Colorado’s Stem Ciders is heading east.
The Denver-based cider company has acquired Durham, North Carolina-based Black Twig Cider House from owner Matthew Beason.
Financial terms of the deal were not disclosed, however, Stem co-founder and CEO Eric Foster told Brewbound that the transaction closed in late December. He added that Stem Ciders is financing the purchase — which includes the Black Twig brand as well as a lease on its 2,200 sq. ft. space, with renewals for up to 12 years — with cash flow from the business.
“It’s a great state for craft beer, and it’s a great state for craft cider,” Foster said of North Carolina.
Despite acquiring the Black Twig brand name, Stem Ciders is rebranding the Durham company’s 60-seat restaurant as “The Northern Spy,” which is slated to reopen in late spring.
The North Carolina location is Stem Ciders’ third retail outlet, joining its original taproom and cidery in the River North District of Denver, and its 1-year-old Acreage cider house, farm and restaurant in Lafayette, Colorado.
In addition to cider, Foster said The Northern Spy will serve a curated program of beer and cocktails. It will also offer daily lunch and dinner service, and sell cider for on- and off-premise consumption.
Foster told Brewbound that Stem would not be producing cider at The Northern Spy. Instead, the company will ship its offerings from Colorado and distribute them through Harris Beverage in the Durham area. He added that the company plans to expand its distribution statewide via the Anheuser-Busch wholesaler network.
As part of the deal for the restaurant, Beason has joined Stem Ciders as its North Carolina sales rep. Foster described Beason as a “long-time friend” who was looking to exit the restaurant industry and enter the cider space.
“He’s always been a curator of ciders and a restauranteur focused on ciders and somebody who’s taken on leadership roles throughout the country as a cider evangelist,” Foster said.
Currently, Stem Ciders ships its offerings throughout Colorado, as well as to California, Oklahoma, Kansas, Missouri, Wisconsin, Illinois and now North Carolina. According to Foster, Stem is considering future expansion along the East Coast but plans “to take things a little slow.”
“We’re going to start in North Carolina and move from there,” he said.
Nevertheless, Foster said the company’s expansion strategy would mirror the deal for the Black Twig, adding taprooms and restaurants in new markets. “A targeted distribution surrounding retail and hospitality concepts is very much a focus for us,” he said.
Stem Ciders’ East Coast expansion comes as sales of regional cider brands increased 22 percent in 2018, according to the U.S. Association of Cider Makers. Meanwhile, market research firm IRI reported that off-premise dollar sales of cider were up 9.6 percent through the first four weeks of 2019.
Last year, Stem Ciders produced about 10,000 barrels, up roughly 3,000 barrels over 2017 levels, Foster said. He attributed the growth to increased sales in Colorado as well as expanding the company’s distribution to California.
“Frankly, we’re only scratching the surface there,” he added.
In 2019, Stem Ciders expects to sell about 15,000 barrels of cider, as the company dives deeper in California and adds points of distribution in North Carolina.
Stem Ciders grew in 2018 despite the fact that it does not sell a rosé-style product, which proved profitable for other cider companies, including Boston Beer Company’s Angry Orchard brand.
“We don’t have a rosé on the market, and we’re up substantially, and we’re forecasting to be up again this year,” Foster said. “Some of the things were looking at for innovation are lower ABV ciders, and ciders that are either able to be put into cocktails or ciders that are sort of cocktail derivatives.”
Meanwhile, Foster said Stem Ciders’ 2-year-old sales support arrangement in the state of Colorado with Fort Collins-based Odell Brewing continues to benefit both companies. For Odell, he said selling Stem Ciders’ products gives them an offering they didn’t previously have in their portfolio.
“And for us, we’re utilizing a network of well-ingrained and very professional sales personnel throughout Colorado that would have otherwise taken us years, if not decades, to develop,” he said.
A press release with additional details on Stem’s acquisition is included below.
Stem Ciders acquires Black Twig Cider House, rebrands as The Northern Spy
COLORADO| February 2019— Colorado craft cidery, Stem Ciders, announces it has acquired Black Twig Cider House in Durham, North Carolina. Joining the ranks with Stem’s original taproom and cidery in Denver’s RiNo district and the expansive Acreage cider house, farm, and restaurant in Lafayette, Colorado, the restaurant and bottle shop located at 2812 Erwin Road, Durham, will be rebranded as the third Stem Ciders property, under the name ‘The Northern Spy.’
The newly renovated 60 seat restaurant, bar, and bottle shop located in the neighborhood that is home to Duke University will feature an expertly curated beverage program that includes draft and bottled cider, beer, wine, and cocktails. Nearly half of the 2,200 sq. ft. space will be dedicated to an extensive to-go bottle program, with a strong focus on showcasing the goods from local and regional producers.
Leading the concept’s culinary vision is Chef Eric Lee, Executive Chef at Acreage in Lafayette, who will bring to The Northern Spy the sourcing ethos and values at Acreage by Stem Ciders: quality, style, and tradition, with a commitment to local, sustainable, and fair food. The Northern Spy is expected to open in late spring, 2019, with daily lunch and dinner service. To learn more follow along online on Instagram at @northernspync and @stemciders.
About Stem Ciders
Stem Ciders is a craft cidery based in Lafayette, Colorado. Founded in 2013 by Eric Foster and Phil Kao, two passionate entrepreneurs with a deep appreciation for craft, and a strong commitment to reviving the cider tradition. Stem has created a reputable and recognizable brand in the diverse category of craft cider, and as such, has received critical acclaim and awards at both the local and national level. To learn more about Stem Ciders, visit stemciders.com