How the Craft Brew Alliance's Joe Casey Is Hopping Up Cider

PORTLAND, Ore. (TheStreet) -- As the rest of America marvels at the growth of hard cider, the Pacific Northwest wonders what took it so long.

Already boasting an outsized reputation for both craft beer and wine, the region and the states surrounding it have also developed a strong taste for hard cider. Cider producers such as Liberty, Wandering Aengus, Tieton, 2 Towns, Carlton Cyderworks are among the more than 30 members of the Northwest Cider Association that call the region home. That doesn't even include California cider works such as Ace that include the area in their broad distribution circles.

This week marks the annual Northwest Cider Week and invites a player to the table for the first time: The Craft Brew Alliance ( BREW). The collective that includes Portland, Ore.-based Widmer Brothers and Woodinville, Wash.-based Redhook launched its Square Mile Cider Co. last month as its first foray into the region's already packed cider market. For those who doubt just how badly the Alliance wants a piece of cider profits, consider that it named its cider venture after the square-mile claims staked by settlers who arrived at the end of the Oregon Trail in the 1850s.

In the context of the current cider market, the Alliance's claim is potentially substantial. According to market research firm SymphonyIRI Group, hard cider sales at supermarkets and other stores hit about $90 million for the 12 months ending Oct. 30. That's up more than 65% from a year earlier and outpaces the 5.6% growth of wine and the 13% growth of the craft beer segment in 2011, as well the 1.7% growth overall beer sales last year. SymphonyIRI's research excludes sales at liquor stores and discount stores such as Wal-Mart ( WMT), which may downplay cider's growth a bit, but small cider makers are being joined by big brewers who want a bite of the cider market.

Hard cider sales still get tossed into the overall beer market and account for 0.2% of of sales, according to a report by Nomura Research. It's a sixth of the 1.2% market share held by Samuel Adams brewer Boston Beer ( SAM). Half of cider's consumer base is made up of women, compared with only 20% for beer. It also sells for an average of $35 a case, according to Nomura. That's well above the $29-a-case paid for imported beers and $33 brought in by craft beer.

Since then, Anheuser-Busch InBev ( BUD) has been pushing Michelob Ultra Light Cider as it tries to wriggle its way into cider. Meanwhile, Irish cider superpower C&C Group -- which owns the Magners cider brand and bought California-based Hornsby's in 2011 -- made a big push into the U.S. market by buying Vermont Hard Cider, its Woodchuck brand and nearly 50% of the U.S. cider market in October for $350 million. Not to be left out, Heineken bought Vermont Hard Cider's U.S. rights to the Strongbow brand last year as well. In February 2012, MolsonCoors ( TAP) and SABMiller joint U.S. venture Miller Coors bought Minnesota-based craft cider producer Crispin for a reported $40 million and have nosed into the cider section even further by offering Redd's Apple Lager. Even the folks behind Mike's Hard Lemonade have begun offering a cider options.

So what's leading the Craft Brew Alliance to believe Square Mile can succeed not only in the California, Oregon and Washington markets where it's sold, but potentially nationwide? The launch party the company held for Square Mile at Bushwhacker Cider, a Portland-based cider maker that is also the city's only cider-specific bar and bottle shop, offers some clues. While growing, the cider market as a whole is far from saturated and still fits itself into about four of Bushwhacker's coolers with plenty of room for imports. Boston Beer's Angry Orchard entered the market only last year and is already the most popular cider in the country.

It's also a market of huge niches just waiting to be filled. In Philadelphia, for example, Philadelphia Brewing's line of Commonwealth Ciders with hints of ginger and raspberry were so successful that they were spun off into their own entity. While Square Mile's Original recipe is a simple mix of Red Delicious, Yellow Delicious and Jonagold apples with lager yeast, the Alliance's cider maker may have hit on its company's own mix by adding a hefty portion of Galaxy hops to its Spur & Vine variety.

While it's a blend that's already been tried in Square Mile's native Oregon by Wandering Aengus (Anthem Hop Cider) and Reverend Nat's (Hallelujah Hopricot) and in nearby Washington by Finn River (Dry Hopped) and Tieton (Yakima Valley Dry Hopped), Square Mile's is far more subtle. It give the cider a tart, sour apple finish without being off-puttingly bitter. With Square Mile being made in Milton-Freewater, Ore., within spitting range of hop country, it's a natural choice and a great way to tap a potential craft beer drinking base ordinarily put off by cider.

We spoke with former Widmer Brothers brewmaster and current Square Mile cider chief Joe Casey about the jump into cider, his use of hops and how Square Mile could be the two-way gateway brew the beer and cider industries have been looking for:

The Spur & Vine hop cider seems like such a natural extension of the work Widmer Brothers has been doing with its Rotator IPA series. How did you get into making it and how has it been received?

Casey: I don't know if you know this, but Widmer Brothers as a brand used to make a hard cider back in the mid- to late-'90s. The brand was called Wildwood and it was a hard apple cider that we made for a handful of years and distributed mostly in the West, with a couple of pockets in the East.

I don't think the world was ready for a craft cider yet and it eventually went away, but we do have some experience with the cider world. Square Mile is a little bit craftier: We're producing more of a hopped version and treating it more like beer as opposed to a cider.

It's easy to conflate cider with beer when Magners and Angry Orchard can be found alongside Guinness and Samuel Adams, but they're made through very different processes. What kind of adjustments do you find yourself making when you go back and forth between the two?

Casey: The transition's kind of easy in a way. I think one of the reasons you're starting to see more cider these days is that there's a stronger crossover from the craft beer drinkers and craft beer makers into the cider world that wasn't there 10 or 15 years ago. I think that's part of it. Not only is the market ready for it, but the brewers are ready to expand production and do more things beyond craft beer.

As far as moving back and forth between the two, I heard a quote a while back that I kind of liked: Fermenting cider is like wine, but packaging cider is like beer. I think there's some truth to that. We're finding a little bit of the art up front on the cider side until it's ready to go into the package, and after that it's very familiar territory.

Your cider production is coming out of an orchard and facility in Milton-Freewater, Ore., about four hours from Portland just across the state line from the vineyards of Walla Walla, Wash. What kind of production capacity are you working with out there, and what are your hopes for the varieties you'll be able to produce?

Casey: There's a fair bit of capacity at the location where we're making Square Mile, so I think there's some room to grow. I think that cider consumers are also looking for a little more variety, so it's possible at some point that you might see some new products come into the line.

However, right now we just have the Original version and the Spur & Vine. The hopped version seems to resonate a little bit more with consumers, so production tends to skew in that direction. In the future, I think there are some more things we can do with hop ciders, spices, fruits and that type of thing.

Hop cider is a far more common find in the West than it is in the rest of the country, but Spur & Vine differs even from the varieties found there. The hops work more as an accent to both the aroma and the flavor than as an overpowering ingredient. How much did you have to toy around with the recipe and how does it strike the balance between its hop and fruit flavors?

Casey: We played around with it a fair bit on the front end. We actually used a beer yeast to make it instead of a cider or wine yeast. It's a lager yeast and we tried a couple of ale yeasts at first, but the fermentation was kind of on the cool side and the ale yeast didn't perform very well at that cold of a temperature. The lager yeast performed excellent.

As far as the hopping goes, we tried a handful of varieties there as well. We were looking at kind of a different spectrum of hops all the way from the spicy to the floral, to the crafty, to the very citrusy. The ones that resonated with us most were the citrusy hops, so at that point we focused on a hop variety from Australia called Galaxy that we've been using in our beers for the last year or so. It's a really interesting hop that has a nice citrus, fruity flavor. We thought that would complement the apples well, and it turned out pretty good.

The first thing that comes to mind is sour apple, like a less-syrupy Jolly Rancher with just enough bitterness at the end to give it a nip like lemonade. What's the reaction been to it on both the beer and cider sides of the spectrum?

Casey: It's still pretty new on the market and I haven't had the chance to go out and represent it myself, but the feedback I'm getting is that the hopped variety seems to perform much better.

Even in our pub, just amongst the employees, what we're seeing is that some people are actually mixing the cider with beer -- which has been pretty interesting to see and taste. You'll get concoctions that are mostly cider with a little bit of imperial IPA mixed in or half cider, half beer.

Was that something you'd had in mind while coming up with Spur & Vine?

Casey: I wouldn't say that we dreamed that it would be used as a blender. It's become more popular to serve cider over ice, so we anticipated that and worked that into our formula, knowing that when the ice melts the cider will dilute a little bit.

Now that you've used Galaxy hops in both Widmer Brothers beers and Square Mile ciders, what Widmer beers would correspond well with Spur & Vine if people were thinking of giving one a shot based on the other?

Casey: We've used Galaxy in our Rotator IPA series before, but it wasn't the dominant hop in the blend. But we have Galaxy in our O'Ryely Rye IPA. We've also used not Galaxy hops, but Citra hops -- which are very similar from a sensory standpoint -- in our Citra summer seasonal (Citra Blonde). That, in fact, is one of the beers that people are mixing with the cider the most.

From Citra Blonde, we've learned some things about that particular hop and others that are similar to it. We've figured out how to use them on the cold side and in a dry hopping technique that really brings out all the flavor and aroma without all the bitterness and astringency that sometimes comes through.

I don't think it will be unexpected for us to play with hops for Square Mile in the same way we do for Widmer Brothers' Rotator series.

Your partners in Milton-Freewater take an active role in what you're producing, but have also blended other fruits into ciders of their own. Has there been any experimentation with adding other fruits into the blend of Square Mile?

Casey: There's pear juice in there now. That was part of the development process. We call it the blendback or the add back, which is toward the end of fermentation when we add a little bit of juice for sweetening. We looked at adding back just apple juice, we looked at adding back different kinds of apple, we looked at apple and pear -- and the ones that had a small amount of pear in the add back performed best from a sensory standpoint.

We haven't looked at anything beyond apple or pear at this point, but that seems pretty ripe ground for some sort of limited release in the future.

-- Written by Jason Notte in Portland, Ore.

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Jason Notte is a reporter for TheStreet. His writing has appeared in The New York Times, The Huffington Post, Esquire.com, Time Out New York, the Boston Herald, the Boston Phoenix, the Metro newspaper and the Colorado Springs Independent. He previously served as the political and global affairs editor for Metro U.S., layout editor for Boston Now, assistant news editor for the Herald News of West Paterson, N.J., editor of Go Out! Magazine in Hoboken, N.J., and copy editor and lifestyle editor at the Jersey Journal in Jersey City, N.J.

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