Cider's Growth has Big Beer Jumping on the Bandwagon
Cider is so hot right now.
On Monday, Miller Coors craft/import division Tenth & Blake purchased Minneapolis, Minn.-based Crispin Cider. The deal also includes Fox Barrel Cider Company, a Crispin affiliate that produces multiple varieties of pear cider.
Not to be outdone, Anheuser-Busch announced in a memo to distributors that it would be adding a hard cider to its Michelob Ultra Light line of flavored malt beverages. Dubbed Michelob Ultra Light Cider, the concoction is billed as a "less sweet, lower calorie, all-natural alternative" to traditional ciders and boasts 118 calories and 4 percent alcohol by volume. The cider is scheduled to launch May 7.
The moves by both companies aren't surprising -- cider has recently exploded in the U.S. and is the beer industry's fastest-growing category, ballooning by 26 percent during 2011. Crispin, the country's third-largest cider-maker, experienced nearly 200 percent growth in the same period.
If you're unfamiliar with cider, we pity you. The tasty beverage is akin to wine, but uses apples as its base, which is why it's often called "apple wine" in parts of America and Germany. Here's a quick rundown of the process: Apples are collected and ground down into a pile of solid remains called pomace. This pulp is then built into a block in layers called cheeses and pressed. Yeast is added to the collected juice, does its work for about three months, and the resulting brew is bottled for your drinking pleasure. Cider can also be made from other fruits, such as pears.
While admittedly a fringe category, cider commands higher margins than most mass-produced and craft beer, which may be why it's become so attractive to major producers. It's also popular with the ladies -- a highly coveted drinking demographic. The attention of big brewers should only add to its growth, says Chuck Noll, national accounts manager at distributor World Class Beverages.
"I think the impact on the cider category will be immediate," he says.
The outlook on Crispin's success may be a little more positive than that of the new Michelob cider. The challenge of creating new products, Noll says, is that large companies have to rely solely on their size to get the brand started. While this sometimes leads to long-term success, if the product isn't great, it'll not only fade quickly but remain a bit of an embarrassment for the company. Anheuser-Busch has experienced this form of failure a few times before -- remember Budweiser American Ale, Bud Light Golden Wheat, or the 9th Street Market line of fruit beers? We do, and not fondly.
"Purchasing an existing cidery allows Tenth and Blake to tweak an already successful brand and use its marketing expertise to enhance what they are already doing," Noll says.
Noll says cider is currently about 6 percent of World Class' portfolio, but saw growth similar to the national average for the category last year. With big beer's newfound interest in apple wine, the number of bottles on Arizona shelves will likely only get higher.