The All About Beer column by John Holl posted today begins "[h]ard cider continues to climb in popularity and now the largest producer in the country, Angry Orchard, has its own place to welcome customers...." This is odd because of the following news as reported by The Motley Fool a few weeks ago:
Similar to last quarter, Boston Beer's founding chairman, Jim Koch, opted to be the bearer of bad news: "Our total company depletion trends of 6% in the third quarter of 2015 matched our year to date trends, but represent a slowing from our expectations, primarily as a result of weakness in our Samuel Adams brand due to increased competition and a slowing in the cider category"... Boston Beer CEO Martin Roper elaborated: "During the third quarter, we [...] saw a slowing of the cider category, but believe Angry Orchard maintained its share even as competitors continue to enter or increase investment. We remain positive about the long term cider category potential, but short term growth is less certain. We are planning continued investments in advertising, promotional and selling expenses, as well as in innovation, commensurate with the opportunities and the increased competition that we see."
I've heard a bit about cider in the lead up to American Thanksgiving like this piece on NPR's Science Friday that focuses on Albany's Nine Pin Cider. Like the All About Beer column, however, there was nothing indicating that the market for hard cider is softening in the way that Boston Beer has admitted. While most stories last year were all about the boom in cider, The Motley Fool saw clouds on the horizon as early as in May of 2014. That concern continues:
Total U.S. cider sales were down 3.4 percent in the 13 weeks ended Nov. 7, and the rate of decline accelerated to about 7 percent over the past four weeks, according to Nielsen. Four and five years ago, the rate of growth was in the heady triple-digits. Even a year back, the pace of growth was nearly 50 percent. "It's been getting a lot of attention, because of all the huge growth rates in the past three to five years," said Danelle Kosmal, vice president of the beverage alcohol practice at Nielsen. "It's obviously difficult to sustain those triple-digit growth rates."
So is it a case as I tweeted earlier today just that, "basically, Sam Adams bought a pretendy farm to suggest their cider-like product isn't industrial" or is it worse? Is the farm one form of "the new packaging and advertising expenses taken on in the second half of 2015" in an effort to retain sales in a shrinking cider market? We get no guidance from the All About Beer column other than the oblique observation that the "vast majority of the company’s main brands will be produced at the Boston Beer facility in Ohio, with the focus of the new location being experimentation and small-batch only recipes." As Jeff found in June 2014, getting a straight answer about Angry Orchard can be difficult. But at least he asked the questions. If the market for cider continues to shrink, it'll be interesting to see how long it takes for the farm to be re-purposed or even sold off.