Cider Effects - CSP Daily News

“While cider is very popular
right now, the key is balance.
Start with a brand or item
you trust and then expand as
sales expand.”
Cider Effects
With 166% growth and a bushel of new products,
beer subcategory is apple of c-stores’ eye
By Steve Holtz and Abbie Westra || [email protected], [email protected]
A
fter four years as a little cider
that could, Crispin Cider was
hoping 2012 would be its
breakout year, the year it would reach
beyond liquor stores and the on-premise
channel. And right on schedule, as 2012
neared, the Minneapolis-based cider
maker was getting courted by “quite a
lot of people, many fund-types, privateequity companies, some major beer
companies,” says Joe Heron, creator and
president of Crispin Cider Co.
It was MillerCoors that took home
the Crispin prize, then the third-largest
U.S. hard-cider producer, having grown
200% in 2011, compared with 26%
growth posted by the entire cider market.
It was one of the few “bright spots” in the
U.S. beer market, according to Chicagobased Technomic’s 2012 BeerTAB report
released in September.
This sale, announced in February 2012,
arguably was the launching point of one of
the fastest-developing alcohol-beverage
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Know Your Ciders
Woodchuck Cider from the Woodchuck Cidery in Middlebury, Vt., and Hornsby’s Hard Cider, owned by Ireland’s C&C Group, have been the biggest
names in hard cider in the United States for a long time, but that’s changing as major brewers get into the game. Here’s a primer on the new crop
of hard ciders coming to convenience stores.
Michelob Ultra
Light Cider
Owner: Anheuser-Busch
Description: A mellowed,
crisp sweetness compared to
traditional ciders
Packaging: Six-packs of
12-ounce bottles
Rollout: Available now in
most states
Strongbow
Owner: Heineken USA
Description: A crisp, premium
imported cider from the U.K.
with a clean, refreshing taste
Packaging: Six-packs of
12-ounce bottles and fourpacks of 16.9-ounce cans.
Rollout: First quarter of 2013
categories in recent memory: hard cider.
Among the key dates:
▶ November 2011—Irish cider company C&C Group, maker of Magners,
Bulmers and Tennent’s, purchases Hornsby’s Hard Cider brand from Californiabased E. & J. Gallo Winery.
▶ January 2012—Alcoholic cider
posts 26% growth in the United States.
▶ February 2012—MillerCoors buys
Crispin Cider.
▶ April 2012—Boston Beer introduces Angry Orchard Cider nationwide.
▶ May 2012—Anheuser-Busch
introduces Michelob Ultra Light Cider.
▶ August 2012—Heineken USA adds
Strongbow Cider to its portfolio.
▶ September 2012—C&C announces
plan to acquire of Vermont Hard Cider
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Angry Orchard
Crisp Apple
Crispin Natural
Hard Apple Cider
Owner: Boston Beer
Description: This crisp and
refreshing fruit-forward cider
mixes the sweetness of the
apples with a subtle dryness
for a balanced cider taste
Packaging: Six- and 12-packs
of 12-ounce bottles
Rollout: Available nationwide
Owner: MillerCoors
Description: A lightly
sparkling, crisply effervescent
cider with traditional English
bittersweet cider apples
Packaging: For c-stores,
four-packs of 16.9-ounce cans.
Retailers are encouraged to
break into singles.
Rollout: Fall 2012
Co., maker of Woodchuck.
And through it all, according to data
from Chicago-based SymphonyIRI
Group, both dollar and case sales of hard
ciders grew 166% in convenience stores
to nearly $10 million and 271,690 cases,
respectively, for the 52 weeks ending Sept.
9, 2012.
Cider Goes Big
The two-pronged attack the above rollouts have in common: One, capitalize on
the growing popularity of ciders; and two,
use convenience stores to do it.
“We were not focused on the channel up until now,” says Heron, a South
African (“Home to the world’s greatest
rugby players!”) living in Minneapolis
and selling cider brewed in California.
“It’s MillerCoors helping us do that much
more forcefully than we were doing.”
Previously, Heron’s Crispin was
focused on what he calls “variety-seeking”
retailers, places with a broad selection
that drew in more adventurous drinkers.
“We started in liquor stores, independent grocery, on-premise and the natural
channel,” he says. “We had always planned
in 2012 to start expanding the footprint
beyond that, into national chain grocery
stores and into c-stores.”
Similarly, Heineken USA parent
Heineken N.V. has had Strongbow in
its global portfolio for many years. The
product maintains nearly 25% global
market share in alcoholic cider, according
to Monique Acevedo, vice president of
innovations for Heineken USA, White
Hard Cider Brands
C-store sales, 52 weeks ending Sept. 9, 2012
Brand
Dollar sales PCYA* Case sales PCYA*
Woodchuck
$5.15 million
74% 141,049 72%
Angry Orchard
$2.42 million NA
68,693
NA
Michelob Ultra Light Cider $685,250 NA 22,019 NA
Hornsby’s
$524,725 14% 14,009 5%
Crispin
$407,491 1,155% 6,705 1,188%
McKenzie’s
$164,248 1,355% 4,637 1,325%
Magners
$156,674
23% 3,325 20%
Spire Mountain
$84,301 5,867% 2,166 6,862%
Harpoon
$78,140 2,156% 2,209 2,173%
Strongbow
$51,123 38% 1,207 26%
Source: InfoScan Reviews, SymphonyIRI Group data
* Percent change from a year ago
Plains, N.Y.
The U.K. import was previously distributed in the United States through the
Vermont Hard Cider Co., but the recent
attention to hard cider led Heineken
USA to bring it into its larger system.
Strongbow now “complements our existing upscale portfolio in the U.S., adding a new flavor profile,” Acevedo says.
“Convenience stores can capitalize on
the growing popularity of cider through
increased distribution and promotion of
the category.”
Meanwhile, The Boston Beer Co.
began distribution of ciders from its new
subsidiary Angry Orchard Cider Co. earlier this year, with c-stores as one of its
retail targets.
“In the fall of 2011, we released Angry
Orchard to a few select states, and based
on the response from our drinkers, we
decided to release our cider nationally
in the spring of 2012,” says David Sipes,
cider maker for The Boston Beer Co.,
which now has dedicated cider makers
and facilities reserved for producing its
three main varietals as well as two limited
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releases in the Cider House Collection.
The most recent cider news of C&C’s
planned acquisition of Vermont Hard
Cider Co. indicates the European giant
has its sights set on the U.S. market,
which is not nearly as developed as it is
across the Atlantic.
And then there’s Gregor y Hall,
founder of Virtue Brands cider in Chicago and former brewmaster for Goose
Island Beer Co. for 20 years. While he
doesn’t expect to see his ciders in c-stores
any time soon, Hall can envision up to
six slots dedicated to ciders in the typical
c-store cold vault—and pretty quickly.
“Right now there are really good
brands that were set up to do convenience,” says Hall, whose cider can be
found only on tap at restaurants and
bars in Chicago. The company plans to
expand to New York and Michigan by the
end of the year.
One major difference between cider’s
growth and craft beer’s trajectory is how
quickly the major players got into the
game—which triggered the big sales
growth. Hall expects cider to continue to
“grow like crazy” until it gets to 1% to 2%
of total beer sales, then taper off to a “low
double-digit growth.”
“It’ll never get to the 15% you’ve got in
England or 10% in Ireland, but if you get
to 5%—where it is in most of the rest of
Europe—that’s almost as big as craft beers
now [in the U.S.]. That’s a lot of growth.”
Tracking the Cider Consumer
So why is cider hitting new heights with
American consumers? While he didn’t
expect such fast growth, Hall believes it’s
long overdue.
“If you look at the growth in the last
10 to 20 years in every other drink—
water, coffee, wine, spirits, beer, craft
beer—everything has increased both in
terms of the number of suppliers out
there, varieties have increased, and price
points have gone up,” he says. “Cider is
kind of the last one left.”
Cider folds nicely into the local/
regional and farm-to-table trends found
across food and beverage categories. It
offers a less-intense flavor than many of
the hop-blasted craft beers on the market. And cider is naturally gluten-free,
thus swept up in the growing tsunami of
gluten-free products.
“Cider is the ultimate bridge category.
It sits right there in the middle between
better beer and wine, and that’s very
unique,” says Heron. “It represents drinking variety. … It has an adult profile that
is unique in terms of its ability to refresh.”
Unlike beer, hard cider is “uniquely
gender neutral,” he says.
Acevedo agrees: “Strongbow appeals
to both men and women who like to
explore modern and exciting drinks, and
are looking for great-tasting and refreshing alternatives.”
Sulu Jaffer, owner of Intown Market
and Midtown Market in Atlanta, esti-
“Like craft-beer drinkers, we see that
cider drinkers have a genuine interest
in quality and discovery.”
mates he sees three female cider customers to one male customer, and that the majority of all his cider customers are older
than 35.
And they’re not necessarily brand-loyal. Given the variety
available, the regional ciders popping up and the limited
releases by everyone from Angry Orchard to Crispin, cider
drinkers, like their craft-beer brethren, like to explore. Jaffer
has added nine cider SKUs since the beginning of the summer to his already robust beer and wine program. The lineup
includes top sellers Original Sin and Ace Pear, Crispin—which
is “doing very well”—Magners Original and Pear, Sir Perry,
Crown Valley, Strongbow and Woodchuck.
“The cider drinkers will venture away from their particular
cider into new ciders,” Jaffer says.
A-B, meanwhile, is aiming to bring a wider and longer-term
audience to the cider category. “While
the popularity of ciders has increased
recently, we found that a large percentage
of consumers still viewed them as either
too heavy, too sweet or both, limiting the
category’s potential to a seasonal beverage for the fall and winter,” says Tony
Gaines, vice president of small format
for Anheuser-Busch. “We believe the
category has true year-round potential
as an alternative to flavored malt beverages, white wine and champagne, and these insights led to the
development of Michelob Ultra Light Cider.”
Some credit should also be given to the growth in craft
beer varieties and sales—perpetuating consumers’ desire to
experiment.
“Cider makers and drinkers alike are looking for a sophisticated, versatile beverage and are exploring new flavors and
experiences that cider provides,” says Sipes. “Like craft-beer
drinkers, we see that cider drinkers have a genuine interest in
quality and discovery.”
Wait and See
The past year’s rollouts and acquisitions have indeed expanded
the spectrum of ciders on the market. Hall sees Michelob Ultra
Light Cider appealing to the flavored-malt-beverage customer,
while brands such as Crispin and Angry Orchard will attract
craft-beer drinkers and consumers who’ve experienced the
cider-drinking culture of England and Ireland.
With most of these hard-cider entries coming to convenience
stores with a craft-beer-level price, A-B saw an opportunity to
expand into the category with a familiar brand name and a
lower price.
“While cider is very popular right now, the key is balance,”
Gaines says. “As with any new category, start with a brand or
item you trust and then expand as sales expand.”
Other manufacturers generally agree, encouraging retailers
to consider each brand’s attributes and price point, as well as a
store’s customer demographics. In fact, Heron openly admits
Crispin Cider isn’t right for every retailer.
“We’re not going to be sold at a very low-income c-store,” he
says. “That’s not an environment that would be conducive for
either us or the store owner. We’re looking at the slightly more
adventurous drinker and his store universe.”
So far, many retailers who have expanded their cider offering
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are in wait-and-see mode.
“It’s almost too early to tell,” says Scott
Castle, vice president of retail operations
for Boyett Petroleum, a 42-store chain
based in Modesto, Calif., with a healthy
craft-beer business. He added three SKUs
from Angry Orchard in July and is watching sales through the rest of the year. Sales
are increasing, he explains, but they’re
starting from zero—so growth needs to
be taken with a grain of salt. Cider currently makes up about 0.07% of the total
beer category for Boyett.
Erwin Oil Co., Durham, N.C., which
also has a strong craft-beer program, is
watching cider sales carefully, too. Richard Shortt, retail sales operation manager,
added Michelob Ultra Cider, Magners,
Crispin and Angry Orchard this year in
select stores after watching cider’s growth
at restaurants and bars.
It’s too early to tell how sales are, but
he’d guess it’s a fairly small percentage:
“Even talking with our beer reps, it seems
like the growing segment seems a lot
more on-premise than retail right now.
I’m hoping that will topple over to us.”
Retailers in the right market, such as
Jaffer, may go gangbusters with cider.
Cider’s share of alcohol beverage sales
at Jaffer’s stores is still below 10%, “just
because my selection is huge,” he says.
“I have 200 different craft beers and 10
to 15 different cider [SKUs]. I’m around
8%, 9% in sales, without looking at any
concrete numbers. But it’s grown from
last year where it was around half that
number.”
A convenience store housing 200
SKUs of any one subcategory, let alone
10 to 15 sub-subcategories, is indicative
of the changing market.
“Everybody is so willing to try something new now. The manufacturers are
willing to do it, the customers are willing
to do it, the retailers are willing to do it,”
says Shortt. “It just means you have to set
your whole category more often because
nothing lasts a year!”
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