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U.S. Cider Segment Showing Torrid Growth

August 8, 2012

Although cider remains a niche segment in the U.S. market, sales are accelerating rapidly, rising 23% to 5.7 million cases last year, according to Impact Databank. Five cider brands—Woodchuck, Strongbow, Magners, Crispin and Ace—earned Impact “Hot Brand” honors in 2012.

This growth is triggering a flurry of new product launches and brand activity from craft beer players like Boston Beer Co., which rolled out its Angry Orchard label nationwide in April, and brewing giants like Anheuser-Busch, which released its first American cider—the low-calorie Michelob Ultra Light Cider—in May.

“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, 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. 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.

Vermont Hard Cider is also the U.S. marketer for Strongbow ($9.49-$9.99 a six-pack), a single-expression cider brand owned by Heineken. Like Woodchuck, Strongbow experienced double-digit growth last year, rising 16.1% to nearly 800,000 cases. The U.K. import is up 18% for 2012’s first half and is projected to reach at least 900,000 cases by the year’s end, says Williams.

An Irish import from C&C Group, the Magners cider brand, was up 24.7% in 2011 to 580,000 cases and has also ramped up its U.S. focus with several new innovations, including the March launch of its blended Magners Selections range, which debuted with a berry- and peach-infused cider. Late last year, C&C Group bolstered its presence in the cider category with the addition of Hornsby’s—acquired from E&J Gallo for $23 million—making C&C the second-largest cider producer in the U.S. market after Vermont Hard Cider.

A relative newcomer, Crispin cider, made waves in February, when the fast-rising brand was acquired by MillerCoors, joining the brewer’s Tenth & Blake craft and import unit. Produced in Colfax, California, Crispin is currently trending at over 300% growth each month and is expected to hit 1.4 million cases by the end of the year, according to Shane Rietow, Crispin’s senior vice president of sales. Crispin includes a core Original (which is priced at $7.49 a four-pack and comprises around 40% of sales), Brut and Light expressions, U.K. import Browns Lane, an Artisanal Reserve series, a variety of limited releases and its Cidre Blanc boxed offering. Crispin also produces the pear cider brand Fox Barrel, which recently added Rhubarb & Elderberry and Blackcurrent & Ginger expressions, as well as a Pomegranate & Pear boxed cider, to its portfolio. “Now that we’re with Tenth & Blake, we’ve put muscle behind Crispin,” says Rietow, adding that the brand recently achieved national distribution. “I think 2013 will be our breakout year.”

Looking ahead, 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.”


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