Editor’s note: This article appeared in the December issue of BevNET Magazine.
As cider offerings from larger producers have hit a dry spell, those from smaller, regional producers are gaining market share as consumers continue seeking out sweeter alcoholic beverages.
For proof, look no further than Virginia’s Bold Rock Hard Cider, which has seen year-to-date dollar sales (through Sept. 25) grow more than 100 percent, to nearly $8 million, according to market research firm IRI Worldwide. That ranks Bold Rock as the sixth-largest cidery – the top five sellers are all national brands – by market share, even though the company’s products are distributed in just nine states. This year, Bold Rock will sell about 45,000 barrels (up 80 percent year to date) of cider, and in 2017, the company expects to produce about 65,000 barrels.
“Where there’s a strong local cider, the hard cider trends aren’t as bad,” Jeff Liebhardt, Bold Rock’s senior vice president of sales and marketing told BevNET.
“Unfortunately the combination of all the local craft can’t make up that volume,” he added, noting declines for the Boston Beer Company-owned Angry Orchard, which currently has about 56 percent market share, according to IRI Worldwide.
Meanwhile, Bold Rock is building its foundation in Virginia – where it operates a production facility and two retail outposts – and in North Carolina, where it has a second cidery. And Liebhardt believes still room to grow in Bold Rock’s backyard.
“In Virginia, we still only have a 36 share of the cider category,” Liebhardt said. “We had an 8 share two years ago. We think we can get to a 60 share in the state in the next few years.”
Meanwhile, Blake’s Hard Cider, another regional producer located in Michigan, is also experiencing “high double-digit to triple-digit growth” throughout its territory, co-owner Andrew Blake said.
The company has three Michigan locations that total 600,000 visitors annually, Blake said, and the cider maker will produce about 23,000 barrels this year. He said Blake’s has “grown responsibility,” but he sees an industry still in its “teenage years, trying to figure ourselves out in the American market.”
“The biggest struggle” for regional producers is convincing distributors and retailers that “a high-priced 6-pack of cider will sell” beyond the $6.99 to $7.99 price point set by mass-produced cider.
“If we’re going to continue to make the quality stuff that we’re making, we need to be at this price point,” said Blake, whose 6-packs sell for around $9.99.
“There’s no water that goes into our product,” Blake said. “It’s juice. It’s more expensive. Every ounce of liquid comes from the apples.”
Despite the higher price point for many regional brands, consumers are trading up from marketplace leaders like Angry Orchard and Woodchuck, according to Kris Nelson, founder of Citizen Cider. The Burlington, Vermont company launched in 2011 and is on track to produce more than 16,000 barrels of cider this year.
“People recognize that we’re not creating this quick little brand with an easy flavor,” Nelson said. “We’re creating something deeper than that.
“It would be much easier to call up some juice house,” he continued, “but the way we do it is more expensive and harder, and we have a deeper impact. If we’re going to make a product from an agricultural product, then you have got to support the industry.”
Part of winning over consumers is owning your home market, Nelson said, adding that Citizen Cider has become “the craft cider of Vermont.”
“A lot of people willing to go further and appreciate a product built on integrity, not racing to the bottom to get the best margins,” Nelson said. “For us, it’s let’s just make a great cider, work with a process that we feel really strongly about, be as transparent about what we’re doing and go from there.”
For his part, Nels Jewell-Larsen of 2 Towns Ciderhouse in Oregon believes the more regional cider makers can mimic the craft beer segment, the easier it will be to convince consumers to pay a higher price point.
“There’s no doubt that when you’re using great ingredients, your costs are going to be quite a bit higher than folks optimizing,” Jewell-Larsen said. 2 Towns uses fresh-pressed apples from the Northwest with no concentrates or sorbates. “There’s a value proposition there, and they’re willing to pay more for something that they really want.”