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Considerations for Operating a Commercial, Non-HACCP Cider Mill in Vermont

 

 

 

The Price of Cider

I was recently out with a group of old college friends at American Flatbread in Burlington, VT.  Now this place makes great pizza, and has an excellent in-house brewery.  They also carry top-notch libations from around the world, including some beers in the $6-20 range.  Perusing the drink menu, I was especially surprised to find Farnum Hill Cider from Lebanon, NH, possibly the best cider in the US, or on the east coast anyway.  I was particularly surprised since Steve at Farnum Hill has told me before that he didn't plan to seek a Vermont distributor since, for the work required, he could pitch to a more lucrative market. So here I am out with friends I haven't seen in five, even ten years.  Since we were out at a restaurant and our days of passing a bottle in the park or alley are behind us (most of us anyway), I did not bring any of my cider.   Given that these guys tasted my first attempts a decade ago, I would have loved to offer them a sample of my wares now, or at least a good commercial example. So why didn't I order a bottle?  It was right there on the menu:
Farnum Hill Dry Farmhouse Cider....$22
Farnum Hill Kingston Black Cider....$34

Now we're at a place which is building a reputation for some of the best beers brewed in Vermont, at $3.50 a pint, and I found it hard to justify plunking down that kind of cash to introduce folks to an admittedly very good cider. So why the high price, and is it worth it?

First, consider the 50% profit / 100% markup typical of the wine list in most restaurants.  Now we're talking $11-17 'shelf cost' for these ciders.  Now consider that a 750 ml / 25 oz bottle of  cider really contains three 8 oz glasses. Now we're getting to $3.66-5.66 per glass, retail (not restaurant) price, which is 2-3 times the per-serving cost of a good craft beer. 

Now  consider that cider in Europe is significantly cheaper.   Pub prices for a pint of real cider fall into the $4-5 range, or $2-2.50 per 8 oz, or $1-1.25 retail/shelf price.  Similarly 750 ml bottles of Normandy cider fetch $4-6 at the farm.  Why the disparity?  First, in Europe, the production of good cider fruit and the processing infrastructure are a commodity, rather than niche market. That's not to say that there is no craft put into these ciders, but the raw ingredients are much cheaper than here in the US, where you really have to grow your own cider fruit, with the land, startup, and maintenance costs associated. Simply put, intended cider fruit are the final product, as opposed to culled dessert fruit where the cost and profit of the crop are already accounted for in the graded apples, and cider fruit are a no-profit salvage product.

North American 'six-pack', or industrial ciders, on the other hand, can be produced fairly cheaply because they rely on cheap culled dessert fruit as their base, and infrastructure does exist for this market.  In fact, many alcopop ciders may very well be relying on foreign concentrate as their 'juice'.

So we have the higher initial cost of the fruit.  Next, any producer needs to have the necessary bonded and licensed facility as well as equipment including press, tanks, and refrigeration.  These fixed costs will necessarily be spread over less product, or higher costs will be spread over similar production.  You see, a brewery can turn over tanks, kegs, cooler space, and other facilities on a monthly basis, give-or-take. Craft cider, which uses real juice from real fruit, tends to use that same real estate once per year, due to the annual nature of the crop and the longer fermentation and aging times involved.  Again, the 'six pack' cider market differs here because they have industrialized the process to take weeks rather than months and their supply of cull fruit from packing lines or frozen concentrate is year-round. So the craft cidermaker either has to incur similar upfront costs spread over significantly less product or overbuild the facility at a higher cost to meet similar production goals.   This phenomenon is standard in the wine industry, but few balk at spending $12-20 for a bottle of wine. But then again, the wine industry has matured into a commodity market where cheap, decent wine can be made from excess yet reasonable quality fruit made in highly efficient wineries.

Higher cost of fruit.  Higher cost of facilities.  Now the cidermaker wants to make a reasonably good living from their product, the production of which is almost necessarily a full-time job.  That living must therefore be spread across each case sold, and with an limited market in its infancy, fewer bottles are going to move (not to mention the higher marketing costs to move them).

So yes, cider will always be a higher priced beverage than beer, and on par with moderate priced wine (any wine that retails over $16 is expensive to me).   The solution to getting your cider fix at a reasonable cost?  First, buy from the producer.  Those ciders are available from Farnum Hill directly at their orchard for $9-14 .  At that price you can buy a case, likely getting a little discount, and have a good supply of really nice cider.  But by far the cheapest way to get your cider fix is to make your own.

Homemade cider can be really cheap if you have your own trees or scrounge your own fruit, and squeeze it yourself.  Custom pressing might run you up to $2 per gallon, or $0.40 per bottle.  Press more, and the cost likely goes down.  Buying juice from the orchard directly is cheap, usually about $4 per gallon by the jug, less for bulk quantities.  This is for a 'sweet cider', dessert apple juice,which still relies on culled fresh fruit.  The really good stock, made from those bittersweets, herlooms, and antiques,of which there is no commodity market, may cost you $6-8 per gallon.  Hell, even at $10 you are talking about a cost of $2 per bottle, plus your carboys. That's not bad at all for a superior product that you would pay $22-34 a bottle for at a decent restaurant.

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Some years ago, not long after leaving college, I entertained the idea of getting into the commercial craft cider business.  Never mind that my cidermaking skills had a long way to go, and I had no money to speak of, but a friend and I forged ahead, spending a good chunk of one winter making a business plan.  As we crunched the numbers, even on an optimistic level, I was not happy with the outcome.  If we scrounged our fruit from local wild or unmanaged farmhouse orchards, fermented in $15 juice barrels in a tin shed, and did everything from marketing to distribution on the cheap, we'd still have to charge a minimum of $9 a bottle.  Given the narrow profit margin to be expected, I didn't see a way to make a living in the cider business at that time. 

But one of the main factors in my quickly abandoning the cider business idea was that I think of cider as a drink for the everyman, not a top-shelf gourmand product, available only to those with the means to afford it.  Yes, there is definite craft involved in good cidermaking, but I come from the New England Tradition of cidermakers. If my great-grandpa Albert knew that his barreled cider would today fetch over $20 a bottle he'd roll in his grave...then laugh to the bank.  And while I understand, on a small, craft, commercial scale, why a good cider costs what is does, that doesn't make me comfortable with it.  So I continued to make cider on my own, on the cheap, often fermenting in those $15 barrels, sometimes even in a tin shed.  I was damn near destitute for some of that time, but I could afford the simple luxury of cider in the cellar.  It is my goal to help others discover and make their own cider at a reasonable cost.  So when I sell juice for a premium price, consider the value of the final product and the deal you're getting. 

TB 6/04/06

 

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All material Copyright Terence Bradshaw 2006-2013

terryb at lostmeadowvt dot com