Perhaps brewer Boston Beer Co Inc (NYSE:SAM) should consider changing its name to Boston Cider. After all, with its flagship Samuel Adams brand suffering from flagging sales and its Angry Orchard cider business now owning the biggest share of the cider market, it may want to reposition its marketing.
Just recently I pointed to the potential for cider’s growth, noting the expansion of the total pie to about 1% of beer sales. Obviously, it’s still a tiny niche market, and for Boston Beer Co Inc (NYSE:SAM), which generated $163 million in total sales last quarter and $360 million over the past 12 months, cider only comprises a very tiny portion of the total, but it’s already been able to overtake the industry leader.
At C&C Group‘s annual meeting earlier this month, it was revealed that when it bought the Hornsby brand two years ago, it paid $25 million and got a 20% share of the market for its efforts. It paid more than 10 times that amount, or about $300 million, for Vermont Hard Cider and its top Woodchuck brand, and got another 42% share of the market. So C&C had almost two-thirds of the cider market all to itself.
Yet management was forced to admit that within the past month, Boston Beer Co Inc (NYSE:SAM)’s Angry Orchard has become the No. 1 hard cider in the country, if for no other reason than because the overall size of the market has grown so much. According to the Beer Institute, the U.S. cider market was about 690,000 barrels in 2012 and expanded 88% in the first quarter alone of 2013. Even so, C&C concedes Angry Orchard’s growth has simply been “phenomenal.”