Irish cider company C&C Group plc., owner of the Vermont Hard Cider Company, today announced that it will end its 2-year-old U.S. marketing and distribution agreement with Pabst Brewing on April 1.
In a letter to distributors and retailers, Vermont Hard Cider — whose brands include Woodchuck, Gumption, and Wyder’s, among others — said the two companies mutually agreed to terminate the strategic partnership forged in December 2015. The cider company added that it would “resume full responsibility for the sales and marketing of its U.S. cider portfolio,” which Pabst had overseen since March 2016.
“In light of market dynamics, we and C&C decided that this was best for the brands and for both companies,” Pabst CEO Simon Thorpe wrote to Brewbound in an email. “We look forward to continuing our partnership with C&C in the U.K. and remain focused on the rest of the brands in our robust and eclectic portfolio.”
In 2012, C&C Group purchased Vermont Hard Cider for $305 million. At the time of the purchase, Woodchuck was the No. 1 cider in the country. Vermont Hard Cider’s then-president and CEO, Bret Williams, told reporters after the sale that he believed he could have sold the company for more money.
“I think I left a lot of value on the table,” he said. “We didn’t shop it around, but I know we could have received a higher value.”
However, Vermont Hard Cider has struggled in the years after the sale as competition increased from larger beer companies that introduced and acquired cider brands, including Boston Beer (Angry Orchard), Anheuser-Busch (Johnny Appleseed) and MillerCoors (Smith & Forge, Crispin). According to the Irish Times, C&C has incurred about $344 million in write-downs and impairment charges against Vermont Hard Cider’s assets, essentially an admission that the company overpaid for the business.
And last July, C&C CEO Stephen Glancey acknowledged that there was little chance Pabst would exercise the $150 million option to buy the cider brands in 2018 as part of the marketing and distribution agreement.
Last year, C&C’s U.S. business accounted for 4 percent of its volume and less than 1 percent of its operating profits, the company said in a press release.
Vermont Hard Cider’s operations and production of domestic cider brands will remain in Middlebury, Vermont. Following the end of the Pabst agreement, C&C said it anticipates “limited” changes to the company’s wholesaler network.
In an email, Joris Brams, C&C Group’s general manager for international business, said that Vermont Hard Cider’s new executive leadership team would include the return of Terry Hopper as vice president of sales, Ben E. Calvi as general manager and Bridget Blacklock as vice president of marketing. All three will report to Brams.
“We are excited to return to our roots of 28 years, with a focused cider team, forward innovation, and the ability to be nimble and respond quickly to the ever changing cider market and consumer trends,” Blacklock wrote to Brewbound in an email.
Prior to the Pabst deal, Hopper was Vermont Hard Cider’s VP of sales for nearly nine years. After the deal was made, Hopper was promoted to president of the company for seven months, before becoming Pabst’s Northeast regional vice president, according to his Linkedin page. Hopper left Pabst last September to become the chief sales officer for Swedish cider company Kopparberg USA. Hooper will continue that role as part of a “strategic collaboration” in which Vermont Hard Cider will begin importing and distributing Kopparberg brands.
During the Pabst-Vermont Hard Cider partnership, Pabst had been employing the sales and marketing teams for both companies, Blacklock told Brewbound. However, she added that the arrangement will continue through the end of March, “after which a select number of employees will transition back to the stand alone Vermont Cider Company structure and be employed by VCC to build out the sales and marketing team.”
“The team will be focused on distributor management and retail sales as we continue to analyze the organization on a go forward basis,” Blacklock wrote.
The end of the agreement also marks the latest organizational change for Pabst, which cut 18 percent of its workforce in January and restructured its executive team in 2017.