Apologies for my week-late final post on Cider Con – I was laid low with a cold and moving into a new house, so I neglected my follow-up.

However, here is another summary / partial-transcript depicting Friday morning’s panel of Cider Makers.  Again, not an exact transcript, but my best attempt

Cider Market Review 2012-2013 Outlook – A Panel Hosted by Ben Watson

• Tilted Shed Cider: California-based company, We started 2010.  We fell into cider because we loved to grow our own food, grow our own drink.  Scott is a fermentation mad scientist, and if he can make alcohol with something he will.  We had been doing some market farming at that time and something about cider captured us.  We couldn’t believe it could be good.  Took Peter Mitchell’s courses, read the cider books.  Moved to California.
• Tieton Cider Works.  Washington. Started in 2009.  30,000cases this year, distributing to 7 states.  &th generation orchardists,  Wine background.  In 2008, Campbells decided to start propagating 40 varieties of trees to see how they would do.  Seattle or Portland area, not uncommon to see 4 taps out of 12 of cider.  A really good region.  Nation’s first cider bar in Portland.  We’ve been developing a brand that people enjoy, producing high end drinkable ciders that go well with the market trends that are pushing it.
• Bantam Cider, Boston.  Very new cider company – two women.  Started a few years ago, launched product last January.  Family background in winemaking for one of us.  Being in Massachustettes, apples are really part of the culture.  There was awareness of cider, but in the past couple of years, cider has become more known.  We started making a little as a hobby, and it has evolved.  Mass is a pretty fantastic market – an interest in local, artisanal products, an entrepreneurial spirit. A thriving community focused on innovation, which has allowed us a great opportunity for collaborations with other local producers, as well as a thriving craft beer market.
• Virtue Cider, Chicago.  First cider on the market in Chicago last April.  Started Goose Island many years ago in Chicago – long experience in the craft beer business.  I see a lot of similarities.  We chose to do our cider in Michigan, as it has a great history of apples.  Lot of great cider makers and craft beer scene there.  We look at craft cider very similar to the way the craft beer scene has grown.  I think this whole craft beer thing has gone so local, and I think the same thing will happen with cider.  There will always be room for the big national brands.  Beer guys and wholesalers and retailers are really excited about cider, because they see that is where the growth is.  In Chicago, we don’t have producers in the city, though there are outside and in the suburbs, but we think there is room.  We had Woodchuck on tap at Goose Island in the early years, because that was all we could get. I learned more about beer talking to other brewers, rather than at the institute.  I learned lot more about cider talking to other cider makers, rather than taking the Peter Mitchell class.

Ben Watson: What are the demographics of Cider?  Who are your customers?  At the Cider Salon, the crowd that waits in a long line outside of the church community center is getting younger and hipper every year.  What do you see?  Who are the new cider drinkers?

• Virtue Cider: in the cateogry or 24-27 year olds, drink preference for cider has skyrocketed.  In Chicago, the bars who order our cider every week – At Hopleaf, we are always in the top 3 of the drinks they sell.  Going young and very very crafty with beer drinkers is where we will continue to go

Ben: Cider has always been the red-headed stepchild of beer or wine, and it is a fools errand to compare it to beer or wine.  What is everyone else’s perception

• Bantam Cider: Our top selling accounts are the craft beer package stores and craft beer bars.  Not excluding wine drinkers, and we see all the time that the younger people are open to it.  The older side of the demographic is more cautious.
• Tilted Shed: We make cider in wine country, so the culture there is heavily steeped in wine.  Our primary market is the Bay area.  I find there isn’t such a huge age split.  We get equal interest from the beer geeks as the the wine appreciators.  We are getting dedicated cider drinkers from both beer and wine drinkers, from both young and older drinkers, from people who are really into exploring.  We do get recognition of the food friendliness of our cider.  Alice Waters is our patron said of food and wine.  We have real appreciation for the localization of products.  People want to know the story of food.  It’s less about category and more about the connection to the land.  Our market is a bit younger – the majority of craft ciders in our market are in 750 mls – a lot of our drinkers are coming from the wine market.  For us, the wine drinkers are more apt to pick it up, which could be from the bottle format. We’ve decided to put it on tap to get hold of the craft beer drinkers.  I think as the bottle format changes, younger drinkers will come on.  The older crowd doesn’t know about it, whereas the younger crowd does have a preconceived notion of it.

What preconceived notions do people come to your cider with?

• Tieton: people think of a fresh pressed cloudy juice, who think hard cider is going to be the same.  And when they taste dry cider, it is difficult.  It was a matter of getting people to understand that ciders aren’t alcho-pops, or Mike’s Hard Lemonade .
• Tilted Shed: To help people understand that we are not a sweet fizzy pop – though there is a room for every style – we don’t do that.  Because we are in a wine region, and we are geeks about the cider apples, we compare to the way grape varietals make good wines.  By geeking out about it, people start thinking about it the way they do about craft beer or wine.

Audience Question: Are there solid numbers to tell our bankers where the cider market is going?

• Virtue: I think that is something we can look forward to asking the conference and the association in the future.  Cider has grown 20% in a year according to someone in the craft brewing industry.  The preference data is even more exciting, because that is where it is going.  Supermarket and scan data from big chains doesn’t quite capture the on-premise numbers – it lags behind.

Audience Question: Where do you see the consolidation of the market and how does it compare to the craft brewing industry?

• Virtue – With brewers, the vast majority don’t know where their product comes from.  I think part of the story of cider is that 40% are growing their own fruit and most know where their apples are coming from and are local.  I think that is really cool, and that makes us different and unique.  I like to call wine, “cider made from grapes.” But I think that is where the staying power of cider is going to be.  There is always room for the big guys, who can’t use local fruit, because they need to keep their supply chains.  And I think everyone in this room needs to respect that.  They’ve been at it much longer than any of us, with a few exceptions.  The big guys are the ones with the money who can help us get the legislative stuff going.  I saw this in craft beer, where the little guys thought the big guys were bad.  I think we all want to be successful.  We’ve got to act like a family.  We can have our disagreements in this room, but when we leave we need to say all cider is good.  I think all cider is good, and I’m really proud of being part of this new cider association.

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Apple Market Panel, with Greg Peck – Virginia Tech; Panel: David Watkins – Fruitsmart, Steve Wood – Farnum Hill Cider, Kevin Zielinsky –
E.Z. Orchards, Mike Beck – Uncle John’s

This spirited panel brought together professional commercial orchardists who are also cider makers to discuss the pressing issues of apple supply for the growing cider market.  With an overview of last year’s weather and apple crop, these folks launched into the uncharted territory concerning the development of an orcharding industry catering to the cider market’s desire for cider varieties.  The core issues remain ones of risk – who is going to take on the risk of trialing apple varieties in different US regions?  Who is going to take the risk of financing the propagation and planting of cider varieties as commercial ventures?  While all of these orchardists have taken on growing cider varieties in a small way through their own interest, they largely insist that the cider makers will need to take the step of ensuring a market for cider apples if growers are going to commit to the large investments necessary for planting and maintaining orchards over long periods of time.  Long term contracts seem to the buzz word on orchardists’ lips, though they also recognize that cider could be an alluring new market with far more dependability than the current pack-apple market.  Here’s some highlight points of discussion:

• EZ Orchards, Oregon – Not a large producers of apples, more pears.  Those that are are Fresh.  Small acreages of cider varieties and older varieties such as Newton Pippin which are being used for cider
• Uncle John’s Cider, Michigan – 2012 was tough.  US Apple data is different than MI apple data.  We estimate a 90% crop loss.  We bring 12 varieties to the market: Winesap, Northern Spies, Jonathan, Reds, Yellows, Galas, Breaburn, Fuji.  We are a processing state: 65% of total crop.  Lots of Manufacturing: Gerber, Sarah Lee, etc…  For a cider maker you aren’t going to find more varieties anywhere else.  2013 is looking great.  Processors have very low inventories.  As a grower, we are looking forward to good prices.
• Steve Wood, Farnum Hill Cider,  New Hampshire –  2012 horrific early spring.  A lot of the cider fruit we grow is fairly late budding, so frost damage can be less for those.  Good Cider crop, despite erratic apple crop.  Market was as strange for processing fruit as for everything else, due to low availability.  We sold cider crop for 50 cents a pound.  Rest of the crop at 15-18 cents a pound. We could have sold much more for cider than we did sell.  Next year, hoping for a huge crop nation wide of cider fruit, so I can find out how much of the enthusiastic market that existed last year will be as interested this year.  What is encouraging to me, is that the cider fruit market had been calling me before the crop shortage – I am encouraged to think that the value of proper cider apples is high and supportable.  We may cut back on our high end specialty market for heirloom apples.  But I don’t think we would have been able to charge more for our premium apples the cider makers are interested in if they had been organic.

Questions

On investing in varietal specific production for the cider market

• One of our big decisions is the long-term 20-year investment in the orchard.  We are looking at where cider will peak?  We want to do a long term contract.  I don’t want to speculate on putting in cider apples if there won’t be demand in a few years.  We are doing 1200 trees per acre.  It takes a lot of commitment for someone to grow them.  If you want commercial guys to grow you a lot of cider apples, I think you are looking at a contract.  It is a specialty type of growing.
• There are a lot of question marks about these varieties as well.  We need a lot of investment from the universities as well, or a contract.
• There are more commercial growers budding more bittersweets than ever.  But cider makers have to pay the growers.  For my money as a grower, I see this as a stable investment, because I see it going up for long time, compared to a pack apple.
• The universities are not spending any money on cider or organics research.  They are sponsored by the Ag companies for high-end apples.
• Fruit used for cider apples does not have a second use in the fresh market, so there is no other market stream for them, making it is a real risk for the grower
• Growing cider apples is also still not very well understood and best practices not online for orchardists, especially the English and French varieties
• Mass market ciders are not using bittersweet, because it isn’t available
• How far along does the cider industry need to be before you will sign on to a 20 year contract?  Looking ahead?
• A lot of the English cider varieties don’t do well in our area (Oregon).  We are looking at what will grow well and what we will use, but not to the extent that we will gamble on planting 500 acres.
• To find what we could grow in New Hampshire, we trialed a few hundred varieties, and ended up with a handful.  This was private research.

On being a maker or a grower – pros and cons of growing your own apples, contracting, and sharing innovation risk

• If you are a cider maker thinking of buying an orchard, think twice, because growing apples is a demanding business.  The growing of fruit to that standard will demand you be a good accomplished  grower who knows their soil and their climate.
• (Audience member response) I know I will never be a commercial grower, but I want to plant an orchard to be a database for the growers in my area.  There is risk out there that people will need to take to put these trees in the ground.

• The need for investment in targeted research in quality cider-apple growing
  • Do higher quality apples make higher quality cider?  One of the most important parts of fruit production is the level of production you can expect year to year.  Since Long Ashton, there hasn’t been any research about how micro-managment of growing can affect the qualities of apples.
  • If you are out-sourcing apples, you need to know about the situation of those apples – as a grower of our own apples, we watch all of those levels – sugar, nitrogen, ex – and we treat cider apple trees differently than we treat the fresh market apples to get optimum sugar in those apples for fermentation.