“How do the economics of small, low-tech, agriculture-based manufacturing work? There is so much romance about these kinds of businesses, but really, what does it take to ensure a happy ever after?”
It had snowed 8 inches overnight as predicted. I was glad I had parked the UHaul truck on the side of the highway where at least I had a chance of getting it going. I scraped the snow off our old Toyota Highlander, started it up and drove very slowly down the mile of ice-covered dirt road from our farm, down and up and down again, the last hill having a grade of about 8% and landing abruptly perpendicular to the rural highway. If you lose control coming down the hill, you have to be grateful for the lack of traffic in Vermont’s Northeast Kingdom that allows you to just come to a stop right across the middle of a State highway without worrying about being obliterated, or even just cursed out. This morning I used the engine braking feature and only slid a few feet as I turned at the end, managing to line myself right up behind where I parked the truck on the shoulder of the South-bound side. I left the Toyota, hauled myself into the truck, started it up (it was a balmy 28F), and got on my way.
So began my first foray into buying apples to produce Ice Cider in the basement of our farmhouse, perhaps to sell commercially, although at that point we didn’t have grand plans. Ice Cider is a sweet, dessert-wine style alcoholic cider that was developed in Southern Quebec in the late 1990s. It was November 2007, we had acquired an abandoned farm that Spring about 8 miles from the Canadian border, and we thought Ice Cider should be a Vermont product too. I thought it would be fun to try it out ourselves. I took a short course on cider making at Cornell, I ran some numbers, I bought an apple press, and now it was Thanksgiving week, the weather could be relied upon to be below freezing for the next four months, and I was ready to get started.
I wanted to buy enough apples to make about a 100 gallons of Ice Cider. That turns out to be more apples than you would ever buy as a consumer, but not enough to make you a meaningful wholesale customer for an orchard. It took me multiple times calling the two orchards I was interested in for them to return my calls, answer my questions, and agree to sell me the apples in the packing format I could handle – no 600 lb. bins that would require a fork lift to unload. Commercial orchards will pack apples in bushel boxes (40 lbs.) for stores and restaurants, but they sell those packed onto pallets to a distributor who does the actual selling to said stores and restaurants. The orchards themselves don’t deal with the individual accounts and aren’t necessarily set up to respond. They certainly don’t deliver!
Therefore the truck.
What would these apples end up costing by the time I had retrieved them from the sunny, snow-free Champlain Valley and got them back up the icy hill to my Northeast Kingdom basement? How much would that mean once they were pressed, the juice frozen outside, a small bit of super concentrated juice extracted, then partially fermented? What about packaging – bottles, corks, labels, capsules, boxes? Then equipment, labor, and marketing? It was one big question whether we could actually make something that tasted good enough for someone who didn’t know and love us to hand over real American dollars for it. It was a whole other question whether doing so would be something that would ever prove to be financially sustainable.
How do the economics of small, low-tech, agriculture-based manufacturing work? There is so much romance about these kinds of businesses, but really, what does it take to ensure a happy ever after? What are the key success factors? What are they up against? From a broader perspective, is it a viable rural economic development strategy to encourage more of them? I don’t know all the answers, but I’ve learned a lot. So I’m going to share my experiences, and perhaps we can start a dialogue that leads to some useful insights.
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Cidernomics 