Boston-based Downeast Cider is following the more-is-more philosophy when it comes to innovation in 2024.
“We see very clearly the trend of high ABV,” chief operating officer Max Keilson told Brewbound. “Looking at the data this past year, overall cider grew modestly as a segment, but if you really look at what drove that growth, it was entirely ciders at or above 8% [ABV].”
The cidermaker’s big bet for this year is the Overboard family, an 8% ABV line of unfiltered ciders in three flavors: Overboard (apple), Tropical (pineapple and sweet mango) and Mixed Berry. The Overboard line will roll out in 12 oz. can variety 9-packs and 12 oz. can 4-packs of Overboard.
In Massachusetts, Downeast will sell 19.2 oz. single-serve cans of Overboard, due to federal standards of fill regulations that prohibit higher-ABV ciders from being sold in large-format, single-serve containers across state lines, Keilson said.
Each of the Overboard offerings have been trialed with visitors to Downeast’s East Boston taproom during the last year, Keilson said.
“Every single one of them during the time period they were available were our top-selling item, which was awesome.” he said.
Higher ABV offerings have performed well for cidermakers elsewhere in the country. They accounted for 16% of overall cider dollar sales, according to 3 Tier Beverages consultant Mary Mills, who discussed the cider industry’s opportunities at the American Cider Association’s CiderCon last month in Portland, Oregon.
Imperial ciders recorded the largest share gains in 2023, with ciders between 7% and 9.9% ABV gaining +6.9% share year-over-year (+$34.8 million) and ciders 10%+ ABV gaining +0.2% share (+$1.2 million), Mills said, citing NIQ off-premise data.
But that trend has largely been concentrated on the West Coast, particularly for dominant Pacific Northwest brands 2 Towns and Schilling Cider. In the highly regionalized cider industry – where regional brands now account for 55% of off-premise dollar sales, according to Mills – a gap in a large regional player’s portfolio can mean a gap in the market entirely.
As Overboard rolls out to retailers this week, Downeast is filling the higher-ABV void, to “great response from chain partners,” Keilson said.
”With us being the regional player in the Northeast, there just hasn’t been a high ABV offering in the Northeast,” he said. “A lot of retailers have been really excited, feeling like, ‘Oh, we’ve been on the outside of this trend that is clearly resonating with consumers, but we have the opportunity to participate.’
“For us as well, we feel the same way, very bullish on high ABV ciders in the Northeast,” he continued.
Downeast enters 2024 with the wind at its back. In 2023, which Keilson described as an “overall pretty good year,” Downeast’s volume grew +10% and revenue increased +17%. The company far outperformed the cider segment, which recorded +1.9% dollar sales growth and volume declines of -2.3% YoY in multi-outlet grocery and convenience stores, mass retailers and liquor stores, according to NIQ.
Elsewhere in Downeast’s cider portfolio, the company has made “little portfolio optimizations” that have delivered “more modest growth.” Downeast made two changes to its seasonal lineup in 2023 – the spring offering switched from grapefruit to pomegranate (“We flew through it,” Keilson said) and the summer offering changed from pineapple to peach mango, which resulted in 9,000 incremental cases.
But even with the introduction of Overboard and seasonal changes, Downeast is keeping its eye on the engine that drives the company’s sales: Original Blend, its 5.1% ABV unfiltered flagship.
Downeast hasn’t shied away from innovating in the fruit-flavored cider space. The company launched Blackberry in 2021 and Strawberry in 2022, both of which captured some of Original Blend’s draft sales, but in 2024 the company is redoubling its focus on the flagship and converting berry draft lines to Original Blend.
“What we’ve seen is really clear: Original Blend far and away has the best rate of sale for us on draft, best rate of sale for us in package in the off-premise,” Keilson said. “We’ve really leaned more heavily into it, and it’s a pretty healthy growth driver for us this past year.”
Original Blend accounts for 38% of Downeast’s total business and last year increased volume +5% and dollar sales +10%. The flagship is Downeast’s priority in the on-premise, which is “pretty healthy” and “generally makes up right around 40% of the business,” Keilson said.
“Most of” Downeast’s portfolio is available in kegs and “seasonals and limited items” make up “a larger share,” but the focus is on Original Blend.
“It’s a significant rate of sale disparity between Original Blend and our next best-selling draft items, our seasonals,” Keilson said. “Generally when a bar puts Original Blend on draft, it becomes one of their best-selling items. It’s a consistent focus for us.”
Overall, cider accounts for 93% of Downeast’s volume. Beyond cider, the company has dabbled in spirits-based, ready-to-drink (RTD) canned cocktails, which have been discontinued, and in its Slushie flavored malt beverage (FMB) line, which has been a runaway success.
“We did a tiny taproom run [of Slushie] in 2021,” Keilson said. “We did a full market launch in 2022 that we just didn’t have nearly enough product for. We far underestimated demand, so this past year, we really leaned more into it, and it was more of a full market launch.”
In 2021, Downeast described Blue Slushie – then a taproom-only offering – as “just like a blue slushie, but without the blue tongue, or brain freeze, it’s really a rare win-win-win.”
The core Slushie family (5% ABV) has since expanded to include Red (cherry) and White (lemon), which rolled out in a variety 9-pack with Blue. Extra Hard Blue Slushie (8% ABV) debuted in May 2023 in 19.2 oz. single-serve cans.
In 2023, sales of the FMB line increased +300% off its small 2022 base, Keilson said.
“We had our forecast for it, we produced to that forecast,” he said. “We shipped our initial shipments and then everyone was like, ‘Hey, we know we agreed to the next order of three pallets – can we actually get a full truckload?’ and we’re like, you can’t. We don’t have enough.
“So, a good problem to have, I suppose,” he continued. “Much rather meet the demand.”
Downeast added North Carolina to its footprint in 2023, its first new market in three years. No new markets are planned for 2024, as the company aims to deepen roots in its existing states.
“A big part of our strategy is really geographic depth,” Keilson said. “We don’t want to go duke it out with 2 Towns and Schilling in the Pacific Northwest when we have low double-digit share in New York and New Jersey – plenty of room to grow in our backyard.”