracted with other brands to care.
Thus, Strongbow holds a scant 4.2% share of an already small cider market and has Anheuser-Busch InBev's Stella Cidre breathing down its neck after nearly tripling sales in 2014. Vermont Hard Cider won't reap the benefits of Strongbow's growth, but at least it won't go down as the heartless company that ruined Strongbow for its most loyal U.S. drinkers.
4. Smith & Forge
Owner: SABMiller/MolsonCoors joint venture MillerCoors
Cider sales in 2014: $19.6 million
Change from 2013: N/A (first year available)
MillerCoors already had a cider brand, the craft cider Crispin that it bought for a reported $40 million in 2012. The problem is that nobody cared.
When Crispin racked up $5 million in sales in 2012, it looked like a coup for its new parent company. That only seemed more apparent when sales jumped 200% last year, according to Nielsen.
The Kansas City, Mo.-based Crispin, however, turned out to be only one part of the equation. It seems Crispin came across as a little too aloof and girly for MillerCoors' liking and was failing to draw the male light-lager drinkers abandoning the company's big beer brands. In 2014, it saw sales flatten, with just a 0.8% uptick for the year and a 2.3% cider market share that dropped 1.7% from the year before.
As a result, Crispin got a more macho stablemate in 2014. MillerCoors conjured images of blast furnaces and sweat for commercials for the highly unsubtle Smith & Forge cider brand, which comes in a can and has a potent 6% alcohol by volume. It got a huge ad push and is getting the Axe Body Spray and Maxim magazine “bro” treatment usually reserved for second-tier sitcoms and pre-bailout Dodge commercials. Apparently, MillerCoors feels there's a "massive unmet need" for ciders that target males, though men and women drink cider in about the same numbers and plenty of men drink Magners and Strongbow without the “for men” label.
Also, some of its competitors are far more subtle about addressing that point ...
3. Johnny Appleseed
Owner: Anheuser-Busch InBev
Cider sales in 2014: $20.7 million
Change from 2013: N/A (first year available)
This is supposed to be Anheuser-Busch's “guy cider,” but Johnny Appleseed and its fairly generic packaging has never given off that vibe.
In truth, A-B InBev has cast too broad a net with its various ciders to play favorites. Its cider for the calorie conscious, Michelob Ultra, put up $7.5 million in sales last year, which is 17.1% lower than 2013. Its Stella Cidre, which sells only four to a pack and targets crossover wine drinkers and well-heeled buyers (it sponsored the Sundance Film Festival, after all), sold $11.9 million worth of cider and almost tripled its take from 2013. Altogether, A-B has cornered 10.8% of the cider market and has a bigger presence than Woodchuck (but not C&C at a combined 12.9%).
A-B is now deeply invested in cider, which makes even that 10.8% share disappointing. It's a lot of share in very little time, but it's still 46 percentage points behind the cider market's leader. When you're a multinational brewing company getting your clock cleaned by a U.S. firm a fraction of your size, it becomes clear that a beer background doesn't mean all that much when the companies ahead of you have put a lot more effort into their cider.
2. Woodchuck Cider
Owner: C&C Group
Cider sales in 2014: $38.3 million
Change from 2013: -13.1%
This company has spent a lot of money to come in second in the U.S. market. It's not used to taking second place anywhere it calls home.
It's been a much tougher haul than expected in the U.S., though. The owner of the Magners and Bulmers brands threw $25 million at the California-based Hornsby's brand in 2011 and took a 20% stake of the U.S. market. Then C&C Group came in. It followed that up by buying Vermont Hard Cider and its Woodchuck brand for $305 million in 2012, which gave it another 60% of the U.S. cider market.
That evaporated quickly as the cider game changed. While Magners is still quite popular with Irish and British expats and saw sales jump 58.6% last year, C&C unwittingly stuck itself with two brands that U.S. drinkers knew either as '90s craft holdovers or the saccharine-sweet ciders of their youth. The rebranded, clear-bottled Hornsby's saw sales plummet 40.1% as it was mistaken for a malt beverage. Woodchuck, meanwhile, faced an identity crisis as it struggled to move beyond a far simpler past.
As new Chief Executive Dan Rowell told us last year, a $34 million cider house expansion and the inclusion of new varieties including Belgian White and a hopped India Pale Cider have him feeling optimistic about the future. In the meantime, Woodchuck is weathering the storm after ceding its cider crown to this brand ...
The makers of Samuel Adams have been cranking out their Crisp, Apple Ginger and Traditional Dry versions of this cider since fall of 2011 and have produced the nation's best-selling cider as a result. It accounts for 56.8% of the U.S. cider market and is expected to rise to 20% of Boston Beer's overall by the end of this year.
Boston Beer had tried its hand at cider once before, introducing HardCore Cider in the late '90s, but decided to give it another stab with a more craft spin. We had the great fortune to speak to Boston Beer cider maker David Sipes not only about how the produce was influenced by his time studying ciders and apples from around the world and culling fruit from France and Italy, but how the novelty of cider and its similarity to wine caught U.S. drinkers' imaginations at just the right time.
Boston Beer's gamble paid off as Nielsen ranked Angry Orchard among its Top 10 beer growth brands at the end of 2012. Its real step forward this year came in the form of its creative new styles, though. The popularity of its core styles allowed Angry Orchard to branch of into small batches such as its sweeter, wine-like Iceman variety and its Cinnful cinnamon-spiced seasonal. Just as most mainstream U.S. bars or restaurants still have Budweiser or Coors as their default beers, Angry Orchard has established a presence as a default cider. If an establishment has just one cider on tap, there's a strong chance Angry Orchard is its cider of choice.
— By Jason Notte for MainStreet
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