subsequent expansion of consumers’ palates, and knowledge of cider (Pet- rillo, 2014; Russel Lucha et al., In press). In 2014, there were 351 businesses producing cider in the Production United States and most of those cider producers were small in scale and were established within the last 10 years. For example, while four large and Marketing producers produced 84.3% of the volume of cider, the other 347 or 98.9% of the producers produced only 15.7% of the output (Petrillo, Reports 2014). Cider makers across multiple scales express plans to expand pro- duction (Peck and Miles, 2015). It is Apple Market Expansion through Value-added estimated that at current production levels, the U.S. cider industry requires Hard Cider Production: Current Production and an estimated 18 million bushel of apples per year (1 bushel = 40 lb = Prospects in Vermont 18.1437 kg), representing 7% of all of the apples grown in the United 1,4 2 3 States, and most large-scale producers Florence A. Becot , Terence L. Bradshaw , and David S. Conner use imported juice concentrate. According to the U.S. Association of ADDITIONAL INDEX WORDS. fermented cider, cider apple cultivars, cider processing, Cider Makers (Denver, CO), large- fruit pricing scale cider makers produce over 500,000 gal/year. A recent study SUMMARY. Hard cider production has increased annually by 50% between 2009 and 2014 in the United States while apple (Malus ·domestica) orchards managed suggests that only a third of cider exclusively for cider apples are rare. Cider apples have unique flavor, acid, and makers are producing any apples tannin characteristics suited to only hard cider production. Demand for fruit by themselves, and mostly on a small cider makers represents an emerging market for apple growers and an opportunity scale (Peck and Miles, 2015). These to diversify their production and marketing systems. The goal of this study was to factors represent a potential opportu- compare the fruit requirements of cider makers with present cider fruit availability nity to increase sales of domestically in orchards to identify opportunities and challenges for the growth of both grown apples to this expanding industries, and we surveyed cider makers and apple growers. Growers in our study market. saw a market expansion opportunity in the growth of popularity of hard cider, but Apple production for fresh mar- present apple prices were identified as a key threat. Cider makers are also expanding kets and associated intensive manage- their operations, all of those sampled anticipate increasing their production in the next five years, but maintaining adequate fruit supply was identified as a major ment to produce high-quality fruit threat. Cider makers and apple growers have both expressed interest in dual- are fundamentally at odds with the purpose cultivars that may be sold to the fresh market or for cider making. Apple needs of cider makers. Cider makers growers have expressed guarded interest in growing specialty cider cultivars while require multiple apple cultivars for cider makers have expressed a strong interest in increased production of cider- their products, including lower-grade specific cultivars. We conclude that there are a number of potentially beneficial fruit from traditional commodity des- opportunities, particularly in increased production of dual-purpose and specialty sert cultivars (e.g., McIntosh and cider cultivars, as long as price and coordination issues can be resolved. Cortland) as well as dual-purpose cultivars that may be sold to both the fresh market and to cider makers ard cider production has in- United States in recent years (e.g., Idared and Northern Spy) and creased dramatically in the with an annualized growth rate of specialty cider apple cultivars with H 50% between 2009 and 2014 and unique flavor, acid, and tannin char- revenues totaling $292.5 million in acteristics suited to only hard cider This project was funded through Vermont Working Lands Enterprise Fund Project no. 0220-WLEB-77. 2014 (Petrillo, 2014). The growth of production including heirloom (e.g., We would like to thank the participating apple the industry has been attributed par- Golden Russet and Esopus Spitzen- growers and cider makers for taking the time to fill tially to the craft beer movement, burg) and bittersweet cultivars (e.g., out the survey. 1Center for Rural Studies, University of Vermont, 146 University Place, Burlington, VT 05045 Units 2Department of Plant and Soil Science, 63 Carrigan To convert U.S. to SI, To convert SI to U.S., Drive, Burlington, VT 05405 multiply by U.S. unit SI unit multiply by 3Department of Community Development and Ap- 0.4047 acre(s) ha 2.4711 plied Economics, University of Vermont, 146 Uni- 3.7854 gal L 0.2642 versity Place, Burlington, VT 05405 0.4536 lb kg 2.2046 4Corresponding author. E-mail: [email protected]. 1.1209 lb/acre kgÁha–1 0.8922
220 • April 2016 26(2) Dabinett and Fillbarrel) (Moulton availability, cider makers would need J. Heilenbach, personal communica- et al., 2010; Valois et al., 2006). to produce the apples themselves or tion). Some cider makers grow their Presently, few orchards are managed enter into strategic partnerships. In own apples while other large cider exclusively for cider apples in the the latter case, a variety of governance makers purchase domestic and imported United States (Merwin et al., 2008), mechanisms are available including apple concentrate. but processing apples grown for apple contracts, joint ventures, and direct The growth of the cider industry sauce, fresh juice, and similar prod- investments. Strategic partnerships is strong and the market opportunities ucts were valued at $4.80 to $5.60 have drawn the attention of agri-food for apple growers will likely continue per bushel in 2013 (Fruit Growers scholars due to their potential for to grow with it. However, researchers News, 2013). Data on total acreage of creating mutual benefit among supply have identified current gaps of knowl- specialty cider cultivars planted is lim- chain partners (Conner et al., 2012; edge that could hinder the long-term ited and does not appear in the U.S. Stevenson and Pirog, 2008). growth of the cider industry including Department of Agriculture (USDA) Surveys of apple growers and the current and future needs of the or other survey metrics. However, cidery operators in Virginia revealed industry in terms of quantity of fruit cidery operators have indicated that that in order to ensure availability of purchased, preferred apple cultivars, a shortage of specialty cider apples cider apples, 80% of the cidery oper- and potential prices paid by cider exists in the United States with an ators were willing to enter into long- makers to fruit growers (Russel Lucha estimated 200–300 bearing acres term financial arrangements whereas et al., in press). Similarly, little is known of specialty cider apples out of 22% of the apple growers surveyed of the types of fruit that apple growers 380,000 total acres of apples (Fruit would plant cider apple trees if they are selling to the cider industry, the Growers News, 2015a; USDA, had contractual agreements with ci- price received, and grower perceptions 2012). In many seasons, pest out- der makers insuring fair market prices of future marketing opportunities. breaks [e.g., apple scab (Venturia in the long term (Peck et al., 2012; The goal of this study was to inaequalis) and codling moth (Cydia Versen and Kelley, 2012). compare fruit needs of cider makers pomonella)] and/or environmental Apple production is significant in with present cider fruit availability in factors (e.g., frost, hail, and prehar- Vermont. From 2009–13, the mean Vermont orchards to identify oppor- vest drop) reduce the value of com- annual value of Vermont’s apple crop tunities and challenges for growth mercial fresh market apples despite was $10.3 million (farm gate) derived of both industries. Specifically, we use of intensive management prac- from average annual production of wanted to better understand the cider tices. Much of this damaged crop is 800,000 bushels of fruit grown on fruit availability in Vermont orchards, salvaged via sales to fresh juice pro- 2560acres,withaverageyield the fruit needs of cider makers, and the cessors and in 2012 the average price of 330 bushels per acre (USDA, opportunities and challenges for the was $3 to $4 per bushel, compared 2014). While Vermont’s apple pro- growth of both industries. with $17 to $24 per bushel for fresh duction measured in bushels ranked market fruit (USDA, 2013a). De- second among New England states Materials and methods mand for fruit by cider makers repre- over that period, its growers have Two surveys were conducted for sents an emerging market for apple received the lowest used price per this project. The surveys included growers and an opportunity to di- bushel of fruit among the New England questions adapted from a similar study versify their production and market- states (USDA, 2014). Few Vermont conducted in Virginia (Peck et al., ing systems. Due to the rapid growth growers manage orchards specifically 2012; Versen and Kelley, 2012) as of the cider industry, the price of for production of processing fruit and well as questions designed by the apples for cider making is expected the majority of apples are grown for authors. In the first survey, we asked to rise in response to increased de- fresh consumption (Vermont Tree apple growers about their production, mand, which could in turn affect Fruit Growers Association, 2011). Be- sales, marketing channels, and plans to cidery profitability (Petrillo, 2014). cause of the state’s lower population grow apples for the cider industry. In From the growers’ perspective, plant- density compared with the rest of New the second survey, we asked cider ing new trees specifically for the cider England, the Vermont apple industry makers about their production, the industry represents a long-term in- relies on wholesale market channels to types of apples they purchase, the vestment that entails significant risk. sell the majority of its fruit. Presently, prices they paid, their fruit require- Horticultural knowledge of cider over half of Vermont apples are sold to ments, and their sales of cider. The apple cultivars, including potential wholesale markets through regional University of Vermont (UVM) Insti- yield, management needs, and re- fruit brokers and direct store delivery tutional Review Board reviewed and gional adaptability is limited (Peck routes (Bradshaw, 2013). Most of the approved the survey instruments and and Miles, 2015). 14 cider-making operations in Ver- methods used for the study. Cider makers have an array of mont currently purchase fruit from The sample frame for the or- options for apple procurement the spot market at similar prices to chard survey comprised of commer- (Conner et al., 2012; Hobbs, 1996). those paid by fresh juice processors, cial apple growers in the state of Juice concentrate and processing apples but cidery operators and orchardists Vermont. Commercial producers are undifferentiated and widely available, report that specialty cultivars grown were defined as members of the Ver- suggesting that cider makers can pro- for cider production are increasingly mont Tree Fruit Growers Association cure them on spot markets. However, being purchased by local cideries (VTFGA, Montpelier, VT) or as or- to obtain specialty cider apples, which for $6 to $25 per bushel (B. chards with significant acreage (>5 have a narrow range of uses and lower Hodges, personal communication; acres) on the UVM Apple Program
• April 2016 26(2) 221 PRODUCTION AND MARKETING REPORTS mailing list but not included as mem- test was conducted to test the null found a strong positive correlation bers of VTFGA. A link to an online hypothesis that the distributions of the between the size of the orchards mea- survey through LimeSurvey (version two samples are normal. In both cases, sured by the number of acres and the 2.0; The LimeSurvey Project, Ham- we rejected the null hypothesis mean- number of years in operation (rs = burg, Germany) was sent to the UVM ing that the data of the two samples are 0.703, P < 0.01), the number of full- Apple Program listserv, which reaches not normally distributed. Therefore, time year-round workers (rs =0.771, 140 stakeholders in Vermont but we used nonparametric tests because P < 0.01), and the number of full-time we estimate from program mailing they do not require normal distribu- seasonal workers (rs =0.706,P < records and membership records of tion of the data. We used the Spear- 0.05). These findings mean that farms the VTFGA that there are 40 com- man’s rho to test correlation between that have been in operation the lon- mercial orchards on that list. The two continuous variables such as num- gest are larger and either require more survey opened on 25 Aug. 2014 ber of acres and years in operations, labor or have greater cash reserves to and closed on 6 Oct. 2014. We sent and we used the Kruskal–Wallis H test pay for labor. e-mail invitations to the listserv and we to test the difference between two or Apple growers were asked about prompted the members three times to more groups of an independent vari- their 2013 crop and their anticipated respond to the survey during this able on a continuous scale such as 2014 crop (Table 1). Reported yield period. We received 24 complete re- years in operations and anticipated was higher in 2013 than what is sponses representing a response rate production changes. The results of expected in 2014. The average yield of 60% of the 40 commercial orchards the test are considered statistically in 2013 was 302.0 bushels per acre, (many orchards have multiple em- significant if the P value is less than which is similar to the 2010 harvest ployees on the mailing list). or equal to 0.1. Statistical significance and the expected average yield for The sample population for the means that the response to the same 2014 was 217.3 bushels per acre, cider makers’ survey included all com- question by different groups is not which is similar to the 2012 harvest mercial cider makers in Vermont. We likely to have happened by accident (USDA, 2013b). The degree of fluc- sent a link to an online survey to cider or by chance. tuation between years suggests that makers through direct e-mail invita- the Vermont apple industry follows tions. We identified 14 cider-making Results a biennial production, which may operations by reviewing data from APPLE GROWERS’ SURVEY. Grower present challenges in the supply the Vermont Department of Liquor respondents reported growing apples chain for both growers and cider Control (State of Vermont, 2013). on a total of 1039.5 acres representing makers. The survey opened on 25 Aug. 2014 65.0% of the bearing acreage in Ver- Growers sold their production and closed on 17 Sept. 2014. We sent mont (USDA, 2014). All respon- through several market channels. The e-mail invitations directly to cidery dents, except one who leases, most dominant market channels were operators and we prompted potential reported owning their orchard; the for on-farm sold as apple (75.0%) and participants two times to respond to average acreage of the owned orchards as juice (65.0%) whereas 40% of the the survey. We received eight com- was 44.6 acres, ranging from 1 to 210 farmers sold to wholesalers and di- plete representing a response rate acres (Table 1). On average, the or- rectly to stores. The largest proportion of 57%. chards have been in operation for 28.7 of fruits was sold on-farm as fresh We imported survey responses years and employ 2.6 full-time year- apples (33.6% of each growers’ pro- into the SPSS software (version 22; round employees, 2.7 part-time year- duction) followed by sales to whole- IBM Corp., Armonk, NY) and used round employees, 9.2 full-time seasonal salers (18.4%), directly to stores descriptive and bivariate analysis to employees, and 12.3 part-time sea- (15.3%), and on the farm sold as juice analyze the data. The Shapiro–Wilk sonal employees. In the sample, we (11.5%) (Table 2). On average,
Table 1. Characteristics of Vermont apple orchards including acreage, years in operations, number of employees, and production levels.
Orchard characteristicsz Respondents (no.) Mean Median Minimum Maximum SD Orchard size Area owned (acres) 23 44.6 15.0 1 210 62.4 Area leased (acres) 1 13.0 13.0 13 13 – Total area (acres) 24 43.3 14.5 1 210 61.4 Time in operation (years) 22 28.7 18.5 0 100 28.6 Full-time year-round employees (no.) 16 2.6 1.0 0 10 2.8 Part-time year-round employees (no.) 15 2.7 1.0 0 20 4.9 Full-time seasonal employees (no.) 11 9.2 6.0 0 35 10.5 Part-time seasonal employees (no.) 14 12.3 5.0 0 54 17.6 Orchard production levels 2013 yield (bushels) 23 18,914.9 2,200.0 0 100,000 33,056.7 2014 anticipated yield (bushels) 24 13,706.4 2,100.0 0 90,000 26,624.0 2013 yield (bushels/acre) 23 302.0 300.0 0 840 273.7 2014 anticipated yield (bushels/acre) 24 217.3 166.7 0 720 196.3 z1 acre = 0.4047 ha; 1 bushel = 40 lb = 18.1437 kg; 1 bushel/acre = 44.8340 kgÁha–1.
222 • April 2016 26(2) growers reported selling through selling within New England (rs = characteristics (Table 3). In particu- three different market channels. Com- 0.654, P < 0.05). These results sug- lar, based on the average acreage, paring the number of bushels pro- gest that higher volume producers yield, and years in operation, growers duced in 2013 to each market tend to sell to markets farther away who anticipate to greatly increase channel, we found a strong positive from the point of production. their production appear to be smaller correlation between the numbers of Within the next 5 years, 9.5% of and/or beginning their operations. bushels produced and sales made to the growers anticipate their produc- The average number of years in wholesalers (rs =0.875,P < 0.01). tion to decrease, 33.3% anticipate operation for growers anticipating in- This indicates that growers with their production to stay the same, creased production was 1.7 compared greater production are more likely to 38.1% anticipate their production to with 29.2 years for the overall aver- sell to wholesale markets. increase, and 19.0% anticipate their age, and the average yields in 2013 Geographically, most sales took production to greatly increase. The and 2014 were lower than the sample place within the county of operation terms related to anticipated produc- mean for these farmers. In contrast, (69.7% of the individual growers’ pro- tion changes were self-defined. We growers who anticipate their produc- duction), Vermont other than the compared the growers’ anticipated tion to stay the same or decrease county of operation, (18.1%) or New production changes with the size of appear to be better established be- England (15.7%). All of the producers their orchard and their present pro- cause their acreage is higher than the reported that they sold apples within duction to test the null hypothesis sample average and they have been in their county of operation, followed by that there is no difference between operation for 50 years compared selling within the rest of the state the anticipated production changes in with the sample average of 29.2 years. (36.8%), region (30%), and 10% sold the next 5 years and their size and We found a strong positive correla- apples in the rest of the United States. current production levels. The Krus- tion (rs = 0.780, P < 0.01) between Comparing the number of bushels kal–Wallis H test was statistically sig- the number of bushels produced in produced in 2013 and where the sales nificant for the independent variables: 2013 and 2014, and the number of took place, we found a negative corre- farm acreage, 2013 and 2014 yield, years in operation, indicating that the lation between the numbers of bushels and years in operation (P < 0.05, yields of longer-established growers produced and selling within the 0.01, 0.01, and 0.01 respectively) are higher than for growers with county (rs = –0.503, P < 0.05) and indicating that there is a difference fewer years in operation. a positive correlation between the in the anticipated production in Six of the growers surveyed had number of bushels produced and the next 5 years and production sold apples to cider makers while
Table 2. Market channels used by growers to sell Vermont apples and geographic locations of apple sales (respondents n = 20). Growers who sell through Mean apples sold through Market channels each market or location (%) each channel or location (%) Apple sold through each market (%) On the farm sold as apples 75.0 33.6 On the farm sold as juice 65.0 11.5 To wholesalers 40.0 18.4 Directly to stores 40.0 15.3 To sweet cider processers 35.0 7.6 To cideries 30.0 8.4 Other 15.0 5.1 Apple sold through each location (%) Within county 100.0 69.7 Vermont, beyond county 36.8 18.1 New England 30.0 15.7 Rest of the United States 10.0 0.5 Do not know 15.0 3.7
Table 3. Anticipated production of Vermont apple growers in the next 5 years compared with farm characteristics including acreage, yield, and years in operation. 2013 mean yield 2014 mean yield Mean time in Production changes Respondents (no.) Mean area (acres)z (bushels/acre)z (bushels/acre) operation (yr) Greatly increase 4 6.5 1.1 9.6 1.7 Increase 8 26.5 160.5 148.3 17.6 Stay the same 7 94.7 507.8 343.8 50.3 Decrease 2 40.0 720.0 421.8 51.5 Total 21 46.7 306.1 213.1 29.2 c2(2)y 7.9* 15.4** 12.2** 12.7** z1 acre = 0.4047 ha; 1 bushel/acre = 44.8340 kgÁha–1. yResults of Kruskal–Wallis H test; *P £ 0.05, **P £ 0.01.
• April 2016 26(2) 223 PRODUCTION AND MARKETING REPORTS three growers who had not sold to and Jonagold are commodity dessert savings could be realized for cider cider makers reported that they were cultivars; Baldwin, Ida Red, and fruit production over the fresh mar- interested in selling to cider makers in Northern Spy are dual-purpose culti- ket if postharvest inputs and prac- the next 5 years. Of the growers who vars; and Fillbarre, Roxbury Russet, tices including refrigeration, cold had sold to cider makers, four entered and Wickson are specialty cider culti- storage atmosphere modification, a handshake/verbal agreement with vars (Table 4) (Merwin et al., 2008; packing, and transport could be re- their buyer(s) while one of the Moulton et al., 2010; Proulx and duced or eliminated. The total com- growers reported using all their ap- Nichols, 2003; Valois et al., 2006). bination of input reductions across ples in their own cider. Differences in fruit disposition, how- the production and marketing chain The proportion of apples sold to ever, may have affected choice of may make cider apple production cider makers ranged from 0% to 100% cultivar for cider production. Out of profitable given price reductions in of the total production with an aver- the six growers who identified culti- labor and inputs compared with the age of 8.4% of production sold to vars that they would consider grow- fresh market. cider makers. Growers sold 13 differ- ing for hard cider, the smaller grower Differences were observed in ent cultivars to cider makers. ‘McIn- who used 100% of his apples for his reported prices received and target tosh’ was sold by three growers while production was interested in growing prices for apples sold to cider makers. ‘Macoun’, ‘Cortland’, and ‘Empire’ a mix of dual-purpose apples (four For the purposes of the survey, we were sold by two growers. These cultivars listed) and specialty cider define target price for the growers as cultivars represent commonly grown (five cultivars listed). The other the price that would cover their costs dessert apples in Vermont and are not growers who ranged in size between of production and provide an ade- generally produced specifically for ci- 40 and 210 acres listed a mix of quate profit margin; growers self- der production (VTFGA, 2011). dessert and dual-purpose cultivars reported the price received for cider Apple growers were asked which and two specialty cider cultivars. It is apples as well as their target price. The cultivar of apple they would prefer to likely that the grower cidery prefers to price paid by cider makers was lower grow in blocks managed specifically grow specialty cider cultivars because than the target price of growers for for hard cider production. They listed those are limited in supply, whereas specialty cider/bittersweet apples and 21 different apple cultivars with Bald- dessert fruit may be more easily and tree-picked dessert cultivars and it was win, McIntosh, and Northern Spy cheaply obtained. On the other hand, equal for dessert cultivar culls from listed by three growers and Ida Red large wholesale-market producers are fresh market packing lines (Table and Roxbury Russet listed by two likely interested in managing existing 5). The average price difference rep- growers. Cultivars listed as a number acreage of commonly grown culti- resented a potential loss of $5.45 per one choice by at least one grower vars specifically for cider production bushel for specialty cider/bittersweet included Fillbarrel, Ida Red, Jona- by reducing labor and input costs cultivars and a loss of $2.25 per gold, McIntosh (by two growers), required to grow blemish-free fruit bushel for orchard-run dessert culti- and Wickson. Of these, McIntosh for the fresh market. Further costs vars. Growers wish to sell drops to cider makers, but target price is above packing line culls. This is because Table 4. Apple cultivars identified by growers as favored for cider apple growers would need to shift labor production organized in categories based on marketing or juice characteristics from harvesting higher-valued fruit and the number of times it was reported by growers. to picking up drops during the grow- Dessert cultivars (no. of Dual-purpose cultivars Specialty cider cultivars ing season, whereas packing line culls growers reporting) (no. of growers reporting) (no. of growers reporting) are already harvested with the main dessert fruit crop and thus, do not McIntosh (3) Baldwin (3) Bulmer’s Norman (1) represent a separate labor activity. Cortland (1) Northern Spy (3) Fillbarrel (1) When asked about threats and Empire (1) Ida Red (2) Kingston Black (1) opportunities for the industry in the Gala (1) Hudson’s Golden Gem (1) Medaille D’Or (1) next 5 years, growers identified seven Jonagold (1) Liberty (1) Muscadet Dieppe (1) threats: climate change and changing Macoun (1) Roxbury Russet (2) Orleans Reinette (1) weather patterns (35.3% of pro- Mutsu (1) Wickson (1) ducers), foreign imports (29.4%), Zestar! (1) overproduction (23.5%), fruit prices
Table 5. Prices received by apple growers, target prices, and average price difference per bushel for apple cultivar categories sold to cideries. Price received ($/bushel)z Target price ($/bushel) Avg price difference Apple cultivar category Respondents (no.) Mean Minimum Maximum Mean Minimum Maximum ($/bushel) Specialty cider/bittersweet 2 8.25 4 12.5 13.7 10 17.5 –5.45 Dessert cultivar orchard run 2 5.75 4 7.5 8.0 6.0 10.0 –2.25 Dessert cultivar packing cullsy 1 7.5 7.5 7.5 7.5 7.5 7.5 0 Dessert cultivar drops 1 – – – 7.5 7.5 7.5 – z1 bushel = 40 lb = 18.1437 kg, $1/bushel = $0.025/lb = $0.0551/kg. yFruit rejected from commercial packing lines for cosmetic blemishes or low fruit color.
224 • April 2016 26(2) and cost of production (17.6%), reg- 9,041,200 gal in 2014, a 0.05% in- volume produced does not appear to ulations (11.8%), uncertainty around crease. When removing the largest determine how cider makers distrib- growth of the cider industry (5.9%), cider marker, which is also the most ute their products. and change in consumer tastes established producer, the number of Geographically, the sales oc- (5.9%). Four opportunities identified gallons produced was expected to in- curred within the county of operation for the industry in the next 5 years crease by 8.1%. The median produc- (5.0% of the production), Vermont were: growing apples for hard cider tion for 2013 and 2014 is 1350.0 gal. beyond the county of production (55.5%), increased demand (27.8%), The data are positively skewed above (35.0% of the production), New En- direct marketing (22.2%), and new the 1.0 threshold (skewness statistic = gland (30.0% of the production), or apple cultivars (11.1%). 2.82) and is considered to be a sub- the rest of the United States (15.0% of CIDER MARKERS SURVEY. Eight stantial skewness. Seven of the survey the production). There was no corre- cider makers responded to the survey respondents intend to increase their lation between the volume produced representing 60% of the Vermont production within the next 5 years in the past year and selling within the producers. The major cidery in the and one respondent anticipates to county of operation (rs = –0.775, P = state, which is the second largest pro- greatly increase their production. 0.225), rest of the state (rs = –0.618, ducer in the nation, is substantially Increase and greatly increase were P = 0.191), region (rs = –0.783, P = larger than the other respondents, self-defined by the respondents. 0.118), or country (rs = 0.300, P = and may be considered an outlier as However, the Kruskal–Wallis H test 0.624). This indicates that geographic its responses to production-related did not reveal a difference (P £ 0.1) location does not significantly deter- questions skew the average response between current level of production minate how cider makers distribute upward. Therefore, in reporting the and projected growth. their production. cidery survey results we present the On average, 65.7% of cider was In 2013, four of the respondents median as a better representation of sold through wholesalers. This high purchased apples, two used a mix of the central tendency. The maximum proportion can be explained by re- purchased apples and apples from values are not presented for cider quirements that alcoholic beverage be their own orchard and two only used makers to ensure confidentiality of sold to a wholesalers with specific apples from their own orchards. Four the largest producer’s responses. license to resell alcohol (Vermont of the respondents purchased whole Cider makers have been in oper- Department of Liquor Control, apples while two of the respondents ation for a median of 4.5 years and 2015a). Any direct sales to consumers bought apple juice. The median employ 2.0 full-time employees and must take place on premise or at quantity of apples purchased was 3.8 part-time employees (Table 6). regulated events such as farmer’s mar- 450.0 bushels (Table 7). Growers These numbers indicate that the Ver- kets and the cidery must hold a retail who used apples from their own mont cider industry is fairly small, license (Vermont Department of Li- orchard reported that these apples which is similar to the industry at quor Control, 2015b). We found no represented a median of 45.0% of the national level apart from a few correlation between the quantity of the fruits used for their cider pro- major producers (Petrillo, 2014). cider produced in the past year and duction. In the sample, we found The responding cider makers selling to wholesalers (rs= –0.111, P = a strong positive correlation between produced a total of 9,036,600 gal in 0.812) or direct to consumers (rs = the quantity of fruit purchased 2013 and expected to produce –0.200, P = 0.800) indicating that the and the number of years in operation
Table 6. Operational life, employee number, production level, and market channel characteristics of Vermont cider makers (respondents n = 8).
Mean Median SD Cidery demographics Time in operation (years) 7.9 4.5 8.1 Full-time employees (no.) 25.1 2.0 65.6 Part-time employees (no.) 3.8 2.0 4.5 Cider production in gallonsz 2013 cider production 1,129,575.0 1,350.0 3,180,145.8 2014 anticipated cider production 1,130,150.0 1,350.0 3,179,915.4 Cider market channels (as % of total cider produced) Sales to wholesalers 65.7 75.0 41.7 Direct sales to consumers 33.6 20.0 41.9 Other 0.7 0.0 1.9 Location of customers (as % of total cider produced) Within county 12.1 5.0 26.6 Vermont, beyond county 36.4 35.0 34.5 New England 30.0 30.0 25.2 United States outside New England 20.8 15.0 20.8 International 0.6 0.0 1.1 z1 gal = 3.7854 L.
• April 2016 26(2) 225 PRODUCTION AND MARKETING REPORTS
Table 7. Mean and median quantity of fruit procured as apple or juice by cideries in 2013.
Apple purchase Respondents (no.) Mean Median SD Apple purchased in 2013 (bushels)z 4 2,525.0 300.0 4,516.9 Apple juice purchased in 2013 (gal)z 2y 300,750.0 300,750.0 423,203.4 Total amount of apple purchased (bushels) 6 41,783.3 450.0 97,172.0 Apples in cider from own orchard (%) 4 47.7 45.0 52.0 z1 bushel = 40 lb = 18.1437 kg; 1 gal = 3.7854 L. yOne respondent reported only purchases of apple juice sourced from Vermont orchards, and not juice sourced from other states or countries.
Table 8. Apple cultivars purchased by cideries in 2013 organized in categories Spitzenberg, and Golden Russet based on marketing or juice characteristics and the number of times it was (Table 10). Cider makers expressed reported by cider makers. interest in a wider variety of specialty Dessert cultivars Dual-purpose cultivars Specialty cider cultivars cider apples than dessert or dual- (no. of cideries reporting) (no. of cideries reporting) (no. of cideries reporting) purpose cultivars. When asked about threats and McIntosh (2) Golden Russet (2) Kingston Black (2) opportunities in the next 5 years, Empire (1) Northern Spy (2) Reine des Reinettes (2) cider makers identified three main Honeycrisp (1) Ashmead’s Kernel (1) Wild Apples (2) threats: low quality cider (71.4%), Jonagold (1) Calville Blanc (1) Hewe’s Virginia Crab (1) apple supply (57.1%), and competi- Mutsu (1) Cox’s Orange Pippin (1) Mixed bittersweet (1) tion (28.6%). Two opportunities Pinova (1) Hudson’s Golden Gem (1) identified were the development of Ida Red (1) new cider products and the improved Roxbury Russet (1) quality of ciders (75.0%) and growth Esopus Spitzenburg (1) of the market for cider (37.5%). Discussion
(rs = 0.941, P < 0.01) indicating important’’ that the apples came from The goal of this research project growth in production over the years. Vermont and 25.0% responded that was to assess the fruit needs of Ver- Twenty-one different apple cul- Vermont sourcing was ‘‘important.’’ mont cider makers and present cider tivars were purchased in 2013, and six Additionally, 42.9% responded that fruit availability in Vermont orchards, cultivars (Golden Russet, Kingston it was ‘‘very important’’ that apples and to identify opportunities and Black, McIntosh, Northern Spy, came from New England and 42.9% challenges for the growth of both Reine des Reinettes, and wild apples) responded that it was ‘‘important.’’ industries. First, we found that Ver- were purchased by two different cider None of the cider makers reported mont continues to have a robust apple makers. Additionally, two cider entering into formal business agree- production industry. Growers in this makers purchased 10 cultivars of ap- ments with apple orchards. Hand- sample report yields follows the aver- ple, one cidery purchased four culti- shake agreements and repeated ages for the state (USDA, 2014); and vars, and one cidery purchased only purchases were the methods used by most anticipate increased production one cultivar. Apple cultivars pur- four cider makers to secure apples in the future. Growers in our sample chased by cider makers include des- while two cider makers call orchards were more likely to sell to local mar- sert, dual-purpose, and specialty cider for availability. The main difficulty kets than within the state as a whole cultivars (Table 8) (Merwin, 2008; faced by cider makers when purchas- (USDA, 2014). They see opportunity Proulx and Nichols, 2003; Valois ing apples was limited supply of in the growing popularity of hard et al., 2006). specialty cider/bittersweet apples. cider, while receiving adequate prices Specialty cider apples were the Two cider makers reported not hav- is a key threat. Finally, on average, the most expensive type of apples (Table ing difficulties and one of these two prices they receive are below their 9). The three cider makers that pur- cider makers grows the apples it uses target prices for all types of apple chased these apples paid an average of and while the other has limited needs cultivars. Second, the Vermont cider $19.0 per bushel while the lowest due to its small size. Cider makers industry is fairly small that is similar to price paid for dessert cultivars was expressed concerns due to projected the industry at the national level apart $4.30 per bushel. Dessert fruit were growth and potential inability to from a few major producers (Petrillo, purchased as orchard run (i.e., di- source the apples they need at a price 2014). Cider makers’ operations are rectly from the field without post- they can pay. also growing, with the majority of the harvest grading) or as culled fruit Cidermakerslisted27different sample anticipating increasing pro- that were rejected from packing lines cultivars they would prefer to source duction. These cider makers see op- postharvest. None of the cider makers locally. Kingston Black was the most portunity in the growth of the hard reported purchasing dessert fruit that popularcultivarasitwaslistedbyfive cider’s popularity and increase in had dropped before harvest. cider makers. The next most popular product quality. Adequate fruit sup- The geographic origin of ap- cultivars, which were mentioned by ply was identified as a major risk. ples mattered as 62% of the cider four cider makers were Wickson, Cider makers pay an average price makers responded that it was ‘‘very Ashmeads Kernel, Dabinett, Esopus above the growers’ mean target price
226 • April 2016 26(2) Table 9. Prices paid by cideries to growers for categories of Vermont apples based on marketing or juice characteristics.
Prices paid Respondents (no.) Mean ($/bushel)z Median ($/bushel) SD Specialty cider 3 $19.00 $20.00 $1.70 Dessert (orchard run) 2 $4.30 $4.30 $3.80 Dessert cultivar packing cully 1 $5.00 $5.00 – z1 bushel = 40 lb = 18.1437 kg; $1/bushel = $0.025/lb = $0.0551/kg. yFruit rejected from commercial packing lines for cosmetic blemishes or low fruit color.
Table 10. Apple cultivars favored by cideries to purchase locally for cider involving shared investment would production organized into marketing or juice characteristics and the number of accelerate the realization of this op- times it was reported. portunity. Contracts in the cider in- Dessert cultivars Dual-purpose cultivars Specialty cider cultivars dustry in France and England have (no. of cideries reporting) (no. of cideries reporting) (no. of cideries reporting) been used for decades and 90% of cider apples are grown under con- Cortland (1) Ashmeads Kernel (4) Ashton Bitter (1) tracts (Capper, 2014; La France McIntosh (1) Calville Blanc (1) Bittersweet (1) Agricole, 2011). Contracts vary in Organic empire (1) Cox’s Orange Pippin (1) Chisel Jersey (1) length from 18 to 30 years and terms Pinova (1) Esopus Spitzenberg (4) Dabinett (4) usually include how prices are de- Golden Russet (4) Ellis Bitter (2) termined, the cultivar orchards are Liberty (1) Foxwhelp (1) growing, and the growing and har- Lodi (1) Kingston Black (5) vest practices (Capper, 2014; Conseil Northern Spy (3) Major (1) de la Concurrence, 2007). It is com- Roxbury Russet (1) Orleans Reinette (1) mon for cider makers to purchase the Reine des Reinnette (1) entire production of an orchard Somerset Redstreak (1) (Smith, 2008). These long-term con- Stoke Red (1) tracts aim to cover the producing life Wickson (4) of orchards and offer financial stabil- Yarlington Mill (2) ity to the growers and ensure cider makers access to the apple cultivars they want in the quantities that they for specialty cider apples but lower found that 80% of the cider makers need. These long-term contracts, than the growers’ target price for who were surveyed would be willing which usually aim to be mutually dessert apples. This confirms that to enter into long-term financial ar- beneficial, are thought to encourage cider makers prefer specialty cider rangements to secure specialized ap- improvements in growing practices apples cultivars and their willingness ples while 22% of the surveyed and waste management (Smith, to pay for these apples is higher than growers would plant cider apple trees 2008). Future research to better un- their willingness to pay for dessert if they had a contractual arrangement derstand grower and buyer percep- apple cultivars. Finally, cider makers with cider makers insuring fair market tions and behaviors could inform and apples growers have both prices in the long term (Peck et al., mechanisms to spur contracts and expressed interest in dual-purpose 2012; Versen and Kelley, 2012). partnerships, which are acceptable cultivars for cider making. Apple Joint ventures, shared investments, and beneficial to both parties. Sec- growers have expressed limited inter- and other governance mechanisms ond, as identified in other studies, est in growing specialty cider cultivars can ensure all parties are committed research into specific management while cider makers have expressed to long-term and mutually beneficial regimes for cider apples can lower strong interest. Planting new apple partnerships. production costs for growers and cultivars is a long-term investment Our results suggest implica- help them maintain a competitive and commitment that apple growers tions for future research. First, position in the marketplace (Peck most likely will not undertake unless there is opportunity for mutually and Miles, 2015). An area of inquiry they have the assurance that cider beneficial trade in specialty cider to reduce labor costs and address the makers will buy the apples when the apples. There is unfortunately a mis- barrierofaccesstoadequatelaborin trees start producing. This is particu- match in cider makers’ preferred is mechanical harvesting. Most of the larly acute given the limited sales cultivars and current production. cider apples are mechanically har- opportunities for bittersweet culti- We can reference that virtually none vested in Europe. A team of re- vars: growers would be at grave risk of the specialty apple cultivars de- searchers in the Washington State if cider makers chose not to buy these sired by cider makers were grown in has worked on retrofitting a rasp- highly specialized apples. This implies a significant quantity in Vermont berry harvester to harvest apples a need and opportunity for partner- according to a recent industry sur- (Miles and King, 2014). Finally, ships between apple growers and vey (VTFGA, 2011). Increased as- though not addressed in this study, cider makers. Contracts are one surance of future purchases from the role of nurseries is important to method of governing the partner- cider makers, in the form of con- consider as they need to be able to ships. A similar study in Virginia tracts or even formal partnership provide these apple cultivars and
• April 2016 26(2) 227 PRODUCTION AND MARKETING REPORTS present supplies are substantially cultivars to ensure economic viability production & orchard management in the shorter than demand (Fruit Growers of both the apple growers and the Pacific Northwest. Washington State News, 2015b). cider makers. Univ., Pullman, WA. Conclusions Peck, G. and C. Miles. 2015. Assessing Literature cited the production scale and research and This study compares current and extension needs of U.S. hard cider pro- prospective production and sales of Bradshaw, T. 2013. Strategic Planning for ducers. J. Ext. 53:5FEA10. 14 Jan. 2016. apples in Vermont with cider makers’ the Vermont Apple Industry: Planning for
228 • April 2016 26(2) Valois, S., I. Merwin, and O. Padilla- Vermont Department of Liquor Control. Versen, S. and M. Kelley. 2012. Survey of Zakour. 2006. Characterization of fer- 2015b. Licensing Instructions. 3 Mar. cideries in Virginia. 2 Dec. 2015. mented cider apple cultivars grown in 2015.
• April 2016 26(2) 229