$285 million less than it acquired it for in 2012
by Timothy McQuiston, Vermont Business Magazine C&C Group, based in Dublin, Ireland, announced March 16 that is selling Middlebury-based Vermont Hard Cider Co for $20 million, or $285 million less than it bought it for in 2012, to Northeast Kingdom Drink Group. Northeast Kingdom Drink Group is referred to as Northeast Drinks Group LLC in a press release announcing the deal.
Northeast Drinks Group is a privately owned holding company. It said it has entered into a definitive agreement to purchase the Vermont Hard Cider Company, LLC, including its pioneering cider brands and state-of-the-art production facility in Middlebury.
The deal includes Northeast Drinks Group acquiring Woodchuck, the iconic hard cider, which celebrates its 30th anniversary this year, along with the rest of the VTHCC’s portfolio of award-winning brands.
According to VBM, VTHCC employs 65. It opened its modern and much-praised facility in Middlebury in 2014.
In addition, Northeast Drinks Group will have full control over Green Mountain Beverage, a division of VTHCC, which has been a leading manufacturer and co-packing facility of hard cider, alcoholic RTDs and specialty non-alcoholic beverages, including for Ocean Spray
Northeast Drinks Group said in the statement that it "is excited to return VCC to local ownership." Vermont Hard Cider Company is also referred to as Vermont Cider Company.
The transaction is anticipated to be completed within the next 30-days, subject to approvals and customary closing conditions.
C&C announced March 16 "the sale of its wholly-owned US subsidiary, Vermont Hard Cider Company, to Northeast Kingdom Drink Group LLC for a total consideration of $20 million USD, with the transaction due to complete in the coming weeks. The sale is expected to result in a net book profit for C&C. The total net proceeds from these divestments will be applied to reducing net debt." The statement was made in a year-end financial report.
In October 2012, the Irish cider maker and beverage distributor stunned the Vermont business world by paying $305 million for Vermont Hard Cider Company, maker of the Woodchuck brand. By all accounts it did not go well.
C&C sought to capture the emerging American hard cider market, of which VTHCC's Woodchuck was a leading brand. C&C produces Bulmers and Magners. They are widely distributed in Ireland and the United Kingdom.
However, other domestic companies, like the the Boston Beer Company, makers of Samuel Adams lager, also saw an opportunity. They also weren't saddled with the significant investment.
Boston Beer's Angry Orchard brand is by far the largest seller in the United States. According to Statista, in 2019 Angry Orchard had sales of $220.1 million. Bold Rock was a distant second at $27.8. Woodchuck was number 10 at $7.3 million.
Within two years the owner enlisted the Pabst Brewing Company, now based in Los Angeles, to distribute and market the brands as sales did not meet expectations. Pabst also had a $150 million option to buy VTHCC.
On February 20, 2018, C&C Group announced that VTHCC would resume full responsibility for the sales and marketing of the Group’s portfolio of cider brands in the US, including Woodchuck, Wyder’s and Magners. C&C said that by mutual agreement the Group terminated its arrangements with Pabst.
According to the online Irish Times from February 20, 2018, C&C took about $344 million in write-downs and impairment charges against Vermont Hard Cider’s assets in 2015 and 2016.
Dan Rowell gives a tour to Senator Leahy of the new Woodchuck tasting room and cidery in August 2014.
In August 2014, Vermont Hard Cider unveiled a sparking new $34 million cidery, production facility and tasting room in Middlebury.
Dan Rowell, then-President and CEO of Vermont Hard Cider, was joined by US Senator Patrick Leahy, Vermont development officials and a long list of subcontractors.
“The story of Woodchuck is representative of Vermont’s ethos, of a place known for craft and quality, “ said Vermont’s US Senator Patrick Leahy. “From the early days in Proctorsville, to the move to Springfield and the remarkable growth and the innovation in Middlebury, it’s clear that a commitment to putting out a quality beverage has been at the center of Woodchuck’s vision throughout.”Woodchuck Hard Cider introduced the US to craft cider from a two car garage in Proctorsville in 1991.
The cidery is 100,000 square feet and houses 23 cider tanks and a brand new bottling line. In addition, a post-and-beam visitor center, gift shop and tasting center. The bottling facility also accommodates other brands.
Patrick McMahon, CFO, of C&C:
“The future of Vermont Cider Company and the facility is in terrific hands with this group of highly experienced operators from the United States. We have full confidence in the team and would like to say thank you to everyone at VCC, especially Ben Calvi and Bridget Blacklock for leading our US business.”
Bridget Blacklock of Vermont Cider Company:
“We have good momentum right now with Woodchuck and Wyder’s and I feel this new ownership will only strengthen this as we move forward. In addition, C&C appointing VCC as importer of their cider brands for the US allows us to maintain our representation of Magners and preserve the strength in our portfolio of iconic and diverse brands. 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. 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.”
Ben Calvi of Vermont Cider Company:
“All of us at Vermont Cider Company couldn’t be happier with Northeast Drinks Group coming on board. I’ve enjoyed working alongside their team through the acquisition process and am excited to be joining them as we execute their vision for the future.”
David Mandler of Northeast Drinks Group:
“It has been an absolute pleasure working with C&C and Vermont Cider Company thus far and we look forward to continuing our relationship with C&C as importer for their cider brands including Magners. We plan to support the VCC portfolio with a robust marketing spend and innovative programming. We’ll also leverage the ultra-modern facility to incubate and bring new brands to market over the coming years.”
Woodchuck bottles make their way through the bottling process at the facility in Middlebury. Top photo is of the new plant in Middlebury in 2014. Courtesy photos.
About Northeast Drinks Group
Northeast Drinks Group LLC is a privately owned holding company comprised of members originally from the Northeast that have experience across the beverage sector.
It is based in Middlebury, Vermont.
Mandler told VBM that the ultimate parent company is Northeast Drinks Group and as part of the structure that was put in place there is an intermediary company called Northeast Kingdom Drinks Group which is the direct parent of VCC.
However, Northeast Kingdom Drinks Group is a 100 percent fully owned subsidiary of Northeast Drinks Group and Northeast Drinks Group is the name we will be using in the public domain. It is based in Middlebury.
For additional information please visit www.ne-dg.com.
About Vermont Cider Company
Vermont Cider Company is a leading hard cider maker in the United States, with a state-of-the-art cidery located in Middlebury, Vermont. Vermont Cider Company crafts a variety of ciders for a variety of consumers. There is iconic Woodchuck, fruit forward Wyder’s as well as the classic Magners Irish Cider and Blackthorn, rounding out our import offerings. Vermont Cider Company reinvigorated American hard cider in 1991, with the launch of Woodchuck, and stays focused on the category today through our commitment to crafting innovative and refreshing hard ciders. For more information about Vermont Cider Company, please visit: www.vtciderco.com.
Source: MIDDLEBURY, Vt.--(BUSINESS WIRE)--Northeast Drinks Group LLC 3.16.2021