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Cider’s Surge: Angry Orchard Takes Category To New Level, As Brewing Bigs Play Catch-Up

September 30, 2014

Cider, which has long taken a backseat to beer and RTDs in the U.S. market, is in the midst of a growth surge. Buttressed by the popularity of craft beer and Millennials’ attraction to new flavor-driven options, cider sales skyrocketed by 78% to 15.7 million (2.25-gallon) cases in 2013, according to Impact Databank. Cider’s domestic production trend mirrors this burgeoning growth. In Washington and New York, the two largest apple-producing states, there has been a sizable uptick in cideries, with Washington’s current count at 25, up from eight in 2012, and New York’s now at 29, up from five in 2011.

Boston Beer Co.’s Angry Orchard has been the primary force driving expansion in the cider segment since its launch in 2011. The brand has already captured 51% of the total U.S. cider market, reaching 8 million cases in 2013 and far eclipsing category stalwarts like Woodchuck and Strongbow. David Sipes, Angry Orchard’s cider maker, says the brand is drawing a diverse consumer audience. “Cider drinkers are a lot like craft beer fans; but we’ve found that cider appeals to both men and women equally—whereas beer typically skews 80% male—and most drinkers are under 40.”

At national retail chain Total Wine & More, president and co-owner David Trone has seen cider sales triple across all 107 of his stores, which are spread across 16 states. “Cider has expanded its role from a holiday-driven product to a year-round drink,” he notes. “It seems to be bridging the gap between beer and non-beer drinkers. We also see wine drinkers adding cider to their baskets as well.”

Jeffrey House, president, California Cider Co., says cider is benefiting not only from its association with craft and a strong Millennial following, but also as a gluten-free alternative to beer. California Cider Co. has been growing by 30% to 40% over the past few years and has had success with flavor options like its best-selling Ace Perry Cider—made from apples and pears—as well as its Pineapple Cider, which launched in March and has become its second-best-seller. In 2013, Ace grew 38.9% to 320,000 cases.

As cider consumption has taken off, it appears to be stealing share from light beer, a category that declined by 3.5% in 2013. “Ciders are probably eating into mainstream domestic beer sales more than craft beer sales. It’s our fastest growing category and at the same time we’re seeing domestic premium drop off—your Coors, Buds, Millers,” says Brian Bowden, vice president, spirits, beer, tobacco, and beverages, at West Coast retailer BevMo. “We probably have over 65 ciders now. Five years ago, we might have had a dozen.”

Meanwhile, AB InBev and MillerCoors have also increased their focus on cider. AB InBev released its first American cider—the low-calorie Michelob Ultra Light Cider—in May 2012, and the company has followed up with a new cider brand each successive year: Stella Artois Cidre debuted in May 2013, and Johnny Appleseed appeared in April of this year. MillerCoors has also been making inroads. In 2012, it acquired the fast-rising Crispin brand, an artisanal cider from Colfax, California that was folded into the brewer’s Tenth & Blake craft and import unit. In 2013, Crispin reached 795,000 cases, an 11.2% increase. This past spring, MillerCoors launched a new cider brand, Smith & Forge, billed as a crisp hard cider at 6%-abv.

While there have been ebbs and flows to the cider market in the past, both marketers and retailers believe the current progress is more than a short-term trend. “I see the future of cider being as big as craft. It could be as big as $5 billion or more by 2030,” says House at California Cider.

A full report on the surging cider market appears in the October 1 issue of Impact.

 

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