C&C Group chases US cider space as big brewers exit

C&C Group has said its Woodchuck cider brand will find space to grow in the US as mainstream brewers leave the category to chase hard root beer sales and other new trends.

Woodchuck has underperformed since C&C bought its owner, Vermont Hard Cider Co, in 2012 for US$305m. In full-year results for 2014/15, depletions were down 15% as C&C was hit with a EUR150m impairment charge on its US assets.

Speaking to just-drinks today, Joris Brams, C&C's group international MD, said the US cider market is evolving, with some big breweries exiting after failing to find growth. The market leader, Boston Beer's Angry Orchard, is also seeing sales tail off as consumers move to the relatively new hard root beer category, including brands such as Not Your Father's Root Beer.

"All of the breweries have now had their go at cider," Brams said. "Some have been very successful but it has eased out a bit. Others have failed completely. So that means there is potentially a bit of space for us."

Brams added: "There's maybe a few million people switching around, looking for what's new on the block, what's flavour of the month. Root beer seems to be one of these flavours."

C&C Group has changed its marketing strategy on Woodchuck away from above-the-line activations to more consumer sampling. C&C Group CEO Stephen Glancey said the new direction was similar to Pabst Brewing Co's direction with Not Your Father's Root Beer, which uses digital marketing to attract younger consumers.

"They [Pabst] are having phenomenal growth across a number of categories and its driven by an attraction to the Millennial consumer," he said. "The way you connect is by having authentic products, with attractive packaging and using social media instead of traditional TV stuff.

"That's the game that we're trying play."

The company also rolled out new Woodchuck innovation Gumption in February. The blend of US and Irish apples has secured national listings and Brams said: "We are pretty optimistic that will continue to do well."

However, Glancey said the product has yet to make up for declines in the core Woodchuck portfolio. 

Glancey also said the company will roll out its new Magners Blonde to other markets if it performs well in Australia.

"I think it would be interesting in our domestic markets," he said.

Magners Blonde is a low-carb cider that was unveiled this week by C&C's Australian distributor Bacardi-Lion. It is said to have 85% fewer carbs than "most other brands out there" and will roll out in the country from next month. 

C&C Group released its first-half results today, with sales and profits dipping. Glancey told just-drinks the results were "disappointing".

"The disappointment has to come from the US not turning around yet and the performance in Scotland and Ireland," he said.

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