Younger consumers drive growth of hard cider market

Brad Page used to work in construction.

Now he’s building a business – in hard cider.

Page is among a growing number of hard cider makers across the United States who are tapping into a market fueled heavily by millennials who have a taste for hard cider. Compared to beer, wine and spirits, cider is showing the most growth in on-premise consumption at 1.7 percent in volume and 3.8 percent in dollars. That’s according to a Nielsen/CGA study on cider trends looking at 2016 versus 2015 that was released at the industry’s CiderCon gathering earlier this year in Chicago. While off-premise sales are down overall, the craft category is substantially up in off-premise sales for 2016.

That isn’t lost on cider-makers like Page. He and his wife, Kathe, opened Colorado Cider Company in Denver in 2011. They bought an irrigated hayfield about four hours away and planted 3,000 trees, mostly cider apple varieties, starting in 2012.

“I’d been in the craft beer business back in the late 1980s and ‘90s, and we had sort of looked to the Northwest as the canary in the coal mine,” he said. “The craft beer movement sort of started on the West Coast.

“I was fairly confident (hard cider) was going to take off (too). I didn’t know it was going to be quite as quick as it’s been.”

Michelle McGrath is executive director of the United States Association of Cider Makers, which has about 1,500 individual members including about 200 cider companies and another 200 “cideries-in-planning.” She said the rise in hard cider started back in 2011 and 2012.

“It was the perfect storm of riding on the coattails of the craft beer expansion, and the gluten-free trend,” she said.

Combined with growing consumer interest in locally sourced and grown products, those trends fostered an “exciting new sector of the beverage industry for consumers to explore.”

McGrath estimates there are around 700 cideries in the U.S., though the exact tally isn’t known because the federal license needed to make cider is a winery license. Some wineries and breweries do dabble in cider, but the majority are stand-alone cideries, she said – many with beer or wine-making backgrounds.

Page started off by taking a week-long cider-making class to learn more of the winemaking process in contrast to beer. Cider is more time consuming than beer, but doesn’t take as long to be ready for consumption as it generally doesn’t improve with prolonged aging.

“Though once you get things fermenting it’s not that different from beer,” he said. “So as far as the equipment and process went, I sort of had a head start.”

As Dan Armerding, tap room manager at Seattle Cider Company in Seattle, Washington, explains it, beer-making entails breaking starches down into simple sugars, small enough to be eaten by yeast and then using hops for flavor.

“In cider making, you have all those raw components … you have sugar (from the apples) to ferment, you have acid – in pears, it’s actually citric acid, the same as lemons and limes,” he said. “You already have those aromatics – apples are fragrant and have a great aroma to them.”

Raw materials

Many hard ciders are made from juice purchased from suppliers. McGrath said that’s the best way for companies to make money based on the price point.

The Pages order most of their juice from the Northwest. They only got their first harvest from their own apple trees last year, and made their first cider from their own orchard this past fall.

“We’ve tried a bunch of varieties – a couple bittersweets are one category, which means high tannins and high sugar,” he said. “We’re narrowing things down. Most of the information on these varieties are either from France or England or New York state, which is not really applicable to 5,500 feet altitude and a very dry climate, so we have to figure out what grows in our conditions.”

The juice they use is a combination of dessert apples – Granny Smiths, Golden Delicious, Fuji and Pink Lady.

“There’s not a lot of cider (specific) fruit planted. It’s sort of chicken and egg as to what the demand is,” Page said.

“As people become more sophisticated, they’ll demand more of these traditional ciders made from apples specifically for cider.”

Seattle Cider Company also makes its year-round, seasonal and some limited dry and semi-sweet ciders from juice that’s a proprietary blend of Granny Smith, Fuji, Red Delicious, Golden Delicious and Gala apples, all from Washington, said Public Relations and Marketing Manager Maura Hardman. They offer others made from heirloom or single varietal apples as well.

Their ciders tend to be toward the dryer end of the spectrum.

“Our dry cider is zero on the brix scale,” she said, referring to the way industry measures sugar content. “We ferment all the sweetness out of it.”

McGrath said the growth in hard cider hasn’t had a huge impact on the apple industry yet.

“The juice is often made from culls, so it might be creating a market for culls,” she said.” But an apple grower can make a lot more money selling a dessert apple for consumption than for juice.”

At the same time, more heritage apple orchards and cider apple-specific
cultivars are being planted in the United States.

“But the consumer hasn’t matured enough yet to appreciate the value of that apple, so it’s difficult for orchardists to make a living using cider apples,” she said. “Some cider makers are growing their own and are very good at targeting their sales to an audience that does appreciate the value of that fruit.”

Tieton Cider Works in Yakima, Washington, grows some of the apples used in its ciders and processes all of its juice on site. Cidermaker and co-owner Marcus Robert said the company was founded by orchardists Craig and Sharon Campbell, who had some extra acreage and so planted older heirloom and specialty cider fruit varieties in 2008.

“It evolved from there,” Robert said. “They expanded that orchard … to about 55 acres of heirloom and bittersweet apples.”

While “a lot” of Tieton’s approximately 14 varieties of ciders are made from the Campbells’ apples, they also purchase other growers’ apples to process into cider. The company also processes custom juice blends for other cider makers.
Most processors change their products up with added ingredients.

“We make a hops cider and a Michigan cherry cider,” Page said. “We do a few things with botanicals, we have lemongrass and lemon balm in one; one with honey and lavender.”

They also use yeast to create a mead-cider hybrid.

Seattle Cider’s seasonal releases mean spring ingredients might include basil and mint; summer means a raspberry, blackberry and blueberry combination. Cucumber hibiscus, lavender lemon and tangerine turmeric were among flavors in a recent experimental series.

Investments pay off

It’s not cheap to get into the hard cider business.

“It’s capital intensive … all stainless steel, tanks and refrigeration, and glycol to control temperature and filtration,” Page said.

There is some savings over beer because there’s no need for a brew kettle and mash tun for converting starches in crushed grains into sugar.

“There’s different techniques, but it’s really about sort of being sanitary and controlling your temperature in a lot of cases, and either settling by aging or filtration,” Page said. “There’s a lot of similarities in the wine industry and beer industry from an equipment standpoint.”

Jimmi Sukyz, owner of Quality Tank Solutions in Oconomowoc, Wisconsin, said her company has been selling more stainless steel tanks to hard cideries over the last five years – up about 20 percent. Brewers typically go with a tank that has a cone-shaped bottom to collect the yeast, which gets reused, while cider makers typically want a dish, or flat, bottom because yeast isn’t reused.

Page said packaging can also be expensive. When the Pages started, they were selling cider in 22-ounce bottles, but he said market demand has shifted to 12-ounce single-serving containers.

“We bought a used bottling line three years ago maybe, and we just put a canning line in,” Page said. “It wasn’t a hard decision to do that (cans) because there was a lot of demand.”

Page said sales were expanding at 100 percent a year, though that slowed to around 25 percent this year. While they started production in about 600 square feet, today they’re in 11,000 square feet and operate a tasting room on weekends as they distribute throughout Colorado and neighboring states.

Seattle Cider also reports stunning growth. When the company started in 2013, it was producing 200,000 gallons annually. In 2015, the yield had jumped to 378,000 gallons; 2016 sales were around 650,000 gallons. They’re distributing in 14 states and four countries, in cans, bottles and kegs.

Tieton produced under 150 cases in 2008. This year, working in a 35,000-square-foot facility with about 20 employees, they expect to output about 100,000 cases that get distributed in 14 states including Florida and New Jersey.

“It’s here to stay,” Robert said. “These regional cideries — and there are over 100 now just in the Northwest — are going to be the base of the growth in the cider category for at least five years.

“Probably right now cider is about 2 1/2 percent of the total beer market and it will probably get up to 5 percent in the next five years, of the total adult beverage market – beer, wine and spirits. I think that is an attainable number.”

Hard Cider Resource

The United States Association of Cider Makers offers a certified cider professional program similar to that of the beer industry’s cicerones or wine’s sommeliers.

The group is also about to launch what it’s calling its Lexicon Project, aimed at helping consumers, bartenders and sommeliers develop a better understanding of the language and guidelines that define cider. By standardizing the terminology that measures levels of sweetness and dryness, they’re hoping to help consumers make better choices and understand that not one taste governs all and build a bigger following among the over-40 crowd.

“The New York Cider Association is pioneering this dryness scale,” said association Executive Director Michelle McGrath. “We’re watching and discussing the potential to take it nationally.”

The association’s next annual conference, CiderCon, is set for Jan. 31-Feb. 2, 2018, in Baltimore and will feature several sessions on orcharding for cider.

— Kathy Gibbons, contributing writer