Ad Age, Buffalo Trace Newsletter, Wine and Spirits Daily, Shanken News Daily and others have all had stories about Cider and its potential as the next “craft” brew.

At first I thought – no way. Cider (Hard Cider that is) has been around for centuries and never caught on. Most people I know who have come here from the UK, sooner or later miss Cider and wonder why Americans don’t drink it. I don’t know why that is – no acquired taste for it; perceptions that it’s too sweet; dislike of apple juice; confusion about what it is; just because it’s not in consumers’ frame of reference. There are lots of reasons.

If you look at the numbers, related to beer (including craft), Cider is comparable to a fly on an elephant’s ass. Yet, it grew at around 4% (on average) over the last five years compared to beer, which was slightly down over the same period. An Ad Age article back in Nov 2011 reported that sales climbed 25% last year. Here is an excerpt:

Cider is still a tiny fraction of the alcohol category and is not about to threaten beer, wine or spirits for booze dominance. But while mainstream beer brands are declining, cider is growing at a furious pace, drawing premium prices, coveted women drinkers and even more male fans attracted to bold flavors.

Hmm.

Then this week I read that MillerCoors has bought the Crispin Cider Co, a brand that grew over 200% last year. A-B has decided to jump in and is planning to launch Michelob Ultra Light Cider. Although, in the A-B case, I would guess they thought, “What the hell, the Michelob brand isn’t going anywhere, might as well make it a Cider.” Between the two, my money is on Crispin.

So I bought a pack and tasted Crispin Natural Hard Apple Cider. Not bad… it’s crisp, refreshing and at 5% alcohol, pretty much equivalent to a beer. Packaging is premium and this product can appeal to both men and women.

I haven’t done product reviews in this blog but I intend to in the future, so stay tuned.

For now, I’m leaning toward continued sales growth and acceptance by consumers. It will appeal to those looking to discover new drinks and new tastes. That will build awareness and trial, particularly among sophisticated craft beer drinkers. I also believe that Cider can take a chunk of share from Ready-To-Drink (RTD) products, particularly the Smirnoff stuff. (Are they still making that from malt?)

I think the allure of Cider will be based on its naturalness, unique non-clawing taste and imagery that appeals to a wide demographic base in terms of age and gender.

So yeah, Cider could be the next big thing.

I came across an article in USA Today indicating that US alcohol consumption hit a 25-yeat high. Americans drank the most wine on record (2.3 gallons per person). Spirits grew by 18% to 1.5 gallons. But, beer dropped 7 percent to 20.7 gallons according to the Beer Institute.

The report brought to mind an article in Wine & Spirits Daily back in October. Speaking to the National Beer Wholesalers Association, Tom Long of MillerCoors, indicated that the beer industry could learn a thing or two from spirits marketing.

To further illustrate the problem, according to Ad Age, AB InBev spent $555 million in measured media last year and still managed to lose a full share point. MillerCoors spent just under $400 million and lost half a share point. How does that work? Together they spent nearly a billion and lost market share. Is it the creative? Is it the media? Is it that consumer alcohol tastes are shifting to craft beers and spirits/wine? Probably all of the above.

Therefore, as a public service, I scoured the Internet to see if there is anything out there that I had not yet covered that might help the beer people.

First I thought about innovation.

What about new flavors? Look at the growth in flavored vodkas. First fruit then vegetables then exotic fruit, now all kinds of stuff. How about Whipped Cream, Marshmallow, Cupcake, Peanut butter? Probably too froufrou for the macho beer drinker.

How about new venues? I just read where White Castle is thinking about joining other fast food spots in testing the sale of wine and beer. On second thought, White Castle is where you go after drinking, if at all.

So, I came to the conclusion that the answer lies in celebrity tie-ins. There have been a slew of them in 2011, some as celebrity ownership and some as endorsements. All are in the spirits or wine business and none in beer, until recently. Here’s a blurb from the LA Times about the Hanson brothers: “Hanson burrowed into our heads with their hit 1997 song “MMMBop.” Now they want space in our gullets with their soon-to-be-released beer MMMHop IPA (Indian Pale Ale). They may want to consider co-packing the beer with other Hanson logo products – toothbrushes or lunch boxes.

How about signing a deal with Sean Diddy Combs? After making a ton with Ciroc vodka, I’ve read that he is looking at tequila. Either Diageo didn’t sign him to spirits exclusivity or they want to do a tequila tie-in or he just wants to move on. Perhaps a beer company can get this booze pied piper to pimp their beer.

Here are some other celeb efforts:

Sammy Hagar, after selling off the majority of Cabo Wabo Tequila, now has a new spirits brand called Sammy’s Beach Bar Rum. I guess he thinks that lightning will strike twice. If it does, maybe he’ll do a beer.

Perhaps the beer folks should look at celebrity tie-ins with those who have recently entered the wine business. Like retired basketball player Yao Ming selling his Yao Family Wines exclusively in China. Or, AC/DC distributing wines in Australia called Drops of Jupiter Petite Syrah and Calling All Angel’s Chardonnay.

What about celebrities from the reality shows? Bethenny Frankel may be available now that her Skinnygirl brand has been acquired. The beer people could use her for light beers. A real natural would be “The Situation” who is supposedly hawking protein vodka.

So the beer people have lots to choose from. But my favorite is country music star Toby Keith who launched his Wild Shot mezcal. I love what he had to say about it the Bloomberg BusinessWeek,

“All the whiskey’s already been spoken for…and everyone’s got a vodka, and one of my buddies does tequila…But, there was no one doing mezcal.”

Talk about insightful marketing analysis. He’d be great for a beer brand.

And now, on to the foremost industry show of the year, at least in my opinion. The Wine and Spirits Wholesalers of America (WSWA) 68^th annual convention is in Orlando at the beginning of April. Once upon a time this was a key meeting point between suppliers and wholesalers. Speakers, exhibitors, award presentations were all a sideshow to the supplier-wholesaler hospitality suite meetings and dinners. Brands and lines were awarded and lost at this event. Friendships were made and solidified. Animosities were seeded and blossomed. All in all, it was one of the events that drove the business.

But there may be problems this year.

Last week, Wine and Spirits Daily reported as follows:

“WSD had heard rumblings that some DISCUS members will not be attending the WSWA’s annual convention this year. Initially we supposed this was due to disagreements over the CARE Act, but a number of distiller sources we have spoken to say the issues are unrelated and that it is a commercial decision.”

A commercial decision?  WSD closed the piece with:

“Our conclusion?  While we don’t doubt DISCUS’ reasoning for bowing out, it’s likely that disagreements over the CARE Act sped up the process.”

Ah, the CARE Act (aka H.R. 5034) – let me see if I can simplify the issue.

The CARE Act aims to clarify that states have primary authority to regulate alcohol. I can go on and on with details about letters to congress, lobbying rationales, assorted fine print gobbledygook and each side’s arguments and counter arguments.  But it’s simple — the wholesalers want to protect and solidify the three-tier system and the suppliers want to make inroads and cause some erosion.

So, back to the WSWA –

I don’t believe the attendance will be down. I also don’t buy the argument that “we see the wholesalers on a frequent basis already so why go to the event?” Because, it’s called relationship building. Because, the size of the line alone is not the answer for “winning the hearts and minds” of distributors and their salespeople.

As for the wholesalers, if the big boys don’t show in the same numbers as in the past, perhaps they will spend more time in the exhibit area and get to know the smaller suppliers and the new brands and players that may become the powerhouses of the future.

It’s fascinating to see each of the oligopolies battle each other. I guess it’s called the “irresistible force” meets the “immovable object.”

Wine and Spirits Daily had a story last week entitled, IS TEQUILA THE NEW VODKA?

Good question.

The article quoted a writer at the Washington Post who said… “A new trend emerges: the proliferation of ‘ultra-premium’ tequilas targeted at a club crowd that slowly has begun to trade in Grey Goose for Patron.” The article goes on to point out that “various social indicators, such as Al Roker claiming on the Today Show that Tequila is the new Vodka.” (I must have missed the announcement about Al Roker as social forecaster. I thought he did the weather.)

A few observations:

Drinking Patron at clubs at the expense of Vodka brands like Grey Goose is not a new concept. They are often interchangeable depending on the mood and occasion. Both brands are at the top of the heap in terms of being icons.

Further, it’s not Tequila, it’s Patron. Generally speaking, among most consumers, the Tequila category has three brands…Patron, Cuervo and all others. Remember the old adage? Consumers drink brands not categories.

Tequila will grow as it continues to be the focus of new product introductions and in that regard, it will be the new Vodka. I don’t have the actual data but I’d bet there have been more new Tequilas introduced in the last few years than Vodka. The shifts in Vodka preferences from the high end to mid-priced and value brands make new Tequila entries more enticing.

So, among most consumers, Vodka will continue to rule. Whether Al Roker thinks so or not.

Have you been following the press about privatization of some Control States?

In case you haven’t, Wine and Spirits Daily (June 7^th edition) has a great score card on what’s been happening.

NABCA has issued a resolution in support of Control States. No surprise but people I’ve talked with have wondered why they didn’t do this some time ago. WSD reports that 4 states (NC, PA, WA and VA) are looking closely at privatization. So the debate must be getting serious.

I’m not sure I know how I feel about privatization.

Those who want to keep government involvement argue about jobs and the need for industry regulation or control in their jurisdiction. But the NABCA resolution states, “there is irrefutable proof that alcohol control systems have a positive public health and safety impact on their communities.” Does this mean that the 32 open states are not doing a good job in protecting health and safety? Or, that the industry, unless governed by state officials, will behave badly?

Follow the money. As WSD points out, in tough economic times, states will look to a range of resources to increase revenue including taxes, fees and privatization.

Hey, look at California – on the ballot this November is a voter initiative to legalize marijuana. The tax revenue from sales is seen as a way to help the state’s budget difficulties.

Interesting that the economic climate has created change in government’s involvement in the social climate. But I guess it’s always been that way.

Here’s a thought if you’re working in a state store that gets privatized – think about moving to California.

I found Megan’s article on Constellation Brands in yesterday’s issue of Wine and Spirits Daily to be particularly interesting.

Here’s an excerpt:

Constellation may be one of the world’s largest wine companies, but its spirits brands had a phenomenal year.  Total spirits organic net sales grew 19% for the year, led by a 38% gain for its star Svedka vodka.  Svedka also recently launched it’s first-ever television advertising campaign “which marks an exciting milestone and serves as another example of how Svedka is setting itself apart in its quest to bring future fun to vodka lovers everywhere.”

The quote is from Constellation Chief Rob Sands who, in my opinion, is among the best executives in the business. Smart, knowledgeable and effective. But, obviously not an advertising maven.

Maybe it’s just me that thinks the ad campaign is ridiculous. It features a well-endowed, sexy, female robot (fembot) supposedly symbolizing the brand’s future achievements. If the marketing folks are looking to be more than a price driven brand and want to add image — keep looking.

Oh, and check out the TV campaign. I’m the guy who was there when Seagram and the industry decided to end the voluntary ban on broadcast advertising. This ad makes me think we made a mistake.

Svedka is a great brand built on hard work and smart marketing…excellent imported Vodka with high quality at a very competitive price. I’ve even been known to buy a 1.75L every now and then.

But its growth is not a function of the advertising. Its growth continues in spite of it.

Maybe mainstream advertising is not as important for brand building as it once was.

Just sayin’…