After discontinuing its experimental line of “Side Trip” ciders, New Belgium Brewing Company has signed an agreement with Seattle Cider Company to distribute the company’s products throughout the greater Fort Collins, Colorado, market.
New Belgium currently self-distributes beer in the area, and routinely has additional space on its delivery trucks, brewery spokesman Bryan Simpson told Brewbound.
“When they [Seattle Cider] were trying to break into the market, it seemed like a nice solution for filling up those trucks, using them efficiently, and getting these guys some presence in the Fort Collins market,” he said.
For his part, Seattle Cider Company founder and CEO Joel VandenBrink — who also founded Two Beers Brewing and sold both businesses to France’s Agrial Group last September — told Brewbound that discussions with New Belgium began about a year ago.
Two Beers Brewing products are not included in the arrangement, however.
“The deal we have set up is just like any other distributor,” he explained. “We offer them our products at an FOB [freight on board] price, which is pretty standard for distributors, and then they mark it up at their percentage to make money on it as well.”
New Belgium’s “Brewery Direct Services” team will be tasked with delivering Seattle Cider’s year-round, limited release and seasonal offerings in 16 oz. can packages, 22 oz. bottles and kegs to bars, restaurants and liquor stores throughout Fort Collins, Simpson added.
Seattle Cider has distributed its products in the nearby Denver market since March 2016, and VandenBrink said sales in that area are up 75 percent versus last year.
“We saw some further potential there [Colorado],” he said.
The first round of Seattle Cider offerings arrived in Fort Collins last week, and additional products will ship on an “as needed” basis, VandenBrink added.
The new arrangement will give New Belgium’s sales force access to a noncompetitive product from outside of its beer portfolio as it looks to compete more effectively for shelf space and tap handles in its home market.
The move comes nearly one year after fellow Fort Collins craft beer company Odell Brewing cut a similar deal with Denver’s Stem Ciders. Under that arrangement, Stem Ciders agreed to pay Odell a fee in exchange for access to the beer company’s sales force and inventory and customer relationship management software programs.
Odell Brewing’s chief sales and marketing officer Eric Smith told Brewbound that the agreement has since extended into Illinois and Kansas City, Missouri, where the two companies share wholesalers — Breakthru Beverage and North Kansas City Beverage, respectively.
For Odell, which also self-distributes in the Fort Collins market, the deal with Stem Ciders has given the brewery’s sales representatives an additional tool when trying to earn new retail placements.
In Chicago for instance, where the two companies both launched with Breakthru Beverage earlier this year, the combined sales effort opened up discussions with “bars that carry cider on a regular basis,” Smith said.
“We’re offering more of a breadth of options to consumers,” he said.
Meanwhile, the partnership between New Belgium and Seattle Cider comes more than a year after New Belgium first released Side Trip Dry Cider and Side Trip Semi-Dry Cider in various test markets, such as Asheville, North Carolina, where the company opened a second production facility.
However, New Belgium quietly discontinued the line after various obstacles — such as a Colorado alcohol law that prohibits licensed beer companies from producing beer and hard cider in the same facility — proved too burdensome for the beer maker to continue with additional cider production runs.
“We would have to come up with a different facility structure, or we would have had to contract it,” he said. “None of it was all that appealing.”
Also unappealing may have been declining cider sales. Year-to-date through July 16, dollar sales dipped 4.3 percent while volume sales declined 6.9 percent, according to market research firm IRI Worldwide, which tracked sales in U.S. multi-outlet and convenience stores.
Seattle Cider, however, appears to be bucking those trends. This year, the company anticipates selling 24,000 barrels of cider, up from nearly 18,000 barrels in 2016. According to VandenBrink, sales of Seattle Cider are up 33 percent on the year.