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Stella Artois' Cidre keeping the odds in its favor as cider market slumps

No matter which horse wins the 142nd Kentucky Derby on Saturday, there is one sponsor that's already outpacing the competition.

Stella Artois' Cidre cider will be making its first appearance at Churchill Downs as part of brewer's official sponsorship of the event. At a time when the cider category is seeing a significant slowdown, Stella is looking to put itself in the winner's circle in 2016.

Cidre is the fastest-growing hard cider brand in 2016, according to Chicago-based market research firm IRI, which measure sales at multioutlet and convenience stores. The brand has seen 80 percent volume growth through March of this year and dollar sales growth of 25 percent. In addition, Cidre is the biggest share-gainer in 2016, up 2.3 points vs last year.

That stands in contrast to the overall cider category, which was once a darling of the beer business but now appears to be fading as consumers turn to newer options. Cider dollar sales fell 8.2 percent through April 17 as compared to the same time a year ago, according to IRI. The decline is a big change from 2014 and 2015 when cider dollar sales posted gains of 72.4 percent percent and 14.7 percent, respectively.

"Increased competition in the form of hard sodas and other flavored beers appears to be having an impact on cider sales and contributing to the slower sales," said Dan Wandel, principal, Beverage Alcohol Client Insights for IRI.

"Cider will continue to face increased competition moving forward, as we are now starting to see and hear about spiked or hard seltzer items being launched in the marketplace," he added.

'Playing near wine and champagne'

So if cider is slumping, why is Cidre picking up steam? Executives at Stella parent Anheuser-Busch InBev attribute Cidre's success to a few key factors.

The first, they say, is the product's flavor profile. From its inception, Cidre has positioned itself as a drier alternative to sweeter ciders that dominate the market.

"We want to play near wine and champagne products," said Harry Lewis, Stella Artois vice president. "For example, we're making great gains at the brunch occasions. Where champagne and white wines are really big, we're doing really well."

In addition to offering itself as an alternative to wine and champagne, Cidre appears to be capitalizing on Stella Artois' longtime positioning as a "premium" and "more sophisticated" product, Lewis said.

Unlike some of the other ciders, "we're playing out of the heritage and knowledge of 600 years of brewing from Stella Artois," Lewis said.

Cidre is also benefiting from the flagship brand's success. Sales of Stella Artois beer are up more than 20 percent in 2015, in both dollar and sales volumes.

Lewis has delivered an unofficial mandate to the Stella sales team: Wherever a consumer sees the flagship Stella Artois brand, Cidre should be there, too.

"We kind of have a rule that if there is a display, 80 percent should be Artois and 20 percent should be Cidre," he said. "With the rate of sales of Stella Artois right now, it's a really hot item and it's the biggest space we can put Cidre in and highlight it as an alternative from the same family."

As a result of that increased focus, the overall distribution of Cidre is up about 7 percent over last year, Lewis said.

After seeing the success of Cidre, Anheuser-Busch InBev officials are looking to build on the momentum in 2016. They intend to double the investment previously put into the Cidre brand, while boosting TV, print and social media campaigns to raise its profile.

As for the overall cider slowdown, Lewis remains confident in the category, and thinks the recent slump can be attributed to just a few of the larger players dragging down the overall category.

"The category has huge potential and if we play our cards right — being sophisticated and leveraging momentum — this is just the beginning for Cidre," he added.