What does 'scaling' a business mean? Let's talk about CANS! - Part 1

Hey, wow, it’s been about two years since I wrote a blog! Time flies when you run a growing business, I guess.

I had a conversation with some new friends yesterday and we started talking about scaling our business, and within that, how our growth over the years has allowed us to ‘achieve scale’ when it comes to cans. As we talked, she mentioned that the whole thing was very interesting and provided insight into an area she never even knew was a thing, so I thought I’d share it through a two-part blog.

A quick note on the phrase ‘achieving scale’. This is one of those phrases that business people say a lot but is sometimes hard to wrap your mind around tangibly. So, I wanted to talk about a very specific way we’ve been able to achieve scale - or start to - as we’ve grown, and why businesses are always trying to do it. Join me as we take a deep dive into the cost of aluminum cans!

CAN LABELS

This is a stickered can. Lots of aluminum shining through.

So, you have a 12oz aluminum can in your hand. It could be filled with Diet Coke, a La Croix, a can of craft beer, or one of our ciders. The can has a label on it to let you know what is inside the otherwise identical silver aluminum can. There are four main ways to label that can.

A stickered can. This is the simplest option. Get a sticker designed with all the pertinent information, print it, and stick it on the can! Ta-da! The plus side of stickered cans is that you can order as many or as few stickers as you want, so there’s very little barrier to entry on that side of things. Another pro is that each individual sticker is really inexpensive.

The con side of stickered cans is that you will have a gap where the sticker ends, and the bottom and top of the can will have a strip of the aluminum can. Also, unless you are planning on hand-stickering, you’ll need a semi-automatic labeler, where you set a can down, set up your sticker, and then turn the can so the sticker attaches straight, which will cost not too much but will take a whole lot of time. Or you could get a fully automatic labeler, which will cost about $20,000. That $20K is the reason a lot of breweries don’t go with stickered cans when they’re starting out.

This is a shrink-wrapped can. See the clear sleeve?

A shrink-wrapped can. In this process, you design your label and a professional printer creates a sleeve that goes over the can. The sleeve is then shrink wrapped to tighten up and affix. You can tell a can is shrink-wrapped by turning it upside down and finding the clear plastic wrapper, which you can then feel off completely and be left with a naked aluminum can again.

Shrink-wrapping looks a bit more professional than a sticker because it doesn’t leave any gaps in the design. You will need to place a bigger order of shrink-wrapped cans for each brand you have, but this number is in the hundreds, so it’s not a big problem to start shrink-wrapping cans. Also, you don’t need any special equipment for shrink-wrapping; the cans arrive ready to fill. This is why most breweries go with shrink-wrapped cans to start. Yes they cost more per can, but you don’t have to buy a piece of equipment or have a bunch of people to make it happen. When we first put our cider in cans in early 2018, we started with shrink-wrapped cans.

A printed can. Printed cans are what any large-scale beverage uses. This is when, using actual plates and frames and ink, your image is pressed directly onto a sheet of aluminum before it is formed into the can shape. This removes any distortion of the image, which can happen with shrink-wrapping, and, most importantly, is much cheaper than all of the other options because you aren’t buying a bunch of stickers or wrappers, you’re just buying the design of the plate and frame image, which then exists for all reprintings. The pros are obvious: no distortion of the image, and a much lower price per can. Cons? You have to buy 200,000 at a time.

SHRINK WRAPPED VERSUS PRINTED CANS

So, when we started canning in 2018, we paid about $0.35 per shrink-wrapped can. That doesn’t sound like a whole lot, but it’s just the labeled body of a can; you also have to buy a can lid, a pack-tech, and a cardboard flat for every case of cider you sell. When you add all of that up, it’s about $10 per case just in the packaging materials, not including any of the actual cider in the cans. That’s a lot!

On the other side of things, printed cans cost less than half of shrink-wrapped cans. Yes. They’re about $0.15 per can. That makes the packaging materials in a case of cider made with printed cans only about $4.50 a case. Guys, we sell THOUSANDS of cases of cider in a year! Switching from shrink-wrapped cans into printed cans will save over $100,000 a year on the LOW end with a practically identical (and most would say ‘superior’) experience for the customer. You may be wondering why anyone would ever choose to use shrink-wrapped cans, and the answer is because of ~ scale ~. More on that in Part 2.

Growing Pains Part 2

The last blog I published was in June, called Growing Pains Part 1. In it, I described some of the big projects we’d undertaken in 2021, which led to serious growth and serious growing pains (namely, always being on the verge of running out of cider).

In that blog, I promised to write a second part that was less of a report on what was causing the growing pains and focused on more how businesses can manage big growth phases. Of course, we’re a relatively young and small business, so this blog about big growth is coming less from the place of ‘this is what other businesses should do’ and more from a ‘this is what we’re trying to do’ place.

Here are some of the pitfalls of big growth and how we’re attempting to manage them.

1. Growth costs a lot, and usually it costs a lot before you’ve actually grown revenues.

   In late 2019 (let’s just forget 2020 happened, because we remained at a static state for most of that year), we were flirting with the edge of maxing out our production equipment. That meant that we couldn’t really make much more cider without having to make major investments in our infrastructure and equipment. Over the years, Joseph had come up with work-arounds and tricks to squeeze more cider out of what equipment we had, but if we wanted to make any more cider, we’d need to put hundreds of thousands of dollars toward it. This was because we couldn’t just buy a new tank. If we increased our tank capacity, we’d have to cut a new concrete pad that could handle the extra weight. If we did that, our glycol chiller wouldn’t be able to keep up with new tanks, so we’d have to get a second chiller. But if we did that, we’d have to upgrade the electrical service and the power to the building. And if we did all of those things and could make more cider, our bottleneck would be Pasteurizing it all, so we’d need a better solution there.

   A lot of small businesses find themselves in similar situations. You either have to stop when you’ve maximized your equipment, or you practically have to double everything at once, which costs lots of money and is based on the general ~vibe~ that you’ll be able to grow your sales enough to cover the added expense of this growth. If you are able to find the money to do a major expansion, there are still several possible outcomes. You might find out that it’s going to take longer for sales to pick than you expected and you might run out of cash or even go out of business because your debt burden becomes too much. You could adapt and start offering other services to cover that gap in revenue until sales pick up, like making cider for someone else, or canning cold brew coffee for a local business. In the best situation, your gamble that the demand is out there turns out to be true, and you’re very grateful you had the equipment to handle it.

   We are really fortunate to have a lender we’ve worked with since we opened who believed us when we said we needed money to capture this anticipated interest. Luckily, we were right that the demand was there and that the sales would be there on the other side. PHEW. But these major growth periods present a super risky phase for any company, and it puts of lot of promising companies out of business.

2. Growth means a lot of new people, and potentially, a change of culture. One thing that’s been really important to us since we opened is our company culture. We have a short mission, vision, and values statement as a company, and one of the few values that made the cut was ‘Be nice.’ We want to provide excellent customer service. We want to provide good wages and a good work environment. And we also really want our employees to be nice to each other; to assume the best of each other and give the benefit of the doubt when there are conflicts. To say, “Hey, how are you?” when you see each other instead of, “Did you do this yet?”

   We knew, as we were on the verge of opening the restaurant, that we were about to hire a bunch of new people and that our culture could change pretty quickly if we weren’t on top of it. We had a very intentional meeting with all of our manager-level staff to reiterate what our values were, how we expect managers to behave and handle conflict, and how we want lines of communication to flow. This meeting definitely helped remind everyone of what our expectations were.

   A couple months after we opened the restaurant, we started to sense some tensions rising in our staff, both within small teams and across teams. It happens - any time you double the number of people in your company and ratchet up the stress several notches, the culture is at risk. We had to model ourselves the kind of conflict management we want to see in our managers in a few tough conversations. We had to let some people go who just didn’t fit into the vibe we were trying to cultivate. And we had to publicly acknowledge some of the ways we needed to do better.

   This is the kind of thing that we’ll have to pay close attention to for as long as we’re in business, but a strong culture of people who support each other is worth the effort it takes.

3. Growth means most, if not all, systems have to get redone. We have never been the best at creating replicable systems, but we were managing. Then, we added 8 farmers markets every week, a new full-service restaurant, a huge cider subscription program, and grocery sales onto our tenuous-at-best-processes, and most of our systems buckled under the pressure. We’re doing our best, gritting our teeth and holding on as we get through this extremely hectic and stressful busy season (people love cider in the fall!), but we know that we have a whole lot of shoring up to do during our down season this winter. We’ll (hopefully) have some time to review what worked in 2021 and what didn’t, and to create new systems. So while 2020 was the year of Pandemic Pauses and 2021 was the year of Big Growth, we hope that 2022 will be the year of Replicable Systems and Delivering on 2021 Promises. It’s not so catchy, but it will be pretty important if we want another growth phase in the future (2023??)

Thanks for hanging with us as we’ve grown this year; without customers who are passionate and involved, we wouldn’t have the opportunity to take these big steps.

Growing Pains Part 1

Hey everyone! It’s been a few months since I last wrote a blog about how things are going at the cidery, so I thought we might be due for an update. I want to share a bit about some big projects we’ve been working on so far this year (Part 1), and then wax poetic about growing a business and the ups and downs that big growth can bring about (Part 2 - coming soon).

With no further ado, here’s what’s causing some of our current growing pains (but GOOD growing pains).

1. Our Cider Subscription Service. After we started shipping our cider in early 2020, adding a subscription service quickly became the next goal for that segment of our business. During COVID, so many people bought cider to get shipped to their homes; it was really heartwarming. Because we’d furloughed most of our staff in March/April/May, I was the one who would go in and fulfill these orders, and I can’t tell you how many times I saw an old friend of mine from college, or a friend of my parents, or a cousin or aunt or uncle buying our cider. It truly meant so much to me, and I’m so glad I got to connect with these people, even in a small way like putting ciders into a box and writing a quick thank-you note, during the tense early days of COVID.

   We started working on the subscription program a few months later. There were so many fine details to figure out; Jackie, who is running the subscription program, spent so much time on the phone with VinoShipper, asking how to make it possible for someone to gift a subscription, or to change their address, or to swap out a cider that they didn’t want. We had a goal of getting 250 subscribers in our first year.

   In February, before we had even sent out our first box, we went to a panel discussion at CiderCON about how to make a successful subscription service. Two of the presenters were other cideries who were best in class - they each had roughly 250 members. Jackie and I were surprised - we hadn’t sent out our first box and we were getting close to those numbers.

Fast forward just a couple of months and friends, we have OVER 400 subscribers! We’re truly shocked and so happy that people around the US are getting a chance to try our Ciders of the Month. We pour a lot of effort and love into those ciders, so seeing the Instagram stories of people excited to open their boxes in Alaska and Maine is so wild!

2. Farmer’s Markets. Another thing we learned during COVID was that Farmer’s Markets are a good way for us to reach new customers. We signed up for the Fishers Farmer’s Market in early 2020, before the pandemic hit, and we were so glad that we did - we were able to exceed our regular event sales in a year when literally every event was canceled.

So, in true Andrea fashion, I decided we should expand on the program in 2021 and signed us up for 5 markets throughout the state. And then Jackie signed us up for three more. That’s right. Every Saturday, we are at 8 different farmer’s markets, from Fort Wayne to Bloomington. We had to hire about 30 part-time event staff. We had to buy a cargo van to transport cider every Saturday. We had to get six new branded tents and POS systems and a couple storage units and just after we finish one Saturday and take a breath, we have to get ready for the next, for TWENTY-TWO WEEKS IN A ROW!

To be honest, we may have bitten off more than we can chew here. It’s going great, we’re selling tons of cider to tons of new fans and I couldn’t be happier. But we’re literally running out of cider, even though we just upgraded our equipment and added on staff so we could grow our cider production. We’re having to make some hard choices, like who gets cider first (our tasting room customers, our farmer’s markets, our subscribers, or our many wholesale accounts throughout the state). When I try to prioritize that list, I come up with 5 different groups as our number 1 priority and then decide we just have to make more cider, somehow.

3. Moving our Tasting Room/Opening a Restaurant. Oh, this little thing? The one we’ve been working on for three years now? Yeah, it’s happening, and it’s happening FAST. Everyone hates moving, and with good reason - you have to decide what you want to move and what gets trashed, it’s messy and dirty and sweaty and stressful. When it’s a business that’s moving, you have to add on the layer of closing for a couple of weeks, pulling staff who are already busy to help with moving/painting/building stuff, communicating with your customers that soon, they’ll have to go somewhere else to get your cider, updating all of your business paperwork with a new address…on and on it goes.

Part of our move includes majorly expanding our kitchen - from the literal space and equipment, to the staff and the menu. You may have heard, but there is a major crunch in the industry right now for kitchen and front-of-house employees, so finding the right staff is tough. But the new space is going to be SO GREAT! It’s big a beautiful and light-filled and spacious, and our food is going to be amazing, and we truly can’t wait to have the move finished and the space open to you all because it’s a major upgrade. Please visit us!

I’m going to stop here. As you can see, we’re working on a lot. And there are a few BIG things we’re still holding back on sharing from you, so stay tuned for those.

But, I can’t end without saying that this kind of growth, while challenging and tiring and a bit of a logistical nightmare, is really, really exciting, especially after 2020. We feel so honored to be in the place we’re in, representing what cider can be when it’s made in Indiana. Thank you, and stay tuned!

Behind the Scenes Highlights of our 2020 Cider of the Month Gift Box

Did you hear the news? We just released a gift box that features the 12 unique Ciders of the Month that we released in 2020! We wanted to review 2020 through the lens of this gift box in the blog today. This is from my perspective (Andrea) - if you want a LOT more information on how the ciders were made and how they should be consumed, you need to get one of the boxes to access to some awesome behind-the-scenes content written by Joseph, our Cidermaker. :)

The Background: Though we’d done the CoTM program for four years, we had never canned the releases. We decided in mid-2019 that we wanted to go that route, and had spent the latter half of the year designing the label, picking the flavors, and brainstorming how to make the program even more successful. In fact, we’d already decided to save some back and release a gift box at the end of the year!

This gift box is a great walk down memory lane, as each cider is tied to a specific time in a really wild year. Here are a few behind-the-scenes stories from some of the releases.

February, 2020 - Blueberry Lavender - Every year, Aaron and I and several of staff members go to CiderCON, which falls over the first weekend in February. This year, Devour Indy, a city-wide dining event and the Blueberry Lavender release both fell on February 1st, which happened to be a Saturday, and also happened to be when a lot of our staff would be in Oakland, CA. Now that we’ve done this for four years, I get a bit of a spidey-sense when a release is going to be big, and Blueberry Lavender was going to be BIG. In preparation, I even sent out one of the rare Facebook messages to people who were interested in the release, telling them to NOT come on the 1st if they didn’t have to because we were going to be so crowded. We opened up our warehouse and added tables and a second layer of staff to ease the pressure. I compulsively checked the sales from my phone and texted our tasting room staff for status updates from San Francisco. Apparently it was a well-controlled zoo and everyone loved the cider! It’s one of our most popular releases from 2020.

April 2020 - Mango Lassi - This was our first post-shutdown release. We offered carryout cider only from mid-March through the end of May, and we were running things with limited hours and staff. We had no idea what to expect of a cider release during COVID. Luckily, there was a lot of community support for small businesses in April, and our fans really showed up! It was so fun to have our team here, busily getting orders ready, answering the phone as people pulled for curbside pickup, and running cider outside. It felt great to be busy and gave me a sense that maybe we could make things work during the COVID shutdowns after all. Little did we know we’d be doing these same things for the rest of the year!

May 2020 - Margarita - We always try to do a fun cider that could pair with Mexican food for our May CoTM because of Cinco de Mayo, and this year we thought a Margarita cider would fit the bill. But BOY did we underestimate how popular this cider would be!

A little peak behind the curtain on this one: when we process a finished cider, it goes from a Brite tank, through our canning line (which at the time was a manual canning line that did 8 cans per minute), into a hot water bath for 20 minutes, cooled in a cold water bath, and then for the CoTM brand, run through a manual labeling machine and finally hand-stickered.

For some reason, we thought it’d be fine if we canned Margarita starting at 10am on the morning it was released. We’d have the first batch of cans (8 cases worth) out of the Pasteurizer by 11, and they could be labeled and ready to go by the time we opened at noon. We were still carryout only, so how hard could it be to keep up?

Just what we needed during one of our most stressful releases ever - a huge, expensive, long-awaited piece of equipment to be delivered!

WRONG. As often happens, it took a little longer to get started than we thought, and then things didn’t run as perfectly as we hoped once we got going. Meanwhile, the number of online pre-orders climbed over 100, most of which included at least a 4-pack of Margarita and several that wanted an entire case. We were behind before we even opened. Our meticulously lined-up pre-orders were sitting on the bar, but as customers popped in without a pre-order, we stole cans from the pre-ordered pile to keep the lines down. But then someone who had ordered hours before would come in and we wouldn’t have their order ready! Or in the heat of the moment, we’d forget to mark an order as picked up and we’d re-make an order that wasn’t necessary. It was just a mess the entire day. Bartenders who had been furloughed but came by to pick up some cider were immediately asked to help run orders outside, or label cans as they came out of the Pasteurizer. Customers were calling asking if it was okay that the cider they just picked up was still hot.

The whole time it was happening, I was thrilled that we were making money and getting people a cider they were excited about, but I was STRESSING about the lines outside.

Oh, and did I mention, right as we opened and started to realize how nutty the day was about to be, a freight truck with our new canning line arrived, which pulled three of the production guys from canning into one of the most intricate, time-consuming, and stressful forklift removals we’ve ever had?

Yeah. It was a wild day that I will never forget.

Watermelons coming in fresh from the fields! They were in the cider within 12 hours.

August 2020 - Watermelon - This was a fun one! We try to use local fruits as often as we can, and hoped to do so for our watermelon cider. I found out that Hackman Family Farm was doing their first watermelon harvest on July 27th, 4 days before the cider would be released. I drove down to Seymour, IN in the morning, and arrived when the first truck of watermelons was being brought in on a tractor. They were hot from the sun. I could tell that everyone at the farm was excited to get the watermelon season started, as one of the workers ran a watermelon over to a table and the Hackmans cut it open, chopped it up, and handed it around for everyone to taste. It was SO GOOD. I’ve never had a warm watermelon before, but it was still so refreshing! Truly the best watermelon I’ve ever had.

They loaded up my car with 37 watermelons and I headed back up to Indy. I didn’t realize how heavy my car was, and at the very first stop on the way home, a rogue watermelon came flying into the front and smashed my hand a bit. I drove a lot more carefully after that!

I got back to the cidery around 1, and the production team quickly unloaded my car, started chopping up the watermelons, and running them through the juicer. The fresh watermelon juice was added to the cider that night. From field to cider in 12 hours!! You can really taste the freshness in this cider - I think it may be my favorite one.

December 2020 - Cranberry Rum - We didn’t realize until after we’d announced our that our gift box would be released on Black Friday that it meant we had to have Cranberry Rum finished in enough time to can it, Pasteurize it, sticker it, and put it in the box several days before the official release date. Luckily, our production team was able to switch some things around and make it happen for us, so Cranberry Rum is the first Cider of the Month that was done DAYS EARLY. It made the release in the tasting room really smooth, which was great because this one had a lot of traction on social media. Thank goodness we didn’t have a repeat of Margarita!

I hope you enjoyed some of these stories as much as I enjoyed telling them! Part of what makes supporting a small business worth it are stories like these - you get to know the people that make the cider, the team in the tasting room, and the customers you see every week. We hope that 2021 brings more in-person gatherings and shared stories, but for 2020, this is about the best we can do. We hope you get one of these gift boxes and create some stories of your own too. Merry Christmas and Happy Holidays!

Business in the Time of COVID - Part 2

It’s hard to believe that five months have passed since our last blog about what it was like as a business owner in the early days of COVID-19. A lot has changed, but, sadly, a lot has remained the same. We’re still fighting the pandemic as a country, with higher rates of infection than there were in April. We still don’t have any sense of how the future will play out. Government support (for both small businesses and individuals) has ended in spite of still not being able to fully function.

I wouldn’t choose to go back to April of 2020 again, ever, but at least it felt like everyone was working together and doing their part to work their way out of a really tough situation. Now it feels like the hard work and sacrifices we all made didn’t really achieve anything, and the only way to navigate our business forward is to pretend things are back to normal and hope our customers will do the same.

Most every small business owner I work with in Indianapolis (which is a small sample of mostly brewery, restaurant, and other hospitality-minded folks) feels the conflict of trying to capitalize on local support, pent-up demand, and extended patios for the time being while looking a couple months into the future and seeing the dreaded winter months barreling toward us. January and February are bleak, not just because of cold weather, but because folks are dieting, giving up alcohol and spending less after over-indulging during the holidays. Most bars, restaurants, and breweries rely on busy summer and fall months to create a cash cushion to sustain losses in January and February. Part of what made the timing of COVID so bad is that we’d just all just gotten through the tough months and were low on cash and then had to shut down for the months that usually help us build back our reserves. Now, we’ve mostly made it through the best parts of our year with limitations on dining and operations, and are headed back into the bleak winter days.

Who wants an ice cold cider?

Without big changes and improvements, we’re in for many more permanent closures in the coming months. I don’t want to end this by saying, ‘So support your local small businesses if you don’t want them to go under!’ because I feel like the government should be stepping in with either a solid plan to get us out of this mess quickly OR with support for families and small businesses (ideally both) and they’re doing neither, but…if you have the means and you care about your neighborhood businesses, they will need help.

Once again I’ve written a blog very different than the one I planned on writing! It’s a much more macro versus micro view, so I’ll get off my soapbox and share some information about how we, specifically, are doing as a business and some of the interesting things we’ve had to manage over the last 5 months.

1. Our team is mostly back and we’re all healthy. First and foremost, we’ve been able to hire most every full-time staff member back that we had to furlough, as well as the part-time staff who have expressed an interest in coming back. We’ve had to navigate how to handle employees with fevers or coughs, but for the 15-20 COVID tests taken among our staff over the last several months, no one has tested positive. We’re very grateful for a staff full of people who have taken our COVID precautions seriously and have been relieved every time someone’s cold turned out to be just that.

2. We were really lucky to receive government funding, but it’s gone now. We were truly lucky in that we received PPP funds as well as an Economic Injury Disaster Loan. We used the PPP to keep our production staff and tasting room part-time crew paid and to cover a couple months of rent. We used the EIDL funds to cover other operational expenses. Without both, things would have been MUCH more difficult for us, and we are grateful that we received them. I’m not sure how other businesses who received only one or neither of these funds will be able to navigate the next few months.

3. Our loyal customers showed up in droves! We’ve always felt like our customers are some of the best around, but the last few months have proved it. When some segments of our revenue dropped to near zero in March, April and May, (distribution sales), other revenue streams increased greatly, especially carryout package. We sold four times the amount of packaged cider out of our tasting room from March to May than we did in those same months in 2019, and it was all one-by-one as customers came in to stock up their cider stashes. We were able to keep from using too much of our cash cushion because of you guys.

4. Sometimes getting a breather is a good thing. Right before the pandemic, we were anticipating big growth in 2020 (see…DOMINATE). We had paid for 50% of a new fully automatic canning line that would help us quadruple our canned cider output with the goal of expanding into other states regionally and into more grocery stores. We were able to get the canning line delivered to our cidery in early May, and because so many of our revenue streams had ground to a halt, we actually had time to get the canning line up and running smoothly. We moved everything out of the space, treated the floors, installed new plumbing and electrical work and air compressors and CO2 tanks, all in between cider batches, because we had TIME to do it. If we hadn’t had the pandemic, it is truly possible that the canning line would have arrived, we’d have set it up quickly without the right tools because we needed to use it, and we’d still be running it rough-shod today. Having a moment to breathe in the midst of our usually-busy schedule really helped get us into a good place by the time June rolled around. Which is a really good thing because….

5. We’ve had three of our biggest months ever all in a row. I almost feel bad talking about it because I know that this isn’t really the norm, but we’ve had bigger revenues the last three months than we’ve ever had before. Part of it is making up for our worst month ever in May. Part of it is that when every restaurant and bar and liquor store is opening again for the first time in months, they all need your product at the same time. A big part of it is that we were already on a serious growth curve and with a semi-return to normalcy, we’re simply catching up to where it would have been without the pandemic. And I think another part of it is that we’re making some of the best ciders we’ve ever made - our Cider of the Month program has blown up this year with great flavors like Mango Lassi, Margarita (so popular we had to apologize to our customers for how nuts things went, we ran out a few times, and we’re doing a re-release next week!), Strawberry Lemonade, and Watermelon.

So here we are. We’re doing okay. Our team is doing okay. We are optimistic about our growth as a business and what the future holds in the short and long term, but the medium term is still murky. Support your local small businesses, take care of each other, and don’t forget to VOTE in November!

Business in the Time of COVID - Part 1

I’m currently sitting on my couch, crying. I’ve been texting with one of our employees, who we had to furlough shortly after Governor Holcomb’s closure of in-person dining for bars and restaurants in Indiana. A couple weeks ago, I let her and a few other key employees know that we would be able to bring them back because we were approved for the Payment Protection Program. But as time passed, the funds didn’t come, and when they finally did, it was less than we were approved for. Since finding out about the fund reduction, I've been kicking myself for mentioning anything about returning to work in the first place. Why did I make promises to people about their livelihoods before all of the details had been clarified? Why, as a business owner, was I regularly frustrated with my previous self for saying too much, promising too much, being too transparent, when it consistently meant I had to come back and say, “Well, actually, things have changed and that’s not really the case any more.” In one of these hard conversations over the years, I told the person that I have a problem of falling in love with people when I talk to them and I want to give them everything in that moment, and instead of thinking it, I say it out loud. It’s a bad trait for a business owner, and a person. When would I learn? 

I finally worked through the self loathing and started to break the news to each person that we actually wouldn’t be bringing them back as soon as we hoped. We had to keep our production staff working, and that plus staffing our bar for limited carryout hours would exhaust the PPP funds. Without a date for reopening on the table, it felt foolhardy to spend more than absolutely necessary right now. She let me know that she’d just gotten her first unemployment check and that she and her family would be fine. And then she thanked me for all the hard work I was putting into trying to do the best thing for our employees and to make sure we’d be there with a good job and steady pay on the other side of the COVID-19 pandemic. That’s when I started crying. She couldn’t know what a relief that was, to know that she could see I cared, even though I was delivering bad news.

As a business owner, I’ve really struggled with decisions that mean choosing between profits and people. I want everyone to make a truly liveable wage, even in an industry where that isn’t the norm. I want to give people raises who work hard and have been loyal to us. I want our employees to get to do work that is meaningful and exciting, even if it isn’t exactly what they were hired to do. But it’s really hard to do that when your company still isn’t making enough of a profit to upgrade needed equipment, for example. It’s really hard to do that when you yourself haven’t taken a salary in 5 years. The most stressful moments of owning a business can all be tied to moments like this. I want to be seen as a competent leader who knows how to navigate the realities of starting a business and who is caring and generous with our employees, but sometimes it is truly the wrong decision if we want to keep operating. 

The COVID-19 pandemic has really brought these kinds of decisions to the fore, with an added layer of uncertainty about the future that is unprecedented and fully out of our control. When the noise about COVID-19 started to pick up in early March, I felt like I was making life-altering decisions on behalf of our employees every day. In early March, before mandated shutdowns were announced, I read articles chastising people for going out to bars. They blamed the people, yes, but they also blamed the bar owners for not shutting down. I have a Master’s in Public Health and a concentration in Epidemiology. I actually know more than the average person about the spread and mitigation of diseases. From that perspective, the answer was clear. But as a business owner, it was murky. Should we shut down? Should we reduce our hours? Is it fair to ask an employee to deal with the public, even if I wouldn’t be comfortable doing so myself? Is it fair to tell someone we’re prematurely closing and effectively fire them, even though other bars and restaurants in our city are staying open until the bitter end? They have kids, and bills, and they want to keep working. How do I, a measly person who opened a small business a few years ago, have this kind of power over someone else’s life? 

So far, all of our staff understands that the circumstances we’re under aren’t normal; of course we wouldn’t have chosen to have a pandemic just as our business was starting to really take off and make some important strides. They’ve been kind and understanding about how complex and difficult these choices are, and graceful when we’ve had to give them bad news. I wouldn’t wish this situation on others, but the silver lining, at least for me in the present moment, is a renewed gratitude for our team, our customers, and our friends who have been so kind even in the midst of their own stresses. 

This wasn’t really the COVID-19 blog I set out to write, and I hope to do another one that’s a little more objective and business-focused, but this is the blog that came out of me today. Thanks to everyone who has supported us over the last 6 weeks, especially our employees who keep showing up to work and have thanked me for a continuing paycheck, and those who have stayed away and reassured me that they will be happy to return once we are ready. It has been one of the few things keeping me from losing it and I can’t be more grateful, no matter what the future holds.  

What's the Goal for 2020? Dominate.

Back in October, I wrote a blog about some of the big things that happened in 2019 and how they had affected our business. In case you need a refresher, 2019 was a really big year for us. We started canning our own cider (each can filled by hand!), released Fleeting Youth as a permanent seasonal on draft and in cans, and saw massive growth on the distribution side. All of these things combined to make us profitable, a huge milestone for any small business. 

2020 is shaping up to be another really big year for us. My word for the year, when it comes to the business, is DOMINATE. I shared it with our staff at the holiday party, and I’m sharing it here: we are going to DOMINATE in 2020. Here’s how we plan to do that, and we hope you’ll come along with us for the ride!

1. Move our tasting room to The Assembly development on E. Washington Street. Along with moving our physical location, we’ll also be expanding our kitchen and our food menu so we’ll be a full-service restaurant instead of one that focuses mostly on sandwiches, snacks, and salads, as we currently do.

   The new tasting room will have about twice as much space, twice as many seats, and a beautiful, European-style patio. We’re excited to be closer to downtown, even if just by half a mile. We’re excited to have more built-in traffic with the TWG offices sharing the space with us and three stories of apartments above us. While we’ve loved our spot in the Neidhammer building, parking has always been a problem for our customers, and not having a built-in customer base kept us just off the radar for a lot of folks. We can’t wait to put ourselves on the map in a bigger way through this tasting room, and for the challenges and opportunities having a full-service restaurant will bring.

2. Grow our distribution footprint by 50%. Our distribution sales have been really healthy year-over-year. To grow by 1.5x is a pretty serious goal at this point. In fact, we may not be able to do it just within Indiana. While it’s outside of our full control, we hope that you’ll find Ash & Elm Cider products in more grocery stores in Indiana in 2020, and that you may be able to find us in some surrounding states by the end of the year too. In order to do this, though we’ll have to…

3. Increase our production capacity. Again. Even though we got a big new fermentation tank in early 2019 and bought a canning line, we’ve already maxed out our capacity. We recently got three new fermentation tanks up and running and literally just sealed the deal on a new automatic canning line. This means we actually have the physical capacity to make all the cider we want to sell in 2020, and our labor won’t have to increase too much to do that. In other words - increased efficiency! Always a good goal for a business.

4. Open an online store for people who can’t make it to our tasting room! This has been a goal for a while, but I’m putting it in writing - we are going to start selling our cider online in 2020! There are lots of legal hoops we need to jump through, but our goal is to put our special bottled ciders and our Cider of the Month ciders online for folks who want to get a taste of some of our special releases. We’ll start small - just in Indiana - but as we get our bearings, hope to add on additional states. It’s going to be a great way to share some of our really special ciders with our far-away friends!!

5. Do a better job of sharing our story. We’ve been open for almost 4 years now (can’t believe it!!), and in retrospect, there are aspects of the Ash & Elm Cider Co. story that we need to do a better job of sharing. We want people to know what makes our cider different from anyone else’s. We want you to know where we get our apples, how we work with local orchards, and who the people are who make our business run. 

2020 is shaping up to be a banner year. As always, we so appreciate everyone being a part of the ride, and appreciate your patronage, interest, and excitement. Cheers to the new year!

How Canning Changed Our Business - Part II

In the last post, we talked about how there were some unintended consequences of releasing our cider in cans. After a year of canning - exposing more folks to our cider and growing our sales - we realized that we’d been losing money because having our cider available in a package format affected people’s purchasing patterns.

After taking some time to check our work and make sure it was really true, we had to jump into action to stop the bleeding. These are the steps we took to turn things around (and, spoiler alert - we did! Things are going great! Phew!)

1. We bought a canning line ASAP - I mentioned last week that canning lines are super expensive. That’s for the big guys that do the work for you. If you get an old, used, manual canning line, you can find them for a lot cheaper. We found one of those canning lines for $10,000 from Northern Indiana and snapped it up quick. Once we cleaned it up, replaced some parts, and got it running, we made twice as much on each can of cider than we did before (remember, before was a negative number. So…this sounds wildly better than it really is. But, from -$.05 per can to +$.10 per can is a huge swing when you sell a lot of cans!).

   This was the biggest and most important change we made to fix our situation. However, a manual canning line is exactly what it sounds like: a human being stands in one spot and literally fills each can by hand. In one minute, it takes two people to package 8 filled and sealed cans of cider. It takes three people a full day to package 100 cases of cider. For comparison, when we had the mobile canning people helping us, it took three people one hour to package 100 cases.

   Around the time we started using our new canning line, we had a big, organic jump in sales. A great thing! But instead of using that canning line once a week or so to maintain our supply, we use it 2-3x more often. So, while getting it was transformational and 100% the right choice, it is a temporary solution. We need a bigger line already so we can keep pace with our growing sales.

2. We adjusted our pricing structure. Introducing our cider in cans led to several of our accounts switching from our cider on draft to carrying it in cans. In an effort to encourage folks to keep buying draft cider we actually lowered the keg price so it would be the better deal.

   As a quick aside about that point I just made - it wasn’t as simple as just saying, ‘Hey, we’re lowering our prices!’. We had to think really carefully about how to send out that message and what unintended consequences it might have. It might make an account feel like they were getting ripped off the previous few years and leave a bad taste in their mouth. It might make them think we’d secretly switched to lower-quality ingredients. Plus there’s the whole thing about leaving money on the table - if people were willing to spend this before, why accept less? We finally decided honesty was the best policy - we told folks that instead of pricing our cider per ounce regardless of the vessel, we are adjusting our prices to hit a specific profit margin. It seemed to go over well and made them feel like they were getting a great gift (which they were! Cheaper cider!)

3. We Released Draft-Only Options. One of our mistakes on the distribution side was putting everything we offered on draft into cans. In other words, for every possible cider available to a bar or restaurant, they could get it in either kegs or cans. But one thing that we knew and somehow didn’t think about enough is that bars like to rotate their tap handles ALL. THE. TIME. Even if they have a draft line dedicated to cider (not that common), they never want to put the same one on twice. I suppose we thought that having 4 flagships and one seasonal at all times would cover our bases for the rotation issue, but it turns out that bars really love limited edition, specialty kegs that ONLY THEY can get. Which…I don’t blame them. But we didn’t prepare for that. So, looking to 2020, we are going to be continuing our very popular Cider of the Month Club, where we put a new cider out in our tasting room for one month only, and set aside 5-10 kegs for accounts that want the special stuff. We’ve dipped our toe into this already, and have started getting more and more requests for these specialty ciders, so we’re making it an official thing next year. If an account wants a special cider they can get it! But only on draft.

These three changes really worked. We still sell way more cans than draft cider to accounts, but we aren’t losing our draft accounts any more. We’re selling way more cider in cans, and now, instead of losing a bit of money each time, we’re making a decent profit margin each time. We also have a path for how to continue making upgrades to our production equipment that will continually bring the costs down of getting our cider out the door, so our profit margins will continue to go up without increasing the price.

Owning a business has been a really interesting experience, and I’m sure it will continue to be. What seems so obvious at the time (buy the dang canning line!) takes a lot of waffling to get to. And what seems unimaginable (lower prices to make more money!) can be the ticket to profitability. We’re still figuring it out, but this experience was really helpful. It was a chance to do some real-time, high-stakes problem solving, and at least for now, we’ve solved the canning problem. Onto the next!

How Canning Changed Our Business

Almost two years ago, we decided to put our cider into 12 oz cans and release them into the wild. We wrote about why this was a complicated decision and how distributors work. We also talked about the decisions we made leading into the release. We put a lot of thought and effort into the decision. But, even with our over-the-top spreadsheets, calculations, and forecasts, there were still effects on our business that we didn’t anticipate. Here are some of the biggest changes - both expected and unexpected - that came about as a result of canning our cider.

Is it worth risking your business to have cans this beautiful? Maybe.

1. They exposed us to new people and accounts. This is the whole point, right? We put our cider in cans so that we could sell it at liquor stores and restaurants that have limited draft options. We put our cider in cans so that, someday, grocery stores and sporting venues could carry them. And with each new store or venue that becomes an account, a new batch of people see the name Ash & Elm Cider Co. and become aware of our business. And all of this happened! Yay brand-awareness! Yay new fans!

2. Traffic to our tasting room declined. We anticipated this a bit, but it was still a bummer when it happened. Before cans, if someone wanted to drink our cider at home instead of at a bar, they had to come to the tasting room and get a growler fill, which would last them for a couple nights, max. Now, they had a more options: they could come to our tasting room and buy enough cider in cans to last them for a month or two. They could go to the liquor store next to their workplace and never step foot in our tasting room at all. We expected a dip in sales in our tasting room, but we hoped that the greater exposure (see #1) would eventually lead to more people finding out about us and checking out our tasting room. That did happen eventually, and tasting room sales recovered, but for those first six months or so, the difference was hard to miss.

3. It changed our product mix. This one was a biggie, and we should’ve seen it coming. We’ve talked before about profit margins. Our best margins come from draft cider - filling kegs has a much lower labor and equipment cost than canning cider, but the retail price is about the same. If it were up to us, every bar and restaurant would carry our cider on draft (heck, multiple draft lines per bar! CIDER FOR EVERYONE!!).

   One thing we didn’t anticipate is that a lot of our draft cider customers didn’t do what we thought they might - keep carrying our cider on draft and add new styles in cans. Instead, they took all of our cider off of their tap list and replaced them with cans. While we’re definitely happy to be in more bars and have more of our styles represented, we didn’t expect to lose so many draft positions when we offered our cider in cans. In fact, our draft sales have been about level year over year: our draft cider sales were up 18% this year and 23% last year. Cans, on the other hand, are increasing rapidly: our canned cider sales are up 119% compared to last year.

   Similarly, our growler sales (that precious high-profit-margin liquid) are down since we started offering cans to go in our tasting room. We anticipated more sales overall with cans, but we didn’t adjust our draft options down, and we should have.

4. It didn’t make us any money... We used a mobile canning service for the first year that we offered cans. We did this because canning lines are SUPER expensive, and we wanted to test the market first. The trade off, of course, is that we’re paying someone to perform a service for us, which eats into the profit margins. We already knew that using a mobile canner would make our profit margins razor thin, but that was with the assumption that draft sales and tasting room sales would continue to grow at the same pace instead of decreasing in velocity.

   At the end of 2018, we did some number crunching and realized something sobering: we were losing money on every can of cider we sold. OUCH. We were working harder, longer hours, putting stress on ourselves and our production staff, and we had less to show for it! How could our calculations have been so off? Well…see points one through three above. Each account that took off a draft line and added in cans cut into our profit margins. Each customer that bought cans instead of a growler did the same. Multiply that by every bar and every customer for an entire year, and you end up working harder for less money. Not a sustainable business strategy.

   This blog is already creeping up on length, so I’m going to stop it here and will write another blog soon about what we did to stop the bleeding that canning introduced into our business model. Stay tuned!

It's Been a Minute! Here's an Update.

Hey everyone! Wow - time flies when you have a kid and you’re also in your first few years as a business. I apologize for neglecting our blog for the last year and a half and will commit to doing better moving forward!

Since so much time has passed, let’s spend a bit of time catching up with each other. What have we been up to since *checks date of the last blog post* February 2018? Here are some headlines:

1. We released our cider in cans in February 2018 and that….changed everything. I’ll write a blog post dedicated to this in the next couple of weeks. As a summary, though, we started by using a mobile-canner and realized after about a year that we should get our own (tiny, used) canning line. At the moment, every can is filled by hand, which is NOT going to cut it for much longer, so we’re already on the hunt for a bigger canning line.

2. We reached our cider-making capacity and had to get new equipment! First, we bought a new 60 bbl fermenter (on top of the three 40 bbl fermenters we already had). Then, when we maxed our our capacity again, we bought three used 30 bbl fermenters at an auction, which was both exhilarating and anxiety inducing.

The big tank is the 60 bbl fermenter we bought in February, 2019. We just bought three new 30 bbl tanks a couple weeks ago.

3. We decided to move our retail storefront to a bigger spot. Given the size of our current space and the lack of ability to expand, we decided to move our tasting room to a new development about half a mile down the road. We’ll at least double our seating capacity and will also have the ability to increase our food menu. Our target opening date is summer 2020, and you can bet there will be a lot of A-grade blog content coming about this over the next 6 months.

4. We made our most popular seasonal, Fleeting Youth, into a permanent flagship cider, and that has ALSO really affected our business in a big, positive way.

5. We hired a new quality guy, and he’s a real task-master.

Of course, a lot has happened in between these big headlines, but if I shared everything at once, this post would be too long and boring for anyone except my dad. :) So, stay tuned for more frequent blog posts and we’ll get into more of the nitty-gritty soon!

The Time Has Come: We're Releasing our Cider in Cans!

Folks who have been following our blog for a while know that we've been planning to can our cider since the beginning, and that a lot goes into turning that decision into a reality. Well, it's finally happening - we have our cider in cans and we're about to start selling them!

I wanted to take a moment to pull back the curtain on what key things we've done to set ourselves up for canning success (hopefully!).

1. Design, design, design!

As you know, we've talked before about how much good design means to us and our brand. We attribute a lot of our early success to having a logo that is well-designed and a tasting room that's beautiful and conveys that we care about our customers and our products. The same is true with cans - in fact, even more-so, because their reach will be much greater than just the small segment of people who come to the near-Eastside of Indianapolis to our tasting room. 

That being said, we stuck with our trusty designer, Amy McAdams, for our can design. And what a great decision that was -- look at them!

Photo credit: Kelley Jordan Schuyler of Skyler Creative

We're totally in love with how they turned out.

2. Gotta nail that price-point.

We've spent a long time working on what our price point should be for these canned ciders. It can't be too low, or else we wouldn't make enough of a profit for cans to be a sustainable part of our business. But if they're too expensive, we might exclude some potential fans. We decided that we want our price point to be in the 'Q3' price range when compared with other available packaged ciders. What does that mean? 

If you look at the normal distribution image below, we want our ciders to be priced between the '0' and the '+1'. In other words, we're going to be more expensive than a fair amount of packaged ciders out there - we have to be: we're small, we don't use concentrate or added flavors, and we let the cider ferment slowly enough to develop some complexity of character. Our cider is higher quality, and therefore more expensive, than some other brands (Q1 and Q2 pricing). It's also less expensive than a different batch of brands because we don't use heirloom juice for all of our ciders, nor do we age them for months, for example (Q4 pricing).

Nailing the price point is hard and requires more than just math. It helps build your brand and tell your story, too. 

3. Generate some buzz.

If you're launching a new product that you want to be a big part of your company, you need people, a LOT of people, to know about it. We've already got a pretty strong social media following, but to really generate buzz, we decided to send out a press release and have two separate launch parties.

Press releases aren't necessarily the most exciting thing to write, and compiling a good list of industry and local news people takes time and effort. But take that time and effort, get someone with experience to look it over, and send the news out. Hoping that local news will pick up on your product launch from seeing your social media feeds isn't realistic - those guys are busy and you need to give them the words to say, the images to use, and  advanced notice. Here's a great article about how to write a good press release.

Our two launch parties include one invite-only soft launch, geared specifically at retailers, and one for the general public. The retailer product launch is a way for us to get our cider into the hands of the people who we want to sell it. We're inviting them to our tasting room with the assumption that most of them have never been before. We're providing them with free samples, a tour of our space, and time with leadership to ask any questions they might have about our ciders and our company. We'll also having marketing materials on display so they know that we're committed to helping them sell our cider in their stores. If you can get retailers on your side and give them a story to tell their customers, they will be a lot more likely to recommend your product compared to a similar brand.

Finally, the release party for everyone else is just a big, fun day geared at getting folks excited about what we're doing. We're offering discounts on 4-packs and even deeper discounts on cases, along with tours of our production facility and a Q&A with the cidermakers. If I'd been on the ball a bit sooner, I would've also had a new line of merchandise to unveil, but alas, that will have to wait until the summer. Our goal is to get as many people there as possible, especially new customers.

All of this being said, click here to visit the event page for details for our canning release party, and as always, thanks for reading!

Making Our 2018 Scrumpy

Today's blog is from co-founder and head cidermaker, Aaron! Enjoy!

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I've been meaning to write with some more depth on our cidermaking for a long time now, and the day has finally come! This year's small batch Scrumpy gives me a great reason to do so, as there is a lot of time and love behind this special cider.

Similar to last year's version, this year's is a blend of very small batches from the previous year's harvest. We worked again with our friends just up north of Indianapolis at Doud Orchards to get limited pressings of single variety juice, from mostly heirloom apples such as Golden Russet, Rubinette, Northern Spy and Gold Rush. Apples like Golden Russet and Northern Spy have been grown in the US for hundreds of years, and were often used for cider. Gold Rush is more a recent variety, developed at our own Purdue University in 1973. It is also a fantastic eating apple, and one of my personal favorites. Please look for it at your orchard or farmer's market and give it a try.

Once we had this great juice to start with, we let these ferment naturally, without added yeast. This choice, combined with low temperatures in the cellar over the winter, led to a long, slow fermentation. This often results in greater complexity (from the wild, more diverse yeast population), as well as cider with more aromatic and apple varietal character (from the slow, gradual fermentation). It requires constant vigilance, though, as the wild yeast may go awry. This patient, natural yeast fermentation is generally how a classic, English 'scrumpy' would be made in the apple-growing countrysides.

We sampled along the way and kept notes about how each variety looked, smelled and tasted. The diversity was really exciting! Some were tart and citrus-y. Some were rich, wine-like and maybe even a bit smoky. Some smelled of pineapple, or baked apples.

This picture above shows a sampling session from early spring 2017, just after primary fermentation ended. You can see how some have cleared up as the yeast dropped out of suspension, while others are still quite cloudy with yeast or apple particulates.

One last thing we've done to make Scrumpy special is in the blending. Inspired by the 'solera' method used primarily in Spanish Sherry wine, we've taken some of last year's Scrumpy and included it in this year's blend. The solera system is traditionally a method of blending across the years (or vintages) to have a more uniformly aged final product. A pyramid-like stack of barrels is filled at the top with new wine, then a portion taken each year and moved into the next row down. By the bottom row, you have a wine (or cider!) that is a mixture of each of the years above it, as well as a bit of all the years past, as none of the barrels are ever completely emptied. While we don't have a traditional stack of barrels to do this (at least, not yet!), we plan to keep back some of 2018 Scrumpy to blend again in 2019.

A Solera of Sherry wine casks. Image via Wikimedia Commons. https://en.wikipedia.org/wiki/File:ValdiviaJerez52.jpg

The final 2018 Scrumpy blend is made up roughly of 1/3 last year's Scrumpy and 2/3 heirloom small batch fermentations of Gold Rush, Golden Russet, Rubinette and Suncrisp. It is layered in aroma and flavors, with good acidity and an off-dry hint of sweetness. I primarily note very ripe apple, pineapple, and a hint of hay. We hope you enjoy it!

Starting a Barrel-Aging Program

One of the main things we did when we were planning our business was to try as many different ciders as we could get our hands on. From traditional British Scrumpy ciders to more standard sweet ciders to the very esoteric 'brisket' cider someone made (truly), we were willing to try them all.

While we were both familiar with (and big fans of) barrel-aged beers, barrel-aged ciders were a bit harder to warm up to. Because cider is such a delicate drink, and the liquors that are often used to barrel-age products are intense in flavor, we found that a lot of the barrel-aged ciders we tried were either too light on the cider flavor, or we could hardly tell there was a barrel-aged component to them. Aaron summed it up best when he said he either felt like he was drinking a watered down glass of bourbon or a glass of cider that was way more expensive than it should've been.

Always a scientist, and always striving to achieve his all-time-most-desired compliment of 'well-balanced', Aaron set out to make a barrel-aged cider that had a distinct apple flavor while standing up to the more intense flavors that barrel-aging can impart. 

Here are some of the key considerations when barrel-aging a cider.

1) Pick your style carefully. Bourbon is a go-to barrel-aging option, but its strong flavors of oak and vanilla can overpower a delicate cider. Ciders that would stand up better to bourbon barrel-aging would be those that are higher in alcohol content, tannin, or bitter-sharp profiles. In our case, we've bourbon barrel-aged a pumpkin cider that includes baking spices and real pumpkin, so there's additional heft to stand up to the bourbon. On the other hand, rum barrels impart a lighter, fruitier, and brown sugar character to cider, so it can work better with a lighter option. Kingston Storm, a rum barrel-aged cider we released last month, had a standard version and a version infused with pineapple and toasted coconut. The rum notes paired really well with these fruity flavors.

2) Blending can make or break the final product. For Kingston Storm, we got four rum barrels and found there was a huge difference between each of them. The ciders that came out ranged from lightly to very potently rum-infused even though they started out the same. Aaron and Joseph experimented with the blend from these four barrels to come up with a cider that was better than any of the sums of its parts, and made the finished product a much more rounded, nuanced, and complex cider than it would have been straight from the barrel.

3) Add some finishing touches. Despite your best efforts, your barrel-aged cider may be missing that apple-y character you were hoping for, or the oak from the barrel may be imperceptible. It's time to add some finishing touches! Maybe you need to add a bit of fresh apple juice to the blend to up the apple aroma and sweetness. Maybe you get some oak chips and let them steep for another week or two. Perhaps you need to make slight adjustments to the acidity levels. Be willing to tinker a bit to get the product that you envisioned when you began.

4) Consider what your packaging communicates. Last but not least, packaging and pricing is key for barrel-aged ciders. It costs a lot of money to buy quality barrels, get them shipped to your warehouse, and then store them for months while the cider ages. Figure out what your investment has been, and then work backwards to find out the price you need to make per bottle to make it profitable. At that point, consider packaging and marketing your finished product in a way that conveys its value. If you need to make $15 per bottle, convey that with high-end packaging. We decided to sell 750 mL bottles individually, with three embossed labels, for $18 apiece. 

There's a lot more to be said about barrel-aging. Stay tuned, because Aaron is going to go deeper into the technical and logistical components of barrel-aging in our next blog. Cheers!

What We Learned in Our First Year of Business

Some time has passed since the last blog post. Like, five months. We blame it on kicking things into high gear as we launched distribution in Indianapolis and also looked ahead into spring and summer, our busiest season. With all that going on, quite a landmark has passed without much mention: we celebrated one year of business on June 25th, 2017!

Over the last couple of weeks, we've been reflecting on the year that passed (in a whirlwind!). Here are some of the most important things we learned in our first year of business, from the practical to the personal:

Make your tasting room amazing. The tasting room should be the hub of your business. It's where people get to try all of your products on your terms. It increases the likelihood that they'll find something they love, they'll get talk to knowledgeable staff about your products, and they'll experience the ambiance you've spent so much time creating. If a customer tries a cider at a bar and doesn't like it, she'll probably be willing to try a different one later on down the line. But if a customer comes to your tasting room and has a bad experience, you've probably lost her for life. 

Creating a beautiful brand and space is worth the time and money. We've already talked about how we outsourced our logo design and tasting room design to professionals. It was money spent up front, but it was totally worth it. We sell more merchandise because our brand is beautiful. People recognize our logo, even if they haven't had our ciders before. And the number of people who visit and mention that they came in because a friend took a picture of our tasting room and posted it on social media has been SHOCKING. You can't pay for that kind of advertising. Almost every picture looks like this: 

Get the right people on your team. We have really lucked out with having an amazing staff. First and foremost we've tried to make Ash & Elm Cider Co. a great place to work by valuing the individual strengths of each employee, asking for their feedback (and listening to it!), and having fun together.

There were a few months toward the beginning of our business that we realized our pay scale may have been set up differently than it could have been, because we based our employee pay on talking to brewery friends who did predominantly carry-out sales. Our tasting room was closer to a restaurant than a taproom, so our employees were getting a lot of tips, rather than solely their hourly pay. We considered several options to bring them closer to industry standards but after a while we realized, you know what? This is a GREAT problem to have, and providing better pay to employees encourages them to stay with us and work hard. The amount of pride, dedication, and buy-in we have from our team is truly gratifying.

Shockingly, we've added six new team members since this picture was taken!

Recognize when it's time to shift your focus. As a first-time business owner and also the only owner around day-to-day (this is Andrea writing - Aaron still has his day job), my 'job' has changed a LOT over the past year. After we opened, my focus was on figuring out recipes, how to run a kitchen, creating systems to make sure things ran smoothly, and making sure we were staffed every night. I worked in the tasting room about 20-30 hours a week. I was In Charge of Everything. Then I realized that our team knows what they're doing, and me being involved in the day-to-day operations made their jobs less interesting and kept me from doing other important things. So, I've shifted again. Now, I'm trying to grow external sales and distribution. I'm focusing on creating strategic partnerships. I'm looking up from the day-to-day and looking out into the future. I don't actually know what's going on in our tasting room every day. I regularly get asked about events we're hosting that I didn't even know were in the works, and that's the way it should be after a year.

Learn when it's time to stop. I actually only had four items for this list. So, I'll stop here.

Thanks for following along with us on our first year of business, and now that I've shifted my focus away from the daily operations, look forward to more frequent blogs and updates on our website again! Cheers!

What Goes In To Packaging Cider?

A question we hear a lot - both from customers in our tasting room and bars and restaurants now that we're distributing - is when we'll start packaging our cider. At the moment, we only sell our cider on draft to bars and restaurants, which limits the number of accounts we can have. We only sell growlers out of the tasting room, which have a pretty limited shelf life compared to buying a bottle or a can. So we get why a packaged cider is a good move.

As usual with running a business (and with most things in life), a lot more goes into this decision than meets the eye. Here's a breakdown of some of the decisions we have to make if we want to package our cider.

Here are just some of the canned ciders on the market these days. Notice any trends?

The Moving Parts:

1. What format? Cans or bottles? What size? Six packs, four packs, or singles?  Right now, at least in Indianapolis, the 'tallboy' 16 oz. cans are the most common package format for craft breweries, but we normally serve our cider in 12 oz. pours. A unique bottle shape may look sexy on the shelf, but distributors and liquor stores like to have the same footprint so that they can stack cases of different products efficiently. Lots of decisions to make and we've barely even scratched the surface.
2. What equipment? Obviously, in order to can or bottle your cider, you need a canning or bottling line. You can buy a canning line for as little as $80,000 (great deal!), or go the mobile canning route if you're in an area that has one (Indianaplis has a few mobile canning options). If we pursued packaging, we have to consider that, unlike beer, cider needs to be Pasteurized after packaging so you don't get cans or bottles exploding on shelves. We would need to buy, borrow, or build a Pasteurizer, which would take time and money. And with every large equipment upgrade, you also need more hoses, clamps, fittings, valves, and on and on. 
3. What price point? Generally speaking, you want your cider to be priced within a dollar or two of the other products they sit next to on a liquor store shelf. So...where will liquor stores want to position our cider? If they want to place us next to Angry Orchard, we might have trouble, because we can't beat their price. If they want to put us next to a 750 mL bottle of French cider, ours might look like an inferior product if it isn't also in a 750 mL bottle. A higher price conveys a better product, but too high and people will be irritated if the cider isn't worth the extra few dollars, or they'll never pick it up. 
4. What design? You want your package to look good, represent your brand well, stand out in a lineup of dozens of other similar products, be inoffensive yet unique, and convey a lot of important information. Much like creating our logo, this is something we will definitely have to outsource. We can recognize what we like, but we don't know how to make it. So some lucky company will have the joy of translating our constantly-evolving yet highly specific design ideas into something that ticks all of the boxes.
5. What regulations? One of my pet projects is talking about crazy governmental regulations that our business falls under. However we package our cider, there are literally four sets of differing regulations we'd have to adhere to. If it's under 7% and staying in the state, we have to follow FDA food labeling regulations. If it's over 7% and crossing state lines, we have to follow FDA and one subset of TTB regulations. So we have to know what regulations our cider will fall under, and then figure out what they even mean. Here is one of the regulations, put into common English instead of legal-speak:

“Cider or Perry that is made effervescent by carbon dioxide at a level of 0.392 grams per 100mL or more must be labeled as “sparkling” or “carbonated,” depending on the method used to produce effervescence:
1. Sparkling cider/perry: CO 2 results solely from secondary fermentation within a closed container, tank, or bottle. 
2. Carbonated cider/perry: Obtains its effervescence through the use of CO 2 obtained otherwise, for example, by injection.”

So, if you're ever in the tasting room or run in to one of us at an event and say, "Hey, when are you guys going to start canning!", first, the answer is hopefully soon, and second, please forgive us if our eyes glaze over for a few minutes before we respond.

Distribution, Part II

In Part I of our Distribution blog series, we outlined the difference between self-distribution and working with a distributor. In Indiana (and in most states), cideries fall under wine legislation, so we haven't been allowed to sell our cider outside of our tasting room without a distributor.

Okay, so here we are. We have a distributor (Craftroads Beverage)! Things are about to start happening! We both have the same goal: sell a lot of cider to bars and restaurants in town so that people know about us and become fans. Here's how the work breaks down:

The Distributor's Role

The key things we want from a distributor are a commitment to quality, education, and us. Some bigger distributors would have a bigger footprint from the outset, but they'd also have more brands to sell. We were worried that we'd never get much of their focus. We went with Craftroads because they plan to have a relatively small book of business and want to work closely with their brands. We're kind of hands-on people, so this is music to our ears. 

The key job is for them to have a camaraderie with bars and restaurants and build trust with bar managers. Yes, selling our products is important, but knowing which accounts have the kind of customer bases that would buy craft cider and selling to them is more important. Selling our cider to a bar that can't sell it to their customers isn't a good thing. Placing our ciders at 20 good accounts is more important than placing it at 100 bad accounts.

Finally, there are a lot of logistics that the distributor has to manage - they coordinate and deliver multiple brands to multiple places, need to clean restaurant draft lines (surprisingly, this falls on the distributor, not the restaurant), and maintain accurate records. A good sales rep should know every bar manager in town, what time she likes to meet with reps, when she does inventory, places orders, likes deliveries to arrive, what products she normally orders and at what velocity she goes through product. Phew!

Our Role

Our job is to find the delicate balance of making enough cider to sell to our distributor while also having a good stock for our tasting room. We have to anticipate the growth curve so we aren't sitting on a bunch of inventory or running out of product. We also have to make each of our ciders consistent with the last batch, so that customers always get the same thing if they order a Sunset Tart Cherry, regardless of the bar.

We do sales support as well - the more we get out and check on accounts that keep our ciders on tap and visit new accounts we'd like to work with, the better. We can work directly with restaurants to do fun events like tap takeovers or pint nights. We can work with liquor stores to do samplings. All of these things are ways we can make sure a customer tries (and therefore, buys) our products. 

Your Role! 

Last but not least! You have a job as well! If you've been to the tasting room and can't wait to get some Ash & Elm Cider closer to home, start asking at the bars and restaurants you frequent. Ideal accounts are those that are locally/regionally owned, as usually bar managers get to decide what they put on tap. For example, it'd be a hard sell to get our products at Applebees; it'd be much easier to get us as the craft beer bar in Broad Ripple. When you see us on tap somewhere, order a cider! Tell your bartender that you love our ciders and you're so glad they carry us. The more consistently a product sells, the more likely an account is to order it again. 

We're really excited to be able to start this phase of our business. We've been working on getting distribution up and running since before we even opened, and now that we're here, we can't wait to see how our business grows around Indianapolis. 

Distribution, Part I

Folks that come into the cidery usually have a set of questions they progress through when they’re here:

1. How long have you guys been open? (6 months)
2. What did this building used to be? (A pharmacy. A meeting place for the Oddfellows. A strip club).
3. Where else can we get your cider? (Nowhere. Yet…)

That third question always leads to more questions. The answer is – of course – more complicated than it seems. Here’s our attempt to explain the situation, in a two-part blog! Today is Part 1, which outlines the difference between self-distribution and working with a distributor.

First of all, the USA’s alcohol system is a ‘three tier system’, thanks, of course, to laws set up after the disaster that was Prohibition (where most weird alcohol laws come from). For more information about this system and its history, check out this great article over on Serious Eats.

• Tier one is the manufacturer of the product – these are your breweries, wineries, distilleries, and cideries. Us!
• Tier two is a distributor. These are companies that buy product from manufacturers at wholesale prices, and then sell them to retailers. In Indiana, we have Monarch Beverage, Cavalier, Zink, etc. who play this secondary role.
• The third tier is then the retailer. This is where you as customers can come to get a drink. Think bars, restaurants, liquor stores, grocery stores, etc.

Every state has different liquor laws. In Indiana, micro-breweries can cut out the distribution tier up to a point (based on volume). If you’re familiar with Indiana alcohol laws, last year, Sun King Brewing Co. fought to raise the limit so that microbreweries can self-distribute a greater volume of beer before having to work with a distributor. So, microbreweries can self-distribute, and while most of them start with self-distribution, many of them decide to sign on with a distributor well before they hit the self-distribution ceiling in Indiana. There are some great reasons for that:

Why You Would Self-Distribute

Self-distribution sounds like a great deal, especially at the start. You can hop in the car, put a keg or two of your product in the back seat, drive to a bar, say, “Hey, want this?”, and if the answer is yes, you can pick up a check and leave the beer. Bam, you’re on tap at a local restaurant and are already growing the market for your product. You get to collect the retail price for your beer and take it home to the bank. As a startup, that extra profit can help you expand a lot faster than selling at the wholesale rate. Also, in brand new businesses, one or two people could probably handle all the distribution needs.

Bottom Line: Quick way to reach more customers, higher profit margin for the business.

Why You Would Work with a Distributor

Eventually, if things go well, you’ll need quite a team to keep up with the demand for your products. A fleet of vehicles, someone on staff who visits accounts with the sole purpose of cleaning draft lines, sales people to bring in new business and keep current customers happy, and multiple delivery drivers, not to mention someone to handle all of the logistics that come along with so many moving parts. A distributor would handle all of that for you in exchange for a portion of your profits. They will also likely expand your footprint because they have a wider reach and access to more varied accounts because of the multiple different brands they represent.  

Bottom Line: At a certain point, most breweries will end up working with a distributor because the extra reach will make up for the chunk of profits and the staffing needed to support self-distribution.

So, Back to Us…

              We tricked you – none of these laws actually apply to us because we aren’t a micro-brewery! Our legal classification is a Farm Winery, and in Indiana, Farm Wineries aren’t allowed to self-distribute at all. This explains why you can’t find our ciders on tap at bars and restaurants yet.

              Since we opened, we’ve known that we’d need a distributor to grow. We’ve met with many, sussed them out (this is an important partnership, after all), and negotiated contracts. As of TODAY, we have finally signed the all-important paperwork, which means that the time for us to start popping up around the city is near. Like…a few days away!

Next week, we’ll post a blog about what YOU as a cider fan can do to help us grow our business.

Thanks for coming along on this wild ride with us!

Cider: the Official Beverage of Thanksgiving

We've talked before on the blog about the rich history behind cider in the pre-Prohibition era United States. The Cliff's notes version is that the first settlers to the US from Europe brought along cider apple trees with them and quickly planted them across the country. Because water wasn't always safe to drink, the settlers made cider and drank that, both because it's delicious and fermentation kills any bugs.

It's with this history of cider being the US's first beverage that the United States Association of Cider Makers has launched the Pick Cider campaign, which is a movement focused on making cider the official beverage of Thanksgiving - kind of like Champagne is the official beverage of New Year's Eve and beer is the go-to for the 4th of July. 

One reason for the choice is the historical significance. Another is that cider pairs really well with food, particularly the kinds of foods that American's eat on Thanksgiving. 

We're celebrating Thanksgiving and embracing the Pick Cider campaign by releasing a bottled cider that we think would pair well with Thanksgiving dinner. If you come by our tasting room, we have a new seasonal on draft called Fieldstone, which is a semi-sweet, light-bodied farmhouse-style cider with hints of lemon, hay, and fresh apple. We've made a 'Reserve' version of Fieldstone that is slightly drier, oak-aged, and a bit funkier that would be a perfect for your Thanksgiving dinner.

The pre-labeled Fieldstone Reserve.

When you buy a bottle of Fieldstone Reserve, you'll also get a few traditional Thanksgiving recipes that use our ciders as ingredients, like our Sunset Tart Cherry Spiked Cranberry Sauce or Dry Cider Turkey Gravy. 

We're excited to highlight how well cider goes with food, and how it can be used in a variety of recipes to add depth of flavor and subtle sweetness. 

Happy Thanksgiving, and thanks for being a part of the Pick Cider Movement!

Designing A Beautiful Space for Cider-Drinking

Without fail, guests that come into our tasting room mention how beautiful the space is. A lot of that is - of course - based on the awesome brick walls and archways that were already here when we got here. But we did make some (many, actually) design decisions, which we wanted to share with you all.

We have always had a pretty distinct vision for our brand (learn more about those in previous blogs about how we came up with our logo and the sign we had made for the building). We wanted clean, modern lines and decor. We wanted to enter the market with a fully-formed aesthetic instead of kind of fumbling into it after several false starts. That meant spending money at the outset on a graphic designer, marketing materials, and interior designers, but it was well worth it.  

The best decision was working with Heidi Lofton, a good friend and design student, who helped conceptualize and bring into fruition the ideas that we had. We had several meetings to talk through our vision for the space and based off of these conversations, she came up with everything you see in our tasting room today.

We started by picking a floorplan that would allow us to add seating in the future and show off some of Matthew Osborn's great furniture (more on that in a later blog).

Heidi helped us figure out ways to maximize the seating capacity while still making a comfortable space for gatherings.

Then we got to work putting together some ideas for finishings. Given how rustic and dark the interior of the building was, Heidi encouraged us to go with light, clean finishes, both for contrast and to help the natural features of the space stand out. That meant light, natural wood tables (made of ash, of course), extra-large white vertical subway tiles on the bar, so as not to conflict with the pattern of the brick, and a super-light concrete counter top. Heidi found some great seating options on Overstock.com and included them in her next sketches of the space.

Already surpassing my wildest dreams for the tasting room space.

We were all still on board with the vision, so Heidi created a complete rendering of the space, including artwork on the wall (hopefully coming soon!) and a window-bar that we will add sometime in the future. Here's the crazy thing - she had never actually been in the tasting room yet because it was still under major construction and we didn't have a key! If you've been in the tasting room, you'll be able to see how spot-on her renderings are.

Heidi's rendering, having never been into the building.

The final product. Incredible!

Heidi also helped us come up with the idea for the light fixture over the standing bar, saving us literally thousands of dollars by using natural elements and building it ourselves instead of buying a more standard fixture. 

Sparse and natural homemade light fixture. Air plants and large Edison bulbs are an easy way to make something really nice!

Lastly, our friends Jason and Lara who built us the awesome sign for outside of our space had a great surprise for us right before we opened. They had made the sign once, realized the weight of the aluminum was a little too light, and re-made it with a thicker piece of aluminum. They gave us the original piece to do with what we desired. It was a no-brainer that we had to put it up in the tasting room. Add a little bit of flexible rope lighting and voila - an incredible statement piece of art in the back of our space. 

Perfect place for pictures.

So, there you have it - how we came up with such a beautifully designed space! 

The Flow of Culture

We have a guest blogger today - our fantastic Assistant Cidermaker, Joseph Kilbourn. Take it away, Joseph!

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As a citizen of our fine modern city and the world, I regularly think about what defines culture. Culture is often a mix of blending current trends with unique ideas. Beyond society at large, a good share of personal culture is explained through stories and myths. I accepted the job of Assistant Cidermaker at Ash & Elm because of how the company has blended both sides of culture within its business plan and its story. It's summed up in the slogan, "Rooted in Tradition, Crafted for Today" and it shows in our first two limited edition releases, the Oaked Imperial Headlong and Del Camino tepache.

Microbrewers Festival lineup.

The Oaked Imperial Headlong debuts during the VIP hour at the 21st Annual Indiana Microbrewers Festival as an homage to the craft beer scene. I would've never pursued cider making without the influence and culture of craft beer -- where you can always try something new, and you can even try your own hand at homebrewing with loads of support from a community of artisans. And now craft cider has a chance to take off in Indy because of road paved by microbrewers. With nods to some of our brewing heros, like the intensely Citra-hopped 3 Floyds Zombie Dust and fond memories of enjoying a Tequila Barrel-Aged Fistful of Hops from Sun King, we oak-aged and tripled the Citra hops in our dry-hopped house cider, Headlong.

To stand up to the quantity of hops and smooth vanilla notes of french oak, we bumped up the ABV by blending it with an Ice Cider made with fresh cider from Tuttle Orchards in Greenfield, IN. The Ice Cider style was invented in Quebec and uses cryoconcentration to remove some of the water from the apple juice before fermentation. After our careful blending, we arrived at a subtle yet powerful ABV of 9.2% for the Oaked Imperial Headlong, which we offer as a sincere 'thank you' to everyone who has created a culture of craft in Indiana.

At the other end of the cultural spectrum, we created Del Camino based on a drink of culture that my wife, Jennifer Delgadillo and I had while traveling in Oaxaca, Mexico last year. Jennifer and I had just visited a traditional family textile business in the smaller village of Teotitlan del Valle where they loom fabrics from scratch on their goat farm. As we traveled back to Santa Lucia Del Camino, we saw a vendor selling a drink from a barrel by the side of the road and pulled over to try some. It was a homemade traditional tepache with pineapple rinds floating in it and bees swarming around it. My wife's cousin who lived there said that you know it's good when the bees want it. The vendor garnished the rim of our cups with a chili powder, salt and lime mixture and skimmed a few bees out for us. While we rode in the back seat of the car, we enjoyed the tangy fermented pineapple tepache. It was bursting with the flavors of piloncillo (Mexican brown sugar with notes of molasses), tamarind (a tart and sweet plant used in many Mexican candies that are coated with chilli powder and salt), and some hints of other spices.

Authentic Mexican tepache from Oaxaca.

Aaron and I recreated this experience as closely as any Hoosier could with a wild-fermented pineapple cider sweetened with piloncillo and Mexican spices. It came out just as tangy and sweet as the original (bees not included) with an ABV of 3.2% that makes it refreshing to drink on a hot summer's day. Ours also comes with the option to garnish it with a dash of adobo/cayenne chili powder, dried tamarind, lime and salt for an extra kick. I can't wait to see how Jennifer thinks Del Camino compares to the tepache we had from the street when it debuts as a refreshing treat for the patrons of the Microbrewers Festival.

Things get a little crazy around here sometimes...

So as Ash and Elm endeavors to become ingrained in the cultural landscape of Indianapolis, we will continue to convert our own cultural experiences into drinkable form so you can taste the ancient, growing, and fresh culture that flows through us.

Stay tuned for information about a special release of both the Del Camino and Oaked Imperial Headlong in our tasting room in the coming weeks.