Beverage Dynamics is the largest national business magazine devoted exclusively to the needs of off-premise beverage alcohol retailers, from single liquor stores to big box chains, through coverage of the latest trends in wine, beer and spirits.
Issue link: http://read.dmtmag.com/i/346136
www.beveragedynamics.com July/August 2014 • Beverage Dynamics 33 HOW'S THE STATE OF THE HARD CIDER MARKET THESE DAYS? Well, as a cider maker might say, it's mostly sweet and a little bit sour. There's a lot of sugar to the tongue these days. Though it's still hovering around the 1% mark of the $100 billion beer market, the industry has seen tremendous growth in the past decade, and it's been picking up even more the last year, with growth in 2013 at a whopping 65.6%, according to the Beverage Information Group. By one mea- sure, last year's sales (from late January 2013 to late January 2014) hit $220.7 million. That translates to nearly 16.8 million 2.25-gallon cases, compared to just over 10.1 million the year before. Within the industry, experts say they wouldn't be surprised if hard ciders were 3% to 5% of the beer market within the next fi ve years. "I would say you're looking at a $2 billion market in 2020," says Jeffrey House, president of the California Cider Company, which puts out ACE Premium Hard Ciders. "In 2030, my guess is it will be as big if not bigger than it is in the British market, probably 15% of the market." In other words, few industry observers consider hard cider to be a niche anymore. BY MICHAEL PARK "The legal-drinking- age millennial is eager to experiment with new fl avors, and they expect choice." — Royce Carvalho, brand manager, Smith & Forge, MillerCoors The fast-growing hard cider market is seeing an infl ux of new brands jostling for position. Cider Scramble "Cider is growing at tremendous rates across the country as consumers are dis- covering and converting to the category with no clear signs of slowing down," says Alejandra de Obeso, Heineken USA brand director for Strongbow. "We don't believe cider is going to do what it did in the past, which is to say be a category that shrank overnight," says Eli Aguilera, marketing executive for Johnny Appleseed, the new Anheuser-Busch InBev hard cider. "Consumers are more accepting today than at any time in the history of the variety." The surge of cider comes at a partic- ularly critical point for non-distilled al- coholic beverages. Since 2007, beer has been coming out fl at at the U.S. tap, with consumer-research fi rm Mintel reporting sales have been stuck on what's basically a plateau from 2012 to 2013, with 2.79 billion cases sold last year compared to 2.78 billion cases sold the year be- fore. And neither of those fi gures looks great compared to 2009, when the beer industry was bemoaning the 2.9 billion cases sold. Analysts point to a number of reasons for the decline, chief among them the fact that younger people sim- ply aren't drinking as much beer — in the early and mid-'90s, 71% of 18- to 29-year-olds considered themselves beer drinkers. In 2012, according to Gallup, only 41% did. It seems like a layup for hard ciders, whose strongest demographic group is the 21- to 35-year-old set — it's hard not to notice how quickly the term "millennials" comes to the lips of hard cider makers. (No- tably, Anheuser-Busch InBev is seeing con- sumers similarly embrace its line of drinks like Lime-A-Rita and Straw-Ber-Rita, fruity hybrids of margaritas and light beer.) And with a disproportionate say in setting down the initial taste profi les of new drinkers, cider