James Wilmore

Comment - Brewers Wake Up and Smell the (Cider) Apples

By | 16 May 2013

Stella Artois Cidre hit the US this week

Stella Artois Cidre hit the US this week

It was always a case of when, not if: Anheuser-Busch InBev has finally launched its Stella Artois cider off-shoot, Cidre, into the US market this week.

The 4.6% abv brand will initially be available in 26 US states, with a possible roll-out to more states next year. But, can Cidre repeat the brand's level of success in the UK?

Since launching in February 2011, Cidre has been the main driver of growth in the UK's "premium mainstream" cider category, according to research group IRI. UK sales of the brand reached GBP50m (US$76.1m) in its year of launch, and GBP68m last year. Although the launch was not without its problems, the brand has succeeded in attracting new drinkers to the category, while enticing long-term cider drinkers to trade up. A pear variant was also released a year ago.

Impressive stuff.

But, the US cider market is a different, less mature, beast.

Cider is still less than 1% of US beer consumption. This, despite, the category growing 110% in off-trade accounts and 70% in on-trade accounts. Plus, as has been widely acknowledged, cider continues to have an image problem in the States. A-B InBev alluded to this in its press release on the launch. But, the company claims, Cidre has the "potential" to change US drinkers's perceptions of cider, with its drier European-style taste, compared to sweet US hard ciders. 

Who will drink Cidre in the US?

Instead of trying to compete with beer - as it might in Europe - Cidre is being aimed at white wine drinkers in the US. A-B InBev claims it will be a "refreshing alternative". In this respect, it seems that female drinkers will be a key target demographic. There's no mention, however, of Cidre trying to take share from craft brewers. 

Ultimately, A-B Inbev seems keen to carve out its own niche with Cidre in the US. It's a tough ask, but, with doubtless a hefty marketing spend behind the brand, it will make a dent.

It may, however, want to steer clear of making too many claims around calorie counts for Cidre, a mistake it almost made with Michelob Ultra, its other US cider brand launched last year.

Bernstein analyst Trevor Stirling last year accused big brewers of being "asleep at the wheel" in the US for the past 20 years, in failing to capitalise on drinkers' growing taste for sweeter drinks.

With MillerCoors' acquisition of Crispin last year, Heineken taking the US distribution of Strongbow in-house, and now the roll-out of Cidre, it appears they have finally woken up.

Expert analysis

Cider/Perry in the US

Volume sales of cider in the US grew by 20% in 2011, outpacing the 12% CAGR posted over the review period. This growth was largely attributed to the popularity of craft beer in the US and consumers’ desire to try new flavours and tastes. Familiarity with the wide variety and tastes of craft beers has allowed consumers to venture into giving other alcoholic beverages a try. Some craft breweries have also begun to add a cider offering to complement their craft beer portfolio.

Sectors: Beer & cider

Companies: InBev, Heineken

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