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Apple Beer

by Margaret Jackson on November 1, 2014, 10:03 am MDT

www.applebeer.com

Salt Lake City, Utah

Founded: 1964

Privately owned

Employees: 5 (plus Stillman)

The father-daughter duo of Larry Stillman and Ashley Simmons are bucking soda market trends by keeping tradition alive -- and changing with the times.

As a young man living in Germany, Larry Stillman was impressed with the artful way Bavarian biermeisters blended Sicilian apples with natural herbs and spices to create Fassbrause -- the soft drink with a foamy head.

Stillman knew the beverage would go over well in Utah, where many residents don't drink alcohol, so he brought the drink to the Rocky Mountains in the 1960s.

"My father knew this drink was too good to pass by and named it Apple Beer," says Ashley Simmons, the company's marketing director. "It's not as sweet as a lot of sodas on the market, so it doesn't hit you over the head with sugar."

The light apple flavor comes from apple peels, rather than pulp, so it's not a juice, Simmons says.

Now celebrating its 50th anniversary, Apple Beer is thriving in an industry that's seen declining sales. The company's revenue increased 12 percent last year, compared with a 3 percent decline in overall sales of carbonated soft drinks. And because the company operates virtually, it has low overhead, allowing it to keep its prices low -- a six-pack including a pilsner glass is just $12.99.

Known as Utah's original gourmet soda, the bubbly beverage does not contain caffeine, alcohol or gluten. It was sold in 12-ounce cans for 30 years. In the 1990s, the company began offering the beverage in glass bottles to preserve the natural flavor. In celebration of its 50th anniversary, the company is rolling out a newly designed gold can.

The company expanded its product line in 2012, introducing Apple Beer FIVE, a five-calorie drink made with acai berries and ginseng.

"Apple Beer has morphed over the 50 years, so it will be fun to add our gold can for our 50th anniversary," Simmons says.

Apple Beer is distributed mostly to the West Coast and Intermountain West. It's also distributed to Guyana and Curacao, which has a large Seventh-Day Adventist population that doesn't drink alcohol and likes to serve the beverage at special events such as weddings. In places where it isn't sold, Apple Beer can be ordered online.

"Apple Beer provides a nice alternative to guests who don't drink," Simmons says. "It makes the perfect toasting beverage. Everyone has guests who don't drink alcohol but want to toast and participate."

The company is in expansion mode. It's starting with Western states and is currently in negotiations to distribute Apple Beer in Mexico.

"We love the export market," Simmons says. "It's our most successful. We opened a production facility in Florida to ship our cans to Curacao."

Challenges: As Americans spend less on soft drinks, one of the challenges is staying on top of market trends to understand more about what people are consuming. The company also doesn't have the marketing power that large makers of carbonated soft drinks do.

"Our products sell through word of mouth," says Simmons, noting that Apple Beer has won the Best in State Award for beverages in Utah. "The very best way to sell our products is to allow people to taste it. Apple Beer truly sells itself."

Opportunities: Simmons says that also is where the opportunity lies. "Apple Beer appeals to the more conscious consumer because of the quality," she says. "All of our products are gluten free. It's allowed us to rise in a sinking marketplace."

Needs: The company wants to stay faithful to its history, so it spends a lot of time striving to make sure it uses only the most healthy ingredients and maintaining its identity as a Bavarian soft drink.

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