Craft Hard Cider 101
Did you know cider judges undergo sensory training to prepare them for the task of rating ciders? As a judge for the California Cider Competition, I just completed my initiation. Many of the other judges brought a wealth of wine and beer judging and tasting experience, and I was privileged to train and serve with this group, and to learn from Bob Peak of Peak Fermentation Consulting who led the sensory training.
When it came time to judge, we first needed to understand the cider’s entry class, since standards are considerably different between classes ,e.g.,
- Modern Cider
- Heritage Cider
- Traditional Cider
- Fruit Cider
- Wood-Aged Cider
Next, we assessed the cider entry according to eleven different criteria:
- acidity/sweet balance
- tannin balance
- overall quality
Learning a bit of apple history at the tasting experience made me curious to understand more about the ingredients used, along with the sales performance of the US hard cider market. Of particular interest was the craft and local segment, which was the focus of California Cider Competition and the MASICC.
California Cider from California Apples
California wines are known for quality and popularity. Many would agree that in wine, along with the variety of grape, the place where that grape is grown – its terroir - is important to the final product (along with other factors).
It isn’t as widely understood, however, how the apple variety and its terroir can contribute to a top-quality craft hard cider. Since sixty percent of the world’s apples come from China, the US might not be prime growing land for cider apples.
Within the US, our apple supply are primarily varieties of apples not necessarily well suited to cider. A few types such as Red Delicious, Gala, Golden, Granny Smith, Fuji and McIntosh are dominant today. A trip to the grocery store will confirm these varieties in stock. And while sold fresh at the store, these types may be maintained in cold storage for up to a year. All of this is perfectly understandable from a business standpoint, but using these apples in cider-making might not give the result that the premium or craft hard cider consumer is expecting.
In the olive oil category, by analogy, the world is dominated by olive oils from Italy and Spain. Despite this popularity, American-produced olive oils, including California-produced oils like California Olive Ranch, are capturing more business from higher-end consumers. These products meet consumer’s desire to know where their product is from, if it is genuine, and that it is fresh.
Considering these market factors, California cider made from California apples seems appealing as a premium product, along with ciders made in other top apple-producing states.
Hard Cider Market Represents $1.3B Market in US, Off Premise at $468 Million
The $1.3B US market for hard ciders has grown considerably in recent years, made up of both on premise and off premise channels. On premise is defined by Nielsen to include bars and restaurants, while off premise channels are food, drug and mass merchandisers like Target, Walmart, dollar stores, BJ’s, Sam’s, Whole Foods, convenience stores, military exchanges and some liquor stores.
In 2016, the off premise hard cider segment was estimated by Nielsen at $468 million in POS retail sales in 2016, down 9.9% from $519 million in 2015, while the on premise was estimated at $842 million, up 1.2%. From 2012 to 2015, the large big beer cider brands, led by Angry Orchard with more than 50% off premise share, helped to build the category.
Premium-Priced Craft and Local Ciders Attract Younger Consumers
Within off premise, craft or local ciders grew 39% from 2015 to 2016. While craft and local ciders represented less than 10% of the off premise category in 2014, they grew to 17.6% in 2016. Within off premise, craft and local ciders have their largest share in liquor stores (where they captured 32% dollar share) and grocery stores (where they captured 20% dollar share in 2016). Similar to other categories, many consumers express interest in local ciders, and around two thirds of them claim to be purchasing more craft ciders.
Compared to the price of beer overall, craft and local ciders (205 index) command the highest price premium; higher on average than craft beers (160 index) or the big beer ciders (158). As far as the off premise cider consumer, Nielsen research found that cider draws 21-44 year-old adults, with good appeal to both men and women.
Trends are similar in on premise, with more growth in smaller craft brands. Specifically, once the three largest on premise cider brands are removed, the smaller on premise brands grew 7.7% from 2015 to 2016, well ahead of the total on premise growth of 1.2%. In on premise, draft cider grew at 3.9% in the same timeframe, while packaged fell 11.2%, but as Nielsen points out, competition for draft handles is intense. Demographically, on premise cider consumers are 42% female-- slightly more balanced than beer, which is 37% female. Cider skews younger than beer, with 54% of on premise cider consumers ages 21-34 (Gen Z or Millennial) as compared to 37% for beer. The remaining cider consumers are primarily ages 35-54 (39%) with very few 55+.
Barriers to Cider Growth
Quantitatively, some of the consumer barriers to cider consumption among non-drinkers include:
- 40% - not liking the taste
- 19% - not knowing enough about it
- 9% - perceptions that the product is too sweet
Among those I spoke with, the most common perceived barrier was that the product was too sweet, and also not knowing what to pair it with or which occasion it would be best for.
I’m looking forward to seeing the business performance of local and craft ciders made in the US, and California in particular, during future years. Despite the recent softness by the big cider brands, consumer demand for local, high-quality products with known origin suggests continued growth, particularly if the barriers can be addressed by making occasions and pairing more obvious to consumers.