elimather August 23, 2012 Vermont Hard Cider’s Strong Move By ceding control of distribution for Strongbow to Heineken, Vermont Hard Cider is making a strong and smart strategic move. Photo Credit: Dave Linger Recently the Wall Street Journal reported that Vermont Hard Cider, who manufacturers and markets the domestic Woodchuck Hard Cider brand is giving control of Strongbow, the #2 cider brand by sales in the US to the Dutch brewer Heineken. Here is a link to that article. This is a classic strategy play, give up market share to grow the market for everyone. Clearly Heineken will back Strongbow with more marketing dollars than Vermont Hard Cider could have provided, benefiting Strongbow, and likely taking share from the Woodchuck brand. However, some estimate that the Hard Cider market could grow 4X over the next 5 years, and with the marketing budgets of international brewers such as Heineken, you can bet more drinkers will seek hard cider in their stores. Woodchuck Hard Cider, the current US market leader, with 24% of the US hard cider market, will likely benefit from the increasing American appetite for hard cider. Just look at the recent growth of the US cider market. Boston Beer Co., maker of Sam Adams, recently launched Angry Orchard nationwide, which appears to be doing decently on the social beer sharing platform untappd: http://untappd.com/AngryOrchardCider Given the younger, “crunchier” demographic that attracts cider, I think using ‘local’ produce gives Woodchuck and edge that I’m surprised to see they haven’t leveraged yet. As imported cider gets aggressively promoted and 23-30 year old women and men purchase more and more cider, I would bet on Woodchuck positioning its brand as the local American option as the position as the an early market leader may no longer be relevant in 5 years.