Start-up Crispin Cider aims to capture biggest slice of hard cider business

  • Article by: SARAH GORVIN
  • Updated: June 14, 2010 - 9:43 AM
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Crispin Cider founder Joe Heron with some of new naturally fermented hard apple cider.

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Sprawled on a chair in the blue-and-white boardroom of Crispin Cider Co.'s headquarters in northeast Minneapolis, Joe Heron reflected on one of his company's core values.

"We walk the talk," he said. "We do what we say we're going to do. Every time."

Heron, the charismatic founder of Crispin Hard Apple Cider, isn't exaggerating. When he and his wife, Lesley, created Crispin in 2008, their goal was to make the most innovative cider company in the country. Two years later, the native South African seems to have put a fresh face on the cider industry; he's created a brand based on sophistication, introduced Americans to a traditionally English over-ice serving style and invented what he calls the first truly American ciders. In addition, the company has expanded sales to 18 states and acquired a smaller cider company.

The Herons' first foray into the beverage industry was in 2003, when the couple founded Ardea Beverage Co. and launched Airforce Nutrisoda, a drink designed to help frequent fliers combat illness. Because of Joe's background working for Swedish pharmaceutical company Novartis, the Herons thought they could make something that could be successful. And it was. They sold the company to PepsiAmericas in 2006, and the couple used that money to help finance the launch of Crispin.

But it wasn't for the love of cider that the Herons started producing their apple concoction; they didn't even like cider at the onset. Instead, they were following Joe's strategy of starting businesses on what he calls "fertile ground."

"I love music, theater, cinema, but I can't do any of those," Heron said. "My creative expression is this: I start businesses in market spaces that are vacant and lack innovation."

Heron noticed that the cider market in the United States had been lying stagnant for years. The ciders on store shelves looked outdated and were being marketed as beer alternatives, not beverages in their own right.

Hard apple cider is made by fermenting apple juice into wine and then diluting it to get the desired alcohol content. When Heron was developing Crispin, his goal was to make a drier, crisper, more French-leaning cider and to move away from the sweeter British- and Irish-style ciders like his competitors Strongbow and Woodchuck.

The original Crispin cider -- available in three varieties: brut, original and light -- is made using a blend of three to five apple varieties, mainly Granny Smith, Golden Delicious and Washington apples. And here is something Heron stresses: Crispin isn't made from apple juice concentrate, but from fresh apple juice. "You get a smoother, cleaner, crisper taste," he said. More important, he says, you don't get that heartburn effect other ciders can give.

When Crispin was launched in October 2008, there were challenges. The country was in the middle of a recession and Minneapolis was on the verge of another Midwestern winter, not really an ideal climate for introducing a cider-over-ice brand.

But the main hurdle was that Americans just didn't like cider. Elsewhere in the world, ciders made up anywhere from 5 to 15 percent of the beer market. In the United States, cider's share is less than 1 percent.

Kieran Folliard, who has served Crispin in his bars (including the Local and Kieran's) since its launch, said Crispin's distinct branding helped to set it apart from other ciders and beers. "It's about a creative, good image," he said.

That is a concept Heron understands well. "Everything you buy says something about you," he said. "We wanted the story when people drink Crispin to say, 'I have good taste; I'm more experimental and worldly.'"

Because of cider's tiny 1 percent of the beer market, pushing that number over Heron's goal of 3 percent will take some convincing.

According to Eric Shepard, editor for Beer Marketer's Insights, a trade publisher for the United States' brewing industry, that may be an achievable goal. "Whether or not it's alcohol, consumers are constantly looking for new products and new flavors," he said.

While the cider industry grew 10 percent in 2009, it still owns only a tiny fraction of the beer market. "[Cider] is not really on our radar screen at this point," Shepard said.

Harry Schuhmacher, owner of Beer Business Daily, said the main barrier in boosting cider's numbers is not having a nationally recognized cider brand.

"[When] you get to that level where in most bars ... there's at least one brand of cider, then it becomes habit that you'll drink cider," he said.

As for Crispin's chances: "It could happen," Schuhmacher said.

That's where Heron's brand-building efforts come in.

He's made sure everything from Crispin's clear bottles to its sleek glassware shows sophistication.

But it's Crispin's sophisticated taste that consumers seem to appreciate more than its packaging. Cindy Salyers, Minneapolis, said she first tried Crispin nearly a year ago and has been a regular drinker since. "It's not as sweet [as other ciders] and it's more champagne-like," she said.

Denny Flanders of Rochester said he enjoys the unique flavors of a Crispin Velvet (Crispin mixed with Guinness). "It's good," Flanders said as he sipped his drink.

Putting down roots

In the two years since its launch, Minnesota-based Crispin has branched out. It is now sold in 18 states: on both the East and West coasts and in the southwest. In April, Heron opened markets in New York, New Jersey, Washington, D.C., Maryland and Virginia.

Last January, the company acquired California-based Fox Barrel Cider Co. Though the two companies were separate entities until this year, they had been on friendly terms before the acquisition: Fox Barrel had been sharing its cidery in northern California, allowing Crispin to be produced alongside its fruit ciders. For now, Fox Barrel's pear-and-black-currant ciders will retain their branding but will be sold by Heron's company. They joined Crispin on liquor store shelves in early April.

In the first three months of 2010, Crispin made $5 million in revenue and sold 6 million bottles -- more than was sold in all of 2009. March 2010 saw record sales in Minnesota. Right now, Heron estimates that Crispin holds about 35 percent of the cider market in Minneapolis.

Jim Surdyk has stocked Crispin cider in Surdyk's Liquor Store in Minneapolis since its launch. He credits Heron's marketing techniques for the cider's success. "Heron knows how to bring the story together to sell a product," he said.

New world ciders

Last year, Heron added an "Artisanal Reserve" line. These two ciders, Honey Crisp, introduced in 2009, and the Saint, introduced in 2010, are unfiltered, cloudy and smoothed with natural sugars: Honey Crisp with organic honey and the Saint with maple syrup.

They're what Heron calls the first truly American ciders. "We didn't try to be British or French ciders. We made bold, ballsy, new-world ciders with swagger," he said.

With the launch of this second line, Crispin started to attract a new segment of consumers: craft beer drinkers. Which is all a part of Heron's business plan.

Although Crispin Cider Co. is not profitable, Heron hopes it will be in the next year. In fact, he has a larger goal in mind: He wants Crispin to be the top cider company in the United States by 2015. "We're not ashamed of saying [that] and we say it every day," Heron said.

Sarah Gorvin is a U of M student on assignment for the Star Tribune.

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