THE GIST
With the Nov. 1 announcement that Blake’s Hard Cider would merge with Austin Eastciders, the hard cider world has its first company with national ambitions since Boston Beer Company took market leader Angry Orchard nationwide in 2012.
Neither Blake’s, Austin Eastciders, nor Avid Cider Co. (which Blake’s acquired last year) will be sold in all 50 states any time soon, but the new company believes having regionally strong brands backed by a unified supply chain will enable it to compete with a flagging Angry Orchard brand that lost -35% of its chain retail sales volume 2018-2022 and will decline again this year. Combined, the new business—named Blake’s Beverage Company—suddenly becomes the fourth-largest cider company by volume, behind Angry Orchard, Bold Rock (#2), and barely trailing 2 Towns CiderHouse (#3) by several hundred cases of sales year-to-date.
The combined brands have production and sales infrastructure in diverse regions and create a patchwork of national reach:
Blake’s Hard Cider is located in Armada, Michigan, on a farm that has been in founder Andrew Blake’s family for generations; it also opened a production facility in Wolcott, New York last year capable of producing 1 million gallons annually. Its ciders are distributed in 29 states, mostly in the Midwest and East Coast.
Austin Eastciders is based in Austin, Texas, and distributes to 22 states, including the Northeast and Mid-Atlantic.
Avid Cider Co. is based in Bend, Oregon, and distributes across the Western states of Washington, Oregon, Idaho, Montana, Nevada and California.
Two of the three brands have seen chain retail volume growth in the most recent 52-week period ending Oct. 8:
Blake’s (+11.8% to 322,000 cases) and Austin Eastciders (+2.8% to 305,000 cases).
Avid’s volumes declined -14% during that period to 44,500 cases.
The three brands together increased volumes +2.8%. The cider category declined -5.6%.
While maintaining their regional focuses, the combined company will now have greater access to fruit from different regions of the U.S. and will share some sales and marketing resources. The supply chain in particular is critical, Blake says, as ensuring steady and affordable access to fruit can be the difference between a profitable and unprofitable year for a cider company.
“The geography and supply chain of apples becomes a challenge to solve, if you’re looking at having cider compete on a national stage,” Blake says. “That’s something we realized in real time through Blake’s, having years where we go from making a little bit of money on every case we sell to losing money on a bad apple crop year. We’re really trying to smooth out those macroeconomic dynamics.”
Blake’s would not say whether certain brands within the company might in future be produced at other brands’ facilities—i.e., Blake’s making Austin Eastciders’ products in Michigan—but left the door open to such an arrangement.
WHY IT MATTERS
Angry Orchard mainstreamed hard cider for contemporary U.S. drinkers, but as its popularity has declined in recent years, Blake’s sees an opportunity to rival it with a portfolio of regional brands.
“We feel we’re in a good position to give Angry Orchard a run for their money, and we look forward to doing so,” Blake says. He notes that Angry Orchard is just one brand in Boston Beer’s overall business, and that the parent company appears to be more focused on putting resources behind its brands, like Twisted Tea, that are currently growing. In an Oct. 26 earnings call, Boston Beer leaders never said “Angry Orchard” or “cider” once, but did mention “Twisted Tea” 30 times.
“We wake up every day and think about cider. … What the category needs right now is someone at a national scale that’s obsessed with that mission,” he says.
Regional cider brands have been ascendant in Angry Orchard’s wake:
In the 52-week period ending Oct. 8, Angry Orchard’s portfolio has declined -9.4% by volume. Last year, it sold 65% of the volume it did in 2018.
Angry Orchard hasn't eclipsed 60% share of chain retail volume in recent years. In turn, local and regional brands have performed better than the total cider segment and Angry Orchard.
Of the top-10 cider brands in chain retail, the only two national companies—Angry Orchard and Ace Cider (-11.3%)—saw volume declines in the latest 52-week period. Ciderboys (-11.2%) was the only one of the remaining eight—all regionally-focused businesses—that had volume declines.
Greg Hall, founder of Virtue Cider in Fennville, Michigan, has watched Blake’s rise and feels this type of cider brand is the future of the category.
“Cider is a regional game, much like beer is now. It’s so expensive to sell in other markets. … You want to be making cider in one of three to five [apple-growing] states if you have any aspirations of grocery sales,” Hall says. “Blake’s has done a great job, and they’ve been very aggressive, which I admire. It seems they are well positioned to lead for the next three to five years.”
Blake says the strategy for expanding Blake’s, Avid, and Austin Eastciders sales markets are still “evolving,” but stresses that preserving their regionality is critical. It’s something beer brands have learned as well: Anheuser-Busch InBev’s model of buying growing regional breweries and scaling them nationally has proved difficult, with the company selling or closing some of its acquired breweries.
Core focuses for the new company will be growing the cider category overall—a rising tide lifts all ships, cider makers like to say—and exploring new products outside of hard cider. The name Blake’s Beverage Co., notably, isn’t shackled to “cider,” allowing it to potentially launch other flavored and fruit-based beverages in what Blake calls the “fourth category” beyond beer, wine, or spirits. Several other cider companies have broadened their repertoires, too: Downeast describes its products as “drinks” and makes spirits-based canned cocktails in addition to hard lemonade and hard cider. 2 Towns last year launched wine-based, fruit-flavored Craftwell Cocktails. And Austin Eastciders has previously made fruit-flavored seltzers.
“We’re fruit farmers first and foremost and we have production facilities in all the best fruit-growing regions of the country. When I think about Blake’s and what we can offer, our deal is full-flavored, fruit-forward beverages,” he says.
Words by Kate Bernot