THE GIST
Artisanal Brewing Ventures is the latest collective comprised of multiple breweries to expand its roster of businesses—and this time, it’s bringing one of the hottest cider makers in the country into the mix. This week’s acquisition of Bold Rock Cider—the number-two cider producer in the country—marks ABV’s first cidery purchase, and will put it in more direct competition with longtime category leader Angry Orchard.
Bold Rock will join founding companies Southern Tier Brewing Company and Victory Brewing Company, as well as Sixpoint Brewery, which joined the aptly named ABV just over a year ago. In a move to diversify a portfolio, ABV has singled out one of a handful of cider makers that can lay claim to both a large size and continued growth.
Bold Rock currently produces around 80,000 barrels of cider and seltzer, not far off from what Karl Strauss Brewing Company and Georgetown Brewing Company produced last year as the #42 and #43 biggest Brewers Association-defined craft breweries in the country. For now, Bold Rock’s hard seltzer is a fraction of its overall production. In grocery, convenience, and other chain stores tracked by IRI, a market research company, Bold Rock sold just over 52,000 BBLs of cider over the past 52 weeks compared to almost 1,400 BBLs of its seltzer, which comes in cucumber-melon and grapefruit flavors.
Derek Detenber, CMO of Artisanal Brewing Ventures, tells GBH that while Bold Rock Hard Seltzer is a "very small portion of the business today," it’s “growing substantially month-over-month," and is well positioned for additional growth.
Bold Rock cider grew its IRI-tracked sales 4.5 times over from 2015-2018, becoming the second-biggest cider brand in the U.S. behind Boston Beer’s Angry Orchard. There’s no chance for any other cidery to catch up to the size and scope of Angry Orchard, which sells nine times more volume in IRI stores than Bold Rock, but changes in the market have opened up ample opportunity for regional cider makers.
According to figures reported by the United States Association of Cider Makers, in-store, packaged sales of national cider brands like Angry Orchard and Stella Artois Cidre have consistently had negative, double-digit losses on a quarterly basis. Meanwhile, local or regional producers, including Bold Rock, are picking up the slack. In its most recent reporting from the second quarter of 2019, the organization showed that sales of local/regional brands were up 15.5% vs. a loss of 14.5% for national options.
What's more, IRI data shows something of a rebound for the cider category in chain stores. After losing 12.6% of volume from 2015-2017, 2018 sales returned to levels close to those of 2015, when cider sold about 765,000 BBLs as a category in grocery, convenience, and other stores.
WHY IT MATTERS
A more competitive market is leading breweries to diversify their product lineups (last year, the Brewers Association changed its definition of “craft” to accommodate that strategy), and it’s no surprise non-beer producers could be seen as a hot commodity. That was a factor in Anheuser-Busch InBev’s recent purchase of Craft Brew Alliance, which boasts gluten-free beer and cider makers, and is also why MillerCoors will be renamed Molson Coors Beverage Co. in 2020.
“With the addition of Bold Rock, ABV is strongly positioned to address the evolving needs of the craft consumer,” ABV CEO John Coleman said in a press release, highlighting Bold Rock’s portfolio of cider, hard seltzer, and canned cocktails. “Adding Bold Rock to the ABV family shows a commitment to bring craft consumers great brands across segments to best meet the needs in all of their drinking occasions.”
ABV is certainly betting on a strong horse.
In the most recent 52-week period tracked by IRI, which ended Nov. 3, Angry Orchard was down -8.9% in IRI stores while Bold Rock was up 13.1%. Perhaps most important, Bold Rock has a strong foundation in its home territory of the Mid-Atlantic, where it has facilities in Virginia and North Carolina. In Virginia, Bold Rock (+9.1% volume) was outselling Angry Orchard (-10.8%) by about 12,500 BBLs during that 52-week period. In North Carolina, Angry Orchard was up by 2,200 BBLs, but had lost 9.6% of volume compared to the previous 52 weeks while Bold Rock was soaring—up 22.6% in the Tar Heel State.
In the last 52 weeks, Bold Rock has also sold a little more than twice as much as Ace Cider, 2.5 times more than Austin Eastciders, and almost three times more than Crispin in IRI stores.
While Angry Orchard may always have an advantage in size, scale, and scope, thanks to being made and distributed via Boston Beer, it has lost some of its juice as smaller, more local competitors have come to market. Along with surging sales, Bold Rock also boasts four taprooms: three in Virginia (two in Nellysford and one in Charlottesville) and one in Mills River, North Carolina. Those will be added to ABV’s total of nine open or announced taprooms, which ABV says gives its collection of alcohol producers access to more than 2 million customers a year. This “own-premise” model has been pivotal in the beer industry, and ABV’s commitment to on-site service shows its attention will be well-spent in growing its many brands.
On top of this, Bold Rock will gain access to ABV’s production facilities, headquartered in Charlotte, but with operations also in Cleveland, Pittsburgh, and Philadelphia. Between that and added distribution opportunities, Bold Rock is now set up to be more of a rival to Angry Orchard, even if the latter continues to dominate the cider market in the coming years.
Of course, this doesn’t take into account what could come of Bold Rock’s lineup of hard seltzers. Those brands are small, but producers of all sizes continue to enter the category, which is on a trajectory to finish around $1.5 billion in sales for 2019, and perhaps a second-straight year of 200% volume growth in IRI channels. Bringing in the second-biggest cider maker in the U.S. was one thing, but there may yet be another feather for ABV’s cap if Bold Rock Hard Seltzer can take even a fraction of what will be a massive and growing segment in 2020.
Even if it’s just cider driving volume at this stage, it seems likely the juice will be worth the squeeze for Artisanal Brewing Ventures.
Words by Bryan Roth