The move could see Hornsby’s brands available in the UK, with C&C saying the acquisition “presents significant opportunity for C&C to invest in and grow Hornsby’s volumes in the US and the potential to develop export led growth of the brand”. However, the brand is currently only available in the off-trade.
The deal makes C&C the number two cider company in America, with a 20% share of the market. C&C paid €16.4m euros upfront for the brand, with a further payment of €3.6m subject to performance of the business in the period until April 2012.
Hornsby was launched in 1994, initially in the West Coast, where its market is focused. It currently has a 35% share of the off-trade market by volume; current volumes are 61,0000 hectolitres per year, worth a net revenue of €8.5m.
C&C said the business is currently delivering low single-digit revenue and volume growth. The company expects it to generate €3.6m in the 12 months to December 2011, before overheads worth €1.4m and marketing costs.
C&C said there’s significant opportunity to grow cider volumes in the US. Overall volumes in the country stand at around 400k-500k hl and are growing at c.20% per year.
C&C said: “While the brand has underperformed during a period of low investment levels, Hornsby’s has strong brand equity and a craft heritage. These brand attributes provide C&C with the opportunity to re-invest behind the brand and re-enforce Hornsby’s position as a craft premium cider brand alongside the Group’s existing premium imported Irish cider brand, Magners.
“Hornsby’s existing strength in the off-trade and on the West Coast will also complement Magners existing position of strength in the on-trade and along the US East Coast.”
US volumes of C&C’s flagship brand Magners grew 38% to 45k hl in the year to 28 February 2011. The Hornsby’s acquisition will increase the firm’s cider volumes in America to more than 100k hl.
Two variants of Hornsby’s are available: Amber Draft and Crisp Apple.