NEW YORK -- A new report from analysts at RBC Capital Markets analyzes the recent remarkable growth of hard cider. A glimpse at the report:
While cider is still a relatively small category (about 1% of the beer industry), it has shown explosive growth, up 92% in 2012, 77% in 2013 and 87% year to date in 2014. MillerCoors' marketing vice president, David Kroll, recently estimated that cider could reach 4% to 5% of total beer.
The Gluten Connection
Is the cider boom tied to the gluten-free movement? This category ascent has, in our opinion, coincided with larger national attention paid to gluten in diets (cider is gluten free). Google searches for "gluten free" follows a nearly identical, slightly leading curve for cider's growth. (See chart below.)
Boston Beer's Angry Orchard Cider, introduced in 2012, has achieved an impressive +50% share of the Cider market. We believe a key component of its success was very clear labeling indicating that, unlike beer, it is "naturally gluten free". On a run-rate basis, Angry Orchard is less than 20% of Boston Beer's sales. This trend and growth rate have not been lost on major international competitors, which have introduced/re-branded the following products:
MillerCoors–Smith & Forge and Crispin
We believe the category will continue its strong growth, which should be enough for Angry Orchard continue growing even if its cedes share.