Makers of popular Woodchuck Hard Cider sold at 93% loss - vtdigger.org

A 60,000 square foot factory that was previously owned by Woodchuck Cider. Photo by Mike Dougherty/VTDigger

MIDDLEBURY — Vermont Hard Cider Co., which produces the popular Woodchuck Hard Cider brand, has been purchased by Vermont-based Northeast Drinks Group for $20 million, the holding company announced Tuesday. 

The sale price is 93% less than what Dublin, Ireland-based C&C Group paid to acquire the Middlebury-based Vermont Hard Cider Co. in 2012. 

Woodchuck Cider was the largest cider brand in the country in 2012 when C&C Group made their $305 million acquisition — about three times Vermont Hard Cider Co.’s estimated valuation.

That deal quickly turned sour, as sales failed to meet the lofty expectations of the cider boom.

Big brand competitors, and the expanding craft cider scene, were blamed for cutting into Woodchuck’s market performance. Boston Beer Co., maker of the Samuel Adams brand, released Angry Orchard the same year and quickly seized more than 50% of the U.S. hard cider market. Angry Orchard remains the dominant brand in the cider industry. 

Within two years, C&C Group recruited Pabst Brewing Company to take over the distribution and marketing side and handed Pabst a $150 million option to buy. That partnership, and the option to buy, ended in 2018.

David Mandler, executive at Northeast Drinks Group, said in a statement that the company intends to use the $34 million Woodchuck cider production facility in Middlebury, opened in 2014, to “incubate and bring new brands to market over the coming years.”  

“It has been an absolute pleasure working with C&C and Vermont Cider Co. thus far, and we look forward to continuing our relationship with C&C as importer for their cider brands, including Magners,” Mandler said. 

C&C Group oversees the Bulmers brand of cider, popular in Ireland and the United Kingdom. The group said ahead of a trading update that net proceeds from the sale will be used to reduce debt and that it is expected to be a book profit. 

Hard cider industry robust

Though the drop in sale price is significant, it doesn’t spell doom for the cider industry as a whole. 

Cider sales are 10 times greater now than they were in 2009, according to data collected by Nielsen, a market research firm. Alcohol consumption per capita has stayed the same, which means cider sales are cutting into the beer, wine and spirits market.

Regional, independent cider brands grew by 30% in year-over-year sales in 2020 according to Michelle McGrath, executive director of the American Cider Association. That trend is expected to continue into next year. 

Several consumer trends work in cider’s favor as well. About two-thirds of consumers 21- to 34-years old are seeking to reduce their overall alcohol consumption, according to Nielsen data, and cider typically has a lower alcohol content than beer and hard seltzer.

Cider is also gluten-free, unlike beer. It poses an attractive alternative for some health-conscious drinkers, although others are turned away by its high-calorie content. 

Some experts believe hard cider remains a niche industry, subject to “fads” or an inconsistent ebb and flow. Overall growth has slowed in recent years, with smaller cider brands breaking into the market.

Producers are also still working out how to guarantee affordable production of cider apples, which has posed a challenge since the cider boom began about a decade ago. Apples used for cider need to have the right balance of sugar, to promote fermentation, and tannins, which add the distinct bitter flavor. 

Still, hard cider showed a surprising resilience during the peak of the pandemic. Cider sales increased by 11% in 2020. 

“It’s been great getting to know Northeast Drinks Group, and I am really excited for what’s to come, and I’m happy to be part of it,” said Bridgett Blacklock of Vermont Hard Cider Co., in a statement. “As we look to the future, we will continue our passion and focus on cider, while also adjusting to consumer beverage trends with brands that we feel best complement our current portfolio.”

CORRECTION: Due to an editing error, we incorrectly reported that Northeast Drinks Group was based in Maine. The company is in Vermont.

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Makers of popular Woodchuck Hard Cider sold at 93% loss - vtdigger.org
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