Regional cideries grew at more than triple the rate of the total cider segment at off-premise retailers in 2020, American Cider Association executive director Michelle McGrath shared during the trade organization’s annual CiderCon event earlier this year.
“Off-premise channels grew 9% for total cider — regional brands grew 33%,” she said. “Off-premise chains don’t capture all of our members, but they do provide a useful measuring stick.”
Nevertheless, scan data for cider can be misleading. Off-premise sales of the segment’s largest brand, Boston Beer Company’s Angry Orchard, have been decelerating (-5.5% year-to-date through March 13, before the calendar cycled the inflated off-premise sales from the March 2020 stock up shopping shift forced by the pandemic, according to NielsenIQ). But, as McGrath mentioned, regional brands have picked up steam.
“Hard cider as a category, it’s never been in bad health,” said Lindsay Dorrier, brand manager for Bold Rock, the second largest cider maker in the U.S. “There’s been a couple years where maybe it’s contracted slightly, but a lot of that is driven by some of these national brands that were really beer brand diversification that have unfortunately not had quite as robust business over the last couple of years.
“The regional cider brands are what is really driving some robust growth and enthusiasm for hard ciders,” he continued.
Four of the top six cider brands NielsenIQ tracks have grown by a quarter or more year-to-date through March 13 in off-premise retailers:
- Bold Rock (part of the Artisanal Brewing Ventures rollup) — +30.9%;
- 2 Towns Ciderhouse — +33.4%;
- Ace Cider — +39.8%;
- Downeast Cider House — +26.6%.
Amid downturns in sales, Molson Coors Beverage Company discontinued two of its nationally distributed hard cider brands, Crispin and Smith & Forge, a company spokesperson confirmed. The company launched Smith & Forge in 2014 as a decidedly masculine competitor to Angry Orchard, and acquired Crispin in 2012.
Off-premise dollar sales of Crispin’s top three SKUs — its variety pack, rosé and original offerings — have declined by 79.3%, 87.5% and 55%, respectively, for the 52-week period ending March 21, according to market research firm IRI.
Dollar sales of segment leader Angry Orchard’s flagship offering Crisp Apple have increased 12.8% for the 52 weeks ending March 21, but sales have decelerated in the most recent four-week period to -4.5%, according to market research firm IRI.
The difference between national and regional cider — and regional cider’s retail success — hasn’t caught on with decision-makers in the beverage alcohol ecosystem yet, Aaron Sarnoff-Wood, co-founder of Corvallis, Oregon-based 2 Towns, told Brewbound.
“A lot of wholesalers, retailers think of themselves as ‘beer guys,’ and a lot of them have overlooked cider as a category for a long time,” he said. “We like to joke that we’re the best kept secret in the craft industry.”
In 2020, 2 Towns sold 770,000 case equivalents (about 56,000 barrels) across its eight state footprint (Oregon, Washington, Idaho, Montana, California, Hawaii, Alaska, Arizona and in Chicago and Minneapolis). The company is projecting 2021 sales between 900,000-1 million case equivalents (roughly 65,300 to 72,500 barrels).
“We’ve been very slow and deliberate in our territory expansion,” Sarnoff-Wood said. “As we’ve grown as a company, capacity has always been one of our constraining factors, and we want to make sure that all the markets that we’re in, that we can service those markets as best as we possibly can, and that we’re an active component for the communities in those markets as well, and that means generally a ground salesforce.”
When the COVID-19 pandemic forced bars and restaurants to close last spring, 2 Towns redeployed its on-premise sales reps into the off-premise channel.
“We found that a lot of our wholesalers had reduced staff,” Sarnoff-Wood said. “They pulled a bunch of people off the streets, and were trying to find ways to reduce exposure and reduce costs, and we found just by even being in the market and merching our own brands, it was really a big help.”
In addition to redirecting its sales team with an off-trade focus, 2 Towns also developed a key account management team to maintain contact with retailers.
“It really helped bring us closer to the head of the table,” Sarnoff-Woof said.
Prior to the pandemic, 2 Towns’ sales skewed toward the off-premise, hovering between an 80/20 or 70/30 split, he said. During the pandemic, the ratio reached 95/5.
Company leadership sensed early on that the pandemic would cause major disruptions to the on-premise channel and secured can contracts. Now, 2 Towns is installing a new packaging line to keep up.
“We’d always invested heavily in the off-prem,” Sarnoff-Wood said. “Our scale allowed us to be a little bit more active in that category, plus those sales are sticky compared to on-prem, where you go and you sell the keg and then it kicks, and then you’ve got to go back and sell another keg.”
2 Towns recently launched Cosmic Crisp, a new flagship offering named for the new apple varietal it contains. At 8% ABV, 2 Towns would not have been able to launch Cosmic Crisp in its 375 mL can packaging had the Alcohol and Tobacco Tax and Trade Bureau (TTB) not changed its policy about package sizes for wines and ciders stronger than 7% late last year, opening the cider market to stronger offerings.
“Right now, the biggest movers are some of the higher ABV ciders,” Sarnoff-Wood said. “I think there’s an aspect of novelty to that, as they’re relatively new entrants into the market, but also fruited ciders continue to rule the day.”
The fruited cider segment was among the top five growth styles in the craft segment of the beer category in multi-outlet off-premise retailers for the 26 weeks ending January 10, Fintech director of customer success Anna Nadasdy shared during a CiderCon presentation.
“We do have really significant style movement with fruit-flavored cider and it’s really making gains,” she said.
Fruited ciders account for 12% of cider dollars, second only to apple cider (52% of cider dollars), according to IRI data shared by Nadasdy. Dollar sales of the top 12 selling fruited ciders crested $17 million for the six-month period ending January 10, nearly tripling dollar sales during the same time frame the prior year. Bold Rock’s Pineapple Cider was so successful as a seasonal variety that the company made it a year-round offering, Dorrier said.
And larger players have also taken notice of the fruited cider trend. Boston Beer’s Angry Orchard launched Peach Mango and Strawberry ciders nationwide earlier this year, giving in to a trend that it had previously eschewed.
The largest declines within cider came from the “other” segment, which includes rosé and hopped offerings. Rosé contributed “almost entirely” to the segment’s 3.38 dollar sharepoint loss within cider, Nadasdy said. Apple cider, the segment’s leader, lost 2.43 sharepoints.
Meanwhile, fruit-flavored cider gained 3.16 sharepoints, and hard kombucha, which IRI tracks in the cider segment, gained 3.4 sharepoints.
Cider consumers are also turning to cans at higher rates, Nadasdy pointed out. Cans now account for 29% of cider sales, which Nadasdy adjusted to remove bottle-heavy Angry Orchard and hard kombucha.
“Cans are gaining share at 1.5 times the rate that 6-pack bottles are losing share,” she said.