Cider Making - Making a Living

[Hayley Bishop]

Being fairly new in cider making, been doing it about 4/5 years on tiny scale for personal and friend purposes, but this year is our first 'commercial' year as such.

Is it possible to make a living out of it as a small scale producer? we were planning on the 7000ltr for this coming season (for next year) and of course thats still large hobby small scale production, but is it possible to make a good living for two people out of cider, and if it is what sort of volume would one be needing to make?

Im finding the costs of everything (to sell it in) like bottles, BIB, cartons etc so very expensive, the cost of going to an event, licences, wholesale prices etc etc it seems to me that you give it away and just have a enough in your pocket for the local free paper!!

Also, does the 7000ltr mark apply to the individuals or the business?  We currently have two orchards, in two different counties, if one were to have 2 separate places and companies could there be an advantage to that?

I do wonder if the hard work, the cost of it all actually does make you money, but then with the likes of Sandford orchard that say they are 100% natural artisan cider, they must be making money as why do it?  i can see of course that companies like thatchers, and ashton manor dont actually use a lot of apples in their cider so the cost is dramatically reduced.

Any thoughts, experiences would be nice, good or bad, as essentially we like making cider and want to sell it, but would love it to become our full time job and living :-) even if it is pie in the sky

Thanks

[Albert Johnson]

Hi Hayley, 

You can make a living. What sort of living depends on what you want and how you measure things. I work at Ross on Wye Cider & Perry.

Making 7,000L is enough to do this - but you need to turn almost all of it into bottles. The product value and margin is much better. The competitiveness of the west country for bag-in-box makes making money much more difficult. Of course bottles are harder to sell, so there's a trade-off. 

Plus, it depends what bottles you make. Are 7,000L of yet another medium sparkling cider going to change the world? It depends on your marketing. 

You need to sit down and think about what product you want to make. Certainly for us, we make cider primarily because it gives us joy (and we have the large advantage and responsibility of being an apple farm) - so we are willing to accept we could make more money working in an office, because the lifestyle we live is enough to have relative security and comfort. 

Different products have different advantages and there are many many different ways to make cider. As a 7k producer you have the advantage of not paying duty - this means you could make 8.4% sparkling cider and have a very competitive price, right there at the top of the market (if your cider is good enough!). If you were paying duty, it's £2.83 per litre above 5.5% iirc. 

If you have two premises, as far as I know there's nothing stopping you both registering separately. But that's a matter for an accountant or a lawyer. 

If you want to talk more then please email me directly, and we can have a quick phone call. But this is all my personal opinion! 

Best

Albert 

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[NICHOLAS BRADSTOCK]

I would say that, in the UK, HMRC would assume that evasion of duty were intended if 2 cider marketing companies were set up to take advantage of the 70hl exemption provisions - particularly if the respective operators, and indeed the operations, were linked in some way.  Not a good way to start!!

All the HMRC Public Notices including the distribution and warehousing notices should be checked for more specific restrictions.

Good luck though

Nick

iPhone

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[Martynas Puodziunas]

Hello, guys,

that's indeed pretty interesting topic for beginners to cover.
If someone with real life experience could elaborate more on this - that would be great.

cheers!

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[brian goetz]

I’ve been wrestling with this topic for some time and have found https://cidernomics.com to be interesting/useful.

[Vince Wakefield]

Albert has hit it on the head, doing bag in box to the trade you will make very little, bottles directly to the end user will get you the best profit, I would say you need at least 3 ciders, a dry, a med and a sweet, expect the dry to be only 5 to 10% of your sales, med and sweet around 45% each.  If you can manage a couple of SV’s in a med it gives more choice for the customer.  If you only have 1 and the customer is not keen on it they will walk, when there is a choice they are more likely to buy one of them.  Don’t be tempted to compete on price with other makers, work out a realistic price and then charge that, dropping prices is just a race to the bottom, lots of work and no money, believe in your product and charge accordingly. If you do sell through retailers work out your price and stick to it, they will try and beat you down at any opportunity

 

Look at 3L pouches they sell well but at a lot less profit, but also less work.

 

Do research on what other cider makers products are like to get an idea of the quality you will need to hit. I am currently on a research trip myself, camped up at ross on wye’s yew tree inn so will be checking out Alberts work a bit later.

 

 

Vince

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[jitd...@aol.com]

Well first of all you have to decide what a "living" is, then divide this by the number of litres you plan to produce and add this to your expected cost per litre and assess whether you could reasonably expect to sell it all at this price.  Unlike our financially dim and morally pusillanimous potential UK Prime Minister do not conflate gross contribution with net contribution.  You have to factor in all costs, including admin, packaging, transport, cost of broadband to read this e-mail, etc. then add in the profit contribution. 

Your big problem will be that like most agriculturally derived products, your elixir is basically a commodity and by itself will command only rock bottom prices.  To make a living as a small producer you have to provide product "differentiation" in order to command a premium price.  The most obvious way to do this is by making exceptional quality cider, but fortunately there are also other ways such as presentation.  I was recently given a nattily produced carton of 4 bottles of cider from a monastic establishment in Yorkshire by neighbours returning from a holiday as a thank-you for looking after their chickens in their absence.  Like Greeks bearing gifts I always view anything with a Yorkshire connection with guarded caution calling to mind autochthonous luminaries such as Arthur Scargill, Jimmy Saville, Geoffrey Boycott, and my worst nightmare the odious Michael Parkinson knocking on my door at midnight to sell me a death plan and a stair lift whilst repeatedly telling me that not many people know that Jimmy Cagney was a distinguished "hoofer".  But I digress.  The point is that the Yorkshire cider was awful, thin, and reeked of sulphite - as one might have expected from that benighted territory, but my neighbours would have parted with considerably more cash than for a bottle of Strongbow. 

So you should will need to factor in the cost of art-work and production of distinctive packaging - handy to bump up the minimum purchase from one bottle to 4 or 6. 

Next you need to consider "concepts" (marketing gurus never have ideas) such as the cider value chain, and the route to market.  The value chain is the different value your product has at various stages in its life from its start as a heap of festering apples unfit for the supermarket, to the price of the bright shiny bottle on the shelf in Fortnum's wine and spirit department.  As the product gets closer and closer to the point of sale its price/value increases.  The trick for you as a small producer is to control as much of that chain as you can profitably.  My guess, and this is only a guess without knowing your precise circumstances, is that you will do best as a small producer gearing your production to what you can sell from your own premises, and gearing your footfall at the farm gate to sell all you can produce.  You would then have the ancillary benefit of making sales of all the usual old crap like tea-towels, home produced eggs, nobly artisanal cider mugs hand-crafted by the local potter, local apple cake, tourist maps of the Devon cideries, perhaps even Xmas geese that graze your orchard, etc. 

If you can't sell all you make you need a "route to market" i.e. you need to lug the stuff around from store to pub to restaurant or plug into some sort of existing supply chain - perhaps a local craft brewer who wants to add a cider to his range. 

The big thing is to understand the net margin per litre that you need to make to earn a living and work from there. 

JD

 

 

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From: Martynas Puodziunas <martynas....@gmail.com>
To: cider-workshop <cider-w...@googlegroups.com>
Sent: Thu, 11 Jul 2019 13:32
Subject: Re: [Cider Workshop] Cider Making - Making a Living

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[Mike Beck]

I am not sure what is allowed in the region you are in.  The closer you can sell that cider to the end  user or directly to the end user the better your margins will be.  In our own cidery the intent was to be on farm sales only by the pint and take home jugs.   We still do a whole bunch of that but also try our best to compete with larger brands in 1 region of our huge country at far less margin.  If my ego could deal with draft or placement envy better I would probably be in less markets and more profitable.  I milk every opportunity to sell a pint for someone to tipple while they are here. I also built a playground next to cidery so if they have kids they stay longer.  Food  can also keep people around longer but the margins in food are mostly razor thin.

This works well if you have good locale,  I am on busy road here in the states much like Ross on Wye is on fairly busy road in the UK.  However, I have seen droves of people drive “off the beat’n path” for cider or other craft beverages.

Good luck

Mike in the middle of Michigan - USA

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