With beer sales stuttering, two of the industry’s major players are looking to corner the market of another alcoholic beverage — hard cider. MillerCoors — which sells beers ranging from Coors Lite and Miller Lite to Molson Canada and Blue Moon — announced this week the acquisition of Minnesota-based Crispin Cider Co. Major competitor Anheuser-Busch meanwhile will later this year release its own cider offering, “Michelob Ultra Light Cider,” according to Advertising Age.
Largely popular in the United Kingdom, hard cider has been gaining increasing popularity in the United States in recent years, with sales up 25% last year. Crispin saw sales increase by 200%, according to MillerCoors.
But the American cider market has until now been dominated by Vermont Hard Cider Co., a small privately owned brewing company that brews several brands including market leader Woodchuck, which had a 47% market share last year.
So why are both these companies deciding to offer cider now?
It comes down to product diversification. With beer-sales at an eight-year low last year, entering the cider market will provide both brewing companies the ability to market to the growing number of consumers who are rejecting their brands, either for craft beers or wine and cocktails.
E.J. Schultz at Ad Age wrote last year that global brewing companies should be looking at the cider market, particularly because of its good profit margins.
It is priced at an average of $35 a case, more than other premium offerings, such as $33 for craft beer and $29 for imported beer, according to Nomura (Equity Research). Also, cider attracts women drinkers. “Whereas 80% of beer companies’ consumers are male, cider is gender-neutral, opening up a market in which beer players have struggled,” Nomura said.
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