Move over IPA and that slew of microbrews. A new "it" drink is
on the rise around the U.S.: hard cider.
Though it's still a small niche -- less than 1% of the big
beer business -- U.S. retail sales of cider have nearly doubled
in a year, the highest growth niche in percentage terms.
Sales of craft beer and flavored beers are hopping too, though
traditional mass-produced beer has fallen flat the last few
years. Brewers embraced cider to capture a new market and appeal
to changing consumer tastes in alcoholic beverages.
Those tastes now include fermented apples, sometimes
"Today's consumers tend to look for quality and authenticity
and a connection to nature," said Dan Rowell, the CEO and
President of Vermont Hard Cider Co., which has been making
Woodchuck cider for more than 20 years.
Rising interest in natural food and drink, and even in things
like gluten-free diets, has boosted cider consumption, Rowell
says. But those aren't the only spurs.
"Consumers are willing to try new things if it's something
interesting, something different and something benefiting to
them," said Marc Riddick, a senior analyst at Williams
Cider rang up $261 million in U.S. retail sales during the 52
weeks ended May 18, up 94% from a year earlier, data from market
tracker Information Resources (IRI) show. The whole beer category
rose a bit over 4% to $30.6 billion.
The cider showing up on shelves and menus around the nation
includes brands from Angry Orchard and Woodchuck, the top two in
U.S. retail sales. In the middle are big-brewer launches Smith
& Forge and Stella Artois Cidre -- the former targeted at
"guys" who want "the sturdy side of hard cider" according to its
marketing materials, and the latter aimed at white-wine
Analyst Riddick says beverages are an affordable luxury
Americans are willing to splurge a little extra on, even in tough
"Trying a different type of craft beer or cider, you don't
need to go out and get a mortgage for that," he said, adding that
20-somethings are more apt than their parents to explore new
Cider's roots in the U.S. aren't new. The alcoholic drink goes
back to the days of the first settlers in New England. Cider
topped beer as America's drink of choice until the 1900s, when
German settlers to the Midwest grew large amounts of barley for
Prohibition in the 1920s sealed cider's fate, as the Volstead
Act limited the production of cider and prohibitionists burned
apple orchards. So the orchard owners planted trees yielding
sweeter, noncider apples instead.
Cider production resurged this century, in 2009 consisting of
6.9 million domestic gallons and 2.5 million imported for a total
of 9.5 million gallons, according to the Beer Institute. In 2013,
domestic production soared over 360% to 32 million gallons.
Imports doubled to 4.8 million gallons for total cider volume of
36.9 million gallons.
Angry Orchard's Appeal
Small-scale brewerBoston Beer (
), known for Samuel Adams Boston Lager, has also brought several
craft beers national and gained ground among cider drinkers with
its line of Angry Orchard ciders.
"Cider drinkers are a lot like craft beer fans; they are
looking for great tasting but refreshing beverages crafted with
quality ingredients," David Sipes, Angry Orchard cider maker,
told IBD via email.
Angry Orchard uses wine yeast for its cider and its Crisp
Apple flavor has a similar flavor profile to Pinot Grigio or
Pinot Blanc wine.
Boston Beer said that in the first quarter this year, its
depletions (distributor sales to retail) growth rose 34% over a
year earlier thanks to a boost from its Angry Orchard, Samuel
Adams and Twisted Tea brands. Core shipment volume rose 32% to
Boston Beer still gets the majority of its revenue from beer,
but according to a 2013 report from Goldman Sachs, Angry Orchard
is expected to make up 20% of Boston Beer's total volume by the
end of 2015.
U.S. retail sales for the No. 1 Angry Orchard brand family
rose 218% year-over-year to about $146 million in the 52 weeks
ended May 18, according to IRI.
Some large brewers are trying to follow Angry Orchard's plan
to entice non-beer drinkers. Danny Brager, senior vice president
of Nielsen's Beverage and Alcohol Practice Area, says 80% of wine
drinkers are also buying cider.
Belgium-based multinationalAnheuser--Busch InBev 's (
) Stella Artois Cidre, which went national in the U.S. this year,
isn't focused on attracting a typical beer drinker.
We're "going primarily for the white-wine drinker," Chris
Hanson, Stella Artois Cidre brand manager, said in a January
interview with CNBC.
Courting The Wine Crowd
The Stella Artois cider brand family reached nearly $9 million
in U.S. retail sales in the 52 weeks ended May 18, according to
Wine has been growing in popularity with millennials, the
generation reaching young adulthood around the turn of the 21st
Dutch brewing company Heineken International says that 51% of
female alcoholic-beverage drinkers don't drink lager and 26% of
total alcoholic-beverage drinkers don't drink lager, so the
company is expanding into cider flavors such as Bulmers Bold
Black Cherry and Bulmers Pressed Red Grape to try and capture the
Brager says roughly 75% of beer drinkers are also buying cider
and beer drinkers tend to skew more toward male consumers.
"There was always a perception that it was more of a female
drink, but we don't think that's the case. I would say that our
consumers are 50-50 male-to-female ratio," Vermont Hard Cider's
Both men and women seem to be enjoying the drink as cider's
volume explodes in the U.S. In the U.K., cider was always viewed
as a "manly" drink to enjoy at the pub after a long day at work.
S ome big brewers are taking note and targeting cider
specifically to men.
Molson Coors Brewing Co. 's (
) ads for its new Smith & Forge brand hard cider feature a
blacksmith and the tagline "Made Strong" to emphasize historical
cachet and appeal to men who might think of cider as too sweet or
feminine. The brand also tapped actor Jonathan Banks, known for
his tough guy role as Mike Ehrmantraut on AMC's "Breaking Bad,"
to help promote the drink.
Smith & Forge brand U.S. retail sales were just over $3
million in the 52 weeks ended May 18, according to IRI data.
Analysts are bullish on cider's growth potential. Millennials
have just started their alcohol purchasing and cider makers still
have room to grow.
As demand and competition increase, brewers are coming up with
new flavors to appeal to consumers and differentiate their
products. Angry Orchard's Cinnful Apple features notes of
cinnamon and its Elderflower flavor has floral notes. The
Woodchuck ciders include raspberry and Granny Smith apple cider
"For most of the last 23 years we were trying to convince
retailers and wholesalers to carry at least one cider," Rowell
said. "But now we have to convince them to carry our cider."
Woodchuck cider ranked No. 2 after Angry Orchard, at $41.3
million in retail sales in the 52 weeks ended May 18, IRI data
Liquor companies have considered clambering on the cider
bandwagon too. Louisville, Ky.-basedBrown-Forman (BFA) tested out
Winter Jack, a seasonal offering of its Jack Daniel's whiskey
seasoned with apple cider liqueur.
Could it, or something like it, go year-round? Answering an
analyst's query on a third-quarter fiscal 2014 conference call,
Brown-Forman CEO Paul Varga said "we're looking at it" and "aware
of the appeal of that flavor profile and those offerings,
particularly in the U.S. market these days."
The Beverages-Alcoholic group is ranked No. 44 out of the 197
industry groups IBD tracks.