C&C gains foothold in US cider market

Ireland’s C&C is to buy US cider firm Vermont Hard Cider for $305m to tap into a fast-growing market and offset weakness in its core UK business, where sales of its flagship Magners brand slumped during a wet summer.
By The Newsroom
Published 24th Oct 2012, 07:00 BST

Sales of Magners in the United States leapt 16 per cent in the six months to August, compared with a 17 per cent fall in the United Kingdom, where the brand faces growing competition.

The acquisition of Vermont, which produces Woodchuck, the largest domestic cider brand in the United States, is due to be completed by February, subject to regulatory approval.

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“This is a deal... about capitalising on the growth that is coming through in the US market and that will be the focus of the business and the portfolio going forward,” chief financial officer Kenny Neison said.

The US cider market has been growing at close to 60 per cent per year, with much of the growth coming from domestic brands rather than imported brands like Magners.

C&C, which also sells Tennants lager and cider under the Bulmers and Gaymers brands, said yesterday operating profit for the year to February 2013 would be at the lower end of its previously stated guidance of 112 million to 118 million euros.

The business was dragged down by poor summer sales in Ireland and the UK, but Mr Neison said there were no signs that cider would suddenly stop outperforming growth in lager.

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“The summer just hasn’t happened in terms of barbecues, parties, etc,” said Mr Neison. “But it’s no more than that...”

Growth in the UK cider market was around 3-4 per cent last year and there is no reason to think it won’t return to that level, Mr Neison added.

Related topics:Ireland