just On Call - Cider won't match craft beer success - Boston Beer CEO
Angry Orchard has seen a sales bounce
The cider category in the US remains a “small niche” that may not even grow volumes to 1.5% of the beer sector, the CEO of Boston Beer Co has said.
Speaking on a conference call yesterday (1 May), Martin Roper said that he was pleased Boston Beer's Angry Orchard cider brand posted strong sales growth in first-quarter results. However, he warned against expectations that the category, which he estimates stands at 0.3% of the US beer market in volumes, can match craft beer's 7% share in the country.
“I think the most important thing is, it's a small category, cider has always been a small category,” Roper said. “Maybe it will get to 1% of beer (volumes), maybe it will get to 1.5% of beer, but certainly that seems to be a realistic expectation - maybe 1.5% is optimistic.”
In first-quarter results, released yesterday, Boston Beer said sales of Angry Orchard offset declines in its Samuel Adams brand, which has suffered from increased competition.
Boston Beer founder Jim Koch branded the trading climate a “land rush”, with bigger brewers buying up smaller players to compete in the profitable “premium” end of the beer category.
“(Also), you've got probably two new craft breweries opening a day, so this year there may be 800 new craft breweries, many of them quite local, Koch said. “I think it's just an extremely competitive landscape from above and below.”
Koch estimated the US craft beer category grew by “low double digits” in the first quarter of the year.
According to figures released last month, hard cider sales in the US on-trade jumped by 70% in Q1.
Boston Beer launched Angry Orchard nation-wide last year.
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