Joan Walker with Matson Consulting presented this PowerPoint on Oct. 16 at the Third International Conference on Food Studies in Austin, Texas. In her presentation, Walker explores the feasibility of adding a small-scale cidery onto an existing orchard and farm. The presentation shows what it would take for this type of operation to break-even and the scenarios that can impact the venture.

1. James Matson – Matson Consulting
Joan Walker – Matson consulting
Case Study for a Small Farm Cidery
803.233.7134 | AIKEN, SC | MATSONCONSULT.COM
October 16, 2013

2. The Family Farm Dilemma

Family farms face a common problem.
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3. Background

Case study for the feasibility of a small farm
cider in Nelson County, Virginia.
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4. Hard Cider Case Study
$12.17
Average Wholesale Price of
a Bushel of Apples
$55.00
Value of 5 bottles of hard
cider sold at $11.00 per bottle.
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5. History of Hard Cider



Safe and abundant substitute for water during colonial
times.
Growth in beer popularity coupled with prohibition lead to
market decline.
A recent resurgence has occurred.
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6. Market Growth
U.S. Production of Hard Cider
Gallons
17,322,156
18,000,000
16,000,000
14,000,000
12,000,000
10,000,000
8,000,000
6,000,000
4,000,000
2,000,000
-
6,401,562
2008
9,420,955
7,612,897
6,927,690
2009
2010
2011
2012
Year
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7. Cidery Description

Small Farm Cidery
•

On-Going Snapshot
•

Producing between 4,500
and 8,400 gallons
Focusing on the break
even point
Combination of industry
elements
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8. Product Information
Item
Retail
Wholesale
Premium 750 ml bottles
$17.00
$10.20
Everyman 750 ml bottle
$11.00
$6.60
Everyman Cider in
kegs (price/gal)
$19.00
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9. Expense Breakdown
Unforseen Costs
8%
General/Administrative
Costs
21%
Variable Costs
46%
Marketing Costs
10%
Facility Costs
12%
Equipment Costs
3%
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10. Apple Expense


Blend of cull, juicing and heirloom apples
Average cost per bushel

$12.17
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11. Variable Expense Breakdown
Taxes, Lab
and Other
Costs, 4.1%
Utilities and
Gasoline
, 1.3%
Apple
Purchase
Fee, 15.4%
Variable
Labor, 15.5%
Bottling
Materials, 11.
3%
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12. Break Even

Break even sales of 4,800 gallons per year.
 This
requires around 1,600 bushels of apples.
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13. Net Income
Net Income ($)
$46,204
$50,000
$45,000
$40,000
$35,000
$30,000
$25,000
$20,000
$15,000
$10,000
$5,000
$0
$14,113
$1,414
Year 1
Year 2
Year 3
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14. Variations in Apple Prices
Earnings (Loss) EBITDA ($)
Bushel Price
Year 1
Year 2
Year 3
Baseline
$12.17
$20,000
$33,000
$71,000
50% Increase In
Apple Prices
$19.05
$7,500
$18,000
$47,000
75% Increase In
Apple Prices
$21.30
$1,000
$11,000
$36,000
EBITDA – Earnings Before Interest, Taxes,
Depreciation and Amortization.
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MATSONCONSULT.COM

15. Variations in Apple Prices Cont.
Bushel Price
100%
Increase In
Apple Prices
$24.34
Earnings (Loss) EBITDA ($)
Year 1
Year 2
Year 3
($5,000)
$3,000
$24,000
With an 100% increase in apple prices,
the sales level required to breakeven
increases by 400 gallons.
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16. Viable Business Option

Positive study results


Results follow industry
norms.
Steady increase in profits.

Apple prices are a small
percentage of overall
costs.

Lower barriers to entry.
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17. Expansion

U.S. hard cider sales are increasing 

A receptive consumer marketplace exists.
Rural development opportunities –

Growth of youth participating in agricultural practices.
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18. Additional Information
For more information on hard cider
download our “Feasibility Study for a
Small Farm Cidery in Nelson
County, Virginia”
Visit:
http://matsonconsult.com/publications.html
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