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Advice/opinion - from home-scale hard cider making to craft cider production (microcidery)

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Alex Girard

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I'm fairly new in the passionating world of hard cider making and I have a question.

I'm seriously thinking of moving from home-scale cider making to craft-scale cider making production (microcidery, if I may use this term). After a few success, my passion for hard cider and a friend of mine having successfully launched his own microbrewery, I feel ready to jump into this adventure.

Here's my question..

The plan is to implement the microcidery with a testing-room, distribute our hard cider to local craft beer stores and then try to establish a few agreement brewpubs with good visibility. My guesstimation is to start with a production of 50 to 100hl for the first year, but rapidly expand the production to get an ROI. The big difference here with most common hard cider makers (and it's the main reason why I'm posting this question) is that I'm not planning to acquire an orchard neither grow my own apples. Even grinding and pressing the apples is not in the initial scenario at this point. My goal would be to buy the apple juice/cider from orchard owners and produce the hard cider in our facilities.

Of course my very first step will be to create my business plan and validate the assumptions, but I try to find out if this is doable, and would like to know if anyone would have some opinion, advice or any experience to share.

I found a few business model similar to this here and there on the Internet, but it looks like it's not something quite frequent here in Quebec whereas most of the hard ciders available on the market (except the commercials-scale distributors) come from orchard producers. Any hint are welcome!

Thanks in advance

AlexG
 

madscientist451

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The cider market has gotten pretty competitive, and consumers more knowledgeable.
You can make cider out of commercially available juice, but is it going to produce a cider that consumers are going to buy?
The good news is you can get cider production going for way less money compared to opening a brewery.
More good news is that consumers are used to paying craft beer prices (which are ridiculous IMO) for a product that has low raw material costs, so the margin can be quite high. If you can distribute locally, and get accounts to keep it on draft you'll
be able to get some volume moving and (maybe) make a profit.
Check with your local distributors; how much is a 1/6 keg of cider? Can you compete with that?
I can get a 1/6 keg (20L, 5.2 gallons) of local cider for about $60. They have their own orchard, and use lower grade apples that don't bring a good price, because China is flooding the market with cheap juice,(That's a separate rant, don't get me started) so their raw material is basically free.
I've had the cider in local pubs and I think its terrible, but they keep making it so someone is drinking it. I can make my own juice for less than $2 a gallon with purchased apples, you can probably beat that price if you buy a tanker load of juice. So if you can get a pub to buy a keg of it for $60, your margin is around $49, depending on what your actual juice cost is. Sell 1,000 kegs and you
have $49,000 and then you start deducting all of your expenses.
Or you can follow more of a wine market and try to get a high price for wine size bottles, but that probably won't work if you use ordinary apples for your juice.
Maybe you can find a grower in your area with cider apples to sell? Expect to pay much more than the "seconds" price I mentioned above.
I say go for it, keep your expenses low, don't quit you day job, and see what what the market reaction is.

g
 

dmtaylor

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I didn't see a question. ;) But I'll comment anyway.

My number one concern would be ensuring you have contractual arrangements with local orchards to supply you with inexpensive and reliable juice IN THE QUANTITIES THAT YOU REQUIRE. They might be willing to sell you 4-5 hl, or 30 hl, or whatever, but if that orchard only produces 100 hl total per year, this could have a great impact on their own supply and profit margin if they make you a good deal. In other words, make sure your local orchards are willing to part with that volume of juice. Also consider whether you are willing to screw your fellow cider makers and pay more for the juice than they do because if other cider makers already soak up all the "extra" juice that these orchards have laying around, and they already have contracts, you might be out of luck.

And I have only barely scratched the surface. This endeavor seems very complicated and will require a lot of hard work, including many hundreds if not thousands of hours of investigative work up front before you ferment a single liter. Ensure you are ready to take on all the business stuff before jumping in.

If you are sure you are ready, then I wish you the best of luck. The world is still in need of a lot more great cider.
 

Maylar

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I can't speak about your business plan, as I have no experience in that. But I can say that cider is coming into its own and I think your timing is good.

There are two "microcideries" in my area. One buys apples from local orchards and presses their own juice. That gives them the ability to mix and blend apple varieties and offer a range of styles. The other gets juice delivered by truck - I'm not sure from where.

Both have tasting rooms and offer to fill growlers for customers. And at least one of them supplies local pubs and restaurants with kegs. Customers think it's great to drink cider made right here in town pressed from apples grown here.

Good luck with your venture.
 

bmd2k1

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Late last year or early this year there was another guy starting a craft cidery....wanna say he was on west coast...who posted on this forum. Suggest ya do a search....find him & reach out for his feedback.

Cheers & good luck! [emoji111]
 

MarkKF

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There is one in NY that has zero front door exposure and only makes one kinda cider. A kinda fresh blend carbonated. They distribute in cans and kegs. Local store or restaurants only. I think it’s a great way to start but fear they will be left behind.

http://sundogcider.com/aboutus.html
 
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Alex- I assume you've done your research on what is out there available in the market you are looking at. You need to do something different to make yourself stand out. That 'something' may be marketing, or it may be a unique flavor combination. Consider making Graf, or different fruit flavored ciders, or spiced/herbed ciders, or honey/apple combinations (I know there are actual names for these, but I always have problems remembering them- melomel?). Or maybe use a novel type yeast- Brett? A lacto combo? Since you are in Quebec, maybe get something from Unibroue? Try making MANY different small home-sized batches to see what goes and what doesn't before you move on to commercial sized batches. All-in-all being in Quebec, I think you ought to do better than the states- you folks are more adventurous! Good luck! Keep us informed.
 

kthomas

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The cider market has gotten pretty competitive, and consumers more knowledgeable.
You can make cider out of commercially available juice, but is it going to produce a cider that consumers are going to buy?
The good news is you can get cider production going for way less money compared to opening a brewery.
More good news is that consumers are used to paying craft beer prices (which are ridiculous IMO) for a product that has low raw material costs, so the margin can be quite high. If you can distribute locally, and get accounts to keep it on draft you'll
be able to get some volume moving and (maybe) make a profit.
Check with your local distributors; how much is a 1/6 keg of cider? Can you compete with that?
I can get a 1/6 keg (20L, 5.2 gallons) of local cider for about $60. They have their own orchard, and use lower grade apples that don't bring a good price, because China is flooding the market with cheap juice,(That's a separate rant, don't get me started) so their raw material is basically free.
I've had the cider in local pubs and I think its terrible, but they keep making it so someone is drinking it. I can make my own juice for less than $2 a gallon with purchased apples, you can probably beat that price if you buy a tanker load of juice. So if you can get a pub to buy a keg of it for $60, your margin is around $49, depending on what your actual juice cost is. Sell 1,000 kegs and you
have $49,000 and then you start deducting all of your expenses.
Or you can follow more of a wine market and try to get a high price for wine size bottles, but that probably won't work if you use ordinary apples for your juice.
Maybe you can find a grower in your area with cider apples to sell? Expect to pay much more than the "seconds" price I mentioned above.
I say go for it, keep your expenses low, don't quit you day job, and see what what the market reaction is.

g
Excuse my ignorance, but how is starting a cidery "way less money" when compared to a brewery?

I've never brewed beer, I just started home "brewing" cider, and depending on how things go I may go a similar route as the OP for a change of pace. I have a long way to go, and just doing my initial research now.

From what I am seeing so far, I believe the costs would be very similar to starting a brewery, but perhaps (and I really hope!) that I am missing something:

  • Rent for commercial space of cidery - all things equal, should be comparable for rent at a same size/production volume brewery
  • Permitting - Federal, State and Municipal levels. Dealing with same/similar organizations as a brewery.
  • Cost for renovating/updating space to accomodate brewing/fermenting - electrical, plumbing, etc.
  • fermenting vessels, aging vessels, etc. - probably less equipment required here than a brewery?
  • Kegs/bottles/cans/growlers and any combination of these to package your product - same same as brewery
  • Insurance, power bills, etc. - I imagine this would be less with a cidery
  • Consumables: yeast, apples/juice, hops, etc. - No mash, and not near the hops requirement (and hops only if you decide to dry hop your cider)
  • Sanitation equipment
  • Distributing costs
  • Payroll for employees (especially if you open up a tap room)
  • Misc. - forklifts, hoses, etc.
To me, it seems like the costs would be very similar. Like I said, I'm very new to this and perhaps I'm overlooking something. I've spent a lot of time tonight reading about people starting up nano breweries on probrewer, and it's pretty discouraging. I really hope you are right that it is much cheaper than breweries, but I just don't see how.
 

madscientist451

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Excuse my ignorance, but how is starting a cidery "way less money" when compared to a brewery?

I've never brewed beer, I just started home "brewing" cider, and depending on how things go I may go a similar route as the OP for a change of pace. I have a long way to go, and just doing my initial research now.
I suppose the difference in cost depends on what country/state you live in, but here in the US, if you are "cooking" anything you have a different set of regulations to deal with on top of the what you need for a wine making license.
Cider isn't brewed. So you don't have to buy a brew kettle, mash tun, chiller, vent hood to carry away the steam and you don't have to pay for all the electrical and plumbing installation and inspections associated with those things.
My comment specifically referred to getting cider production started. I didn't mention tap room, distribution or anything else. You have to have inventory before you can sell retail, and cider is something that takes time to get it right.
I know of people that have started a winery business in their basement or their garage. No rent, minimal renovations, and no employees.
If you are just starting out and don't have much money, employees are something you want to avoid.
Here's a video showing a low budget cidery:
 
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kthomas

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I suppose the difference in cost depends on what country/state you live in, but here in the US, if you are "cooking" anything you have a different set of regulations to deal with on top of the what you need for a wine making license.
Cider isn't brewed. So you don't have to buy a brew kettle, mash tun, chiller, vent hood to carry away the steam and you don't have to pay for all the electrical and plumbing installation and inspections associated with those things.
My comment specifically referred to getting cider production started. I didn't mention tap room, distribution or anything else. You have to have inventory before you can sell retail, and cider is something that takes time to get it right.
I know of people that have started a winery business in their basement or their garage. No rent, minimal renovations, and no employees.
If you are just starting out and don't have much money, employees are something you want to avoid.
Here's a video showing a low budget cidery:
Thanks MadScientist for the clarification.

I agree that the equipment itself would be cheaper than a comparable brewery. The majority of costs come with all the other auxillary costs associated with the business.

On a small scale, there's no money in selling mostly through distributors. The general consensus amongst those starting a nano brewery (not cider making I know, but for the sake of this conversation, the same logic should apply to small cider makers) the money is selling direct to market, from a tap room.

The really low costs of starting up a cidery on your own property would help to offset costs and help make sales through a distributor more viable. BUT, you would have to be fortunate enough to already own property on which this is a feasible solution. I would say that a very small percentage of people would even have this as an option.

Based on the OP's post, it sounds like the plan is to start with small production as a "proof of concept" business model, and then proceed to rapidly expand production. The initial investment may be small IF the OP can start the microcidery on property already owned (a lot of other assumptions need to also be made here), but there will still most likely be very little realized profit, if any. The OP mentions a "test room" which I think means a tap room? Great way to sell direct to the consumer, but requires employees, and as you state, that is expensive and comes with its own hassles.

To scale up production to focus on sales through distributors is going to require sizeable capital, and most likely a big debt load. Big risk, and you risk potentially losing your personal assets if the business fails. But, more potential to be successful.

Either way, there's no real silver bullet business plan. Just make sure that whatever business model you go with, you have a solid business plan. The "proof of concept" model is a good way of learning the business side of the industry while not leveraging yourself too much (if at all) to debtors, but it will be very hard to be cash flow positive.

I'm still trying to figure out what sort of business model makes sense for myself. I'm lucky in that my wife makes really good money (as do I at my current job), so it's not a business that my family would need to rely on. On the other hand, without much scale to it, there is no real money in it, and you are just upscaling a hobby and going into the red to do so. It's not something I would do for a couple of years anyways (if at all), but it's certainly piqued my interest. Cider is the largest growing alcohol market in the USA right now, and it appeals to me to put my creativity into producing a great product that people love. Starting to get tired of all the BS that comes with working for a fortune 500 company.
 
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madscientist451

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According to this article in Forbes.....

https://www.forbes.com/sites/taranurin/2018/02/28/hard-cider-sales-slip-then-rebound/#514b9bf04a4c

Only 4% of drinkers name cider as their #1 choice. I make a decent amount of cider every year and drink cider several times a week. But I seldom order commercial cider when I'm out and I probably wouldn't go to a cider only pub if there was one around here.
If you make good money now and are serious about opening a small cider business in the future, you're best move would be to find 5-10 acres of land and start planting cider apple trees.
I'm somewhat skeptical that a cider business using commercially available apples and juice is going to work. There is just too much competition out there and cider drinkers are more knowledgeable than before.
The video I put in above shows Rev Nat's cider operation when it was in his garage. At this point he has out grown two tasting rooms and several production configurations and distributes his product in Eight states as well as Canada and Japan. He probably has investors, a ton of debt and has to spend lots of his time managing his large operation.
Rev. Nat started with commercial apples, so it can be done.
 
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