Business Plan for an orchard and cider producer.

[Kait MacMurray]

Hello,

My name is Kait and my husband and I are in the process of collating research for starting our own commercial cider orchard and "brewery" in Ontario, Canada.  I am currently at the financial projections stage of creating our business plan.  I had a few questions and I was wondering if I could get some advice from more experienced cider producers.

1) What is a good range of yearly production from a 2 person team?  Particularly if one of us is able to devote full time hours to production.  Assume we have the necessary equipment for high volumes of production (hydraulic press, endless demijohns, etc.)  I am trying to figure out what level of production is required to make the business feasible.

2) How many bushels of apples would be needed to support this production?  We will likely start pressing cider before our own trees are mature and importing apples from elsewhere in Ontario and even New England and I am trying to get supply chain planning going.

If anyone could share their expertise, maybe sharing their yearly production and how they obtain apples?  It would help me out with my business plan a lot.

Thanks,

[Dave]

I would say a bare minimum of 40 tons of apples and if you are intending to use demijons at £3 a piece it will cost you £60k just for them.

First part of your plan should be larger containers.

[Claude Jolicoeur]

Le dimanche 17 août 2014 18:31:08 UTC-4, Kait MacMurray a écrit :

My name is Kait and my husband and I are in the process of collating research for starting our own commercial cider orchard and "brewery" in Ontario, Canada.  

I assume you mean "Cidery" or "cider house" here... This has nothing to do with beer - unless you want to produce beer in addition to cider.
 

1) What is a good range of yearly production from a 2 person team?  Particularly if one of us is able to devote full time hours to production.  Assume we have the necessary equipment for high volumes of production (hydraulic press, endless demijohns, etc.)  I am trying to figure out what level of production is required to make the business feasible.

I have a friend in France who alone produces 35000 bottles annually - well, he does hire a helper some days during fall.

2) How many bushels of apples would be needed to support this production?  We will likely start pressing cider before our own trees are mature and importing apples from elsewhere in Ontario and even New England and I am trying to get supply chain planning going.

For 1000 bottles, you need 750L of cider, about 850 L of juice to start with, and about 1.2 ton of apples. For something like 35000 bottles, then we are talking between 40 and 50 tons of apples. Multiply by 50 for the number of bushels.

[John Mott]

Hi Kate,

I suggest that you start with a copy of the goverment publication Starting a Winery in Ontario to get an understanding of the tax regime. Cider is taxed like a non VQA wine. Then you can work back from your target retail price to the amount that you retain in your pocket to cover variable costs and overheads.

80 bushels (4 bins) of apples to produce 1,000 litres is good guideline.

In order to properly project your costs (particularly your variable costs), you must have a clear plan for distribution: bottles, cans, or kegs sold to licensees or to retail customers? The economics vary considerably among these alternatives.

As someone who grows apples and makes cider, I can tell you that labour availability is a much greater constraint on apple production than cider production. Pest and weed control (particularly organic), pruning, and picking are very labour intensive. Imputing minimum wage to the value of your labour, I would venture to say that growing your own apples is at least twice as expensive as buying them - and that assumes a mature orchard.

One more thought...you should consider IBCs as possibly a more economical fermentation vessel than demi-johns.

John Mott
Beaver Valley Orchard & Cidery
Kimberley, Ontario

[Andrew Lea]

On 18/08/2014 13:22, Dave wrote:
> if you are intending
> to use demijons at £3 a piece it will cost you £60k just for them.
> First part of your plan should be larger containers.

I agree but to avoid confusion I would also point out that a "demijohn"
in the US and Canada refers to a vessel roughly 57 litres in volume (15
US gallons). Whereas in the UK it refers to a vessel 4.5 or 5 litres in
volume (was once 1 Imperial gallon but is now more usually a metric
'gallon' ie 5 litres).

A bit of a difference ;-)

Andrew

--
near Oxford, UK
Wittenham Hill Cider Portal
www.cider.org.uk

[Dave]

I didn't know that Andrew, every day is a school day.

I also notice I got my sums wrong and it wouldn't cost as much as I said by a long way.  

[Andrew Lea]

On 19/08/2014 17:13, Dave wrote:
> I didn't know that Andrew, every day is a school day.

The trouble is that the word 'demijohn', which is believed to be a
corruption of a French word 'dame jeanne', refers in origin to the
vessel shape (narrow neck, thick body, possibly with small handles,
sometimes encased in wicker) and not to its volume. Occasionally in the
UK you will even find half-gallon or smaller sizes of 'demijohn'. But by
convention here it is normally taken to be a gallon in volume. In other
countries it is something different.

[Lee Smeaton]

I am producing on a fairly small scale - using a fruit shark scratter and a 30litre vigo barrel press. I am finding I am getting around a gallon (5ltrs) of juice from every 7kg of apples. - dont forget to factor in a few percent of losses for racking off, sampling etc. 

 

My issue is purely time - as I am not selling I cannot justify the machinery (I had to hide the fruit shark from her indoors) but that said I can have 15-20 gallons scratted & pressed and in a fermenting bin for a few hours toil when i get in from work each evening.

 

I had the option of getting a couple of 500 litre and 1000 litre containers but went for 50 litre sealable food grade plastic barrels - I work on the basis that if there is a problem then you only lose 50 litres not 500 or a 1000 (plus i only pay £3 for a second hand  50 litre barrel - guaranteed only been used in the food industry)

 

regards

 

Lee

[Kaitlyn Brady]

Thank you all so much for your responses this has been very illuminating!

[Richard Hyde]

I’m in the same place as you too.  Just a bit further along.  Start up in British Columbia.  Here to get a land based license for production you need to make/sell 4500 litres a year.  Under that you are a privateer and not allowed to sell/market your cider.  Swap it, give it to friends etc.  The “Commercial” producer is a different ball of wax.  You make for the Government and they take all you have, market etc.  You get the commission rate at that point.  So for us “Land Based” is the way to go.  Growing our own apples too (I think) exempts us form Federal Excise at 15%.  Booze PST her is 10% an GST 5%.  But in Ontario you probably get stuck with HST?

My 10 year plan is to plant 20 Acres of Tall Spire Orchard.  More than I’ll need.  I’ll sell or U-Pick the rest.  Maybe offer a U-Brew service on site too.  But I will get enough apples in year 1 to hit the 4500 litres.  That’s about 7/8000 KG of apples I guess.

The tall spire will yield (my calculations) 22 to 30 Tonnes an acre once in full production.  Our property will also sustain, Agir-Tourism RV/Camping, seasonal Tasting lounge and place to have basic Ploughmans style food offerings.  As the Orchard grows we will add Bee’s and then have Honey too.  Lots to do but I’m ready for it.

RH.

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