Stella Artois Hops on the Cider Bandwagon

Source: Anheuser-Busch InBev

The Stella Artois family is getting larger. But this time around you can the leave the beer chalice on the shelf.

Anheuser-Busch Inbev is rolling out a brand extension, Stella Artois Cidre, hoping the beer brand's premium name recognition can set the new release apart from the crowd in one of the fastest-growing beverage categories in the country.

While hard cider is often seen as beer's smaller-in-market-size and sweeter tasting cousin, that's not the play Anheuser-Busch is making here. Cidre (pronounced CEE-dra) is aimed at the white wine drinker and Stella Artois recommends this beverage be served in a white wine glass.

"We did some research and about three quarters of the volume that we tested with Cidre would be coming outside of the beer category," said Rick Oleshak, director of Stella Artois in United States. "So maybe 26 or 27 percent of volume could potentially come from within the beer space, but everything else would be coming heavily within wine, and even some, within liquor and spirits."

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Described as a "crisp, distinctive European cider," which uses hand-picked apples from North and South America, Cidre is Anheuser-Busch's second entry into the cider category following the launch of Michelob Ultra Light Cider last May.

Success in the fast growing hard cider category is key for Anheuser-Busch, which reported a 4.1 percent drop in beer sales to U.S. retailers for the first quarter ending in March, and it saw global beer volume decline by 4.1 percent.

Cider, meanwhile, shows no sign of slowing down. In the four-week period ending March 17, U.S. cider sales surged 110 percent compared to the same time period a year ago, according to research firm Symphony IRI. While still accounting for less than one percent of U.S. beer sales, hard cider sales grew nearly 85 percent at chain and convenience stores last year versus 2011.

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The growth has many players entering the cider space, including MillerCoors,which acquired the Crispin Cider brand last year; Boston Beer, which has had success with its Angry Orchard brand; and Craft Brew Alliance, which launched Square Mile Cider last month.

Anheuser-Busch sees Stella Artois Cidre as the premium alternative in the cider marketplace, and therein lies the importance in relying on the common ground of the Stella Artois brand.

"(Stella Artois) certainly does hit a more affluent, more educated type of consumer," said Oleshak. "Research shows our brand does very well with wine drinkers. So it's really important to have the Stella Artois name in front of Cidre for this."

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Relying on a beer brand name to sell a drink aimed at wine drinkers might seem to be an unusual approach, but for Oleshak it fits in perfectly with the Stella Artois image.

"I think that's important. Stella Artois does things different. We do the chalice (with beer), not a pint glass. We do the white wine glass with Cidre, not a standard glass," he said. "We're okay with doing things a little bit different."

Cidre launches next week in 26 different states, with further expansion possible in 2014. It will be available in four packs of 12- ounce bottles and single 24-ounce bottles.

-By CNBC's Tom Rotunno. Follow him on Twitter @TomRotunno

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