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.

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 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.  

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!

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! 

From 'Opening' to 'Open'

Guys, we did it! We opened a cidery and it only took us 2.5 years!

Now that we’re open, our focus has changed from fundraising, seeking legal counsel, location hunting, permitting, and general contracting to managing daily operations. These are the things we’re focusing our energy on these days:

1.       Staffing. Up until May of this year, we were a pretty lean operation of me (Andrea) keeping everything moving and Aaron helping out with production and overall business decisions on nights and weekends. In May we hired our first employee, Joseph, as an Assistant Cider Maker. He put in long hours leading up to our opening to make sure we had cider ready, kegs were cleaned of all the little tiny rust spots that settled in from unloading them in the rain and not wiping them off (my bad), and improving the efficiency of the production process. Then we hired Melissa to run our tasting room and kitchen, who helped create our menu, made sure we had everything we needed to run a retail storefront, and taught me about standard serving practices. Finally, we hired Wes to make sure every customer is treated well in the tasting room and to turn visitors into regulars.

My job has changed from creating job descriptions and making hiring decisions to worrying about whether our employees like their jobs, are getting enough hours, and are as excited about the future of Ash & Elm as we are. For the record, I’m pretty sure we lucked out with each of them, but I still spend a lot of time thinking about how to make sure they are all getting out of Ash & Elm what they hoped to when they signed on to this crazy ride.

The whole team! From left to right: Joseph, Wes, Aaron, Andrea, and Melissa

2.       Distribution. A lot of folks have asked when they can get our cider from bars and restaurants. Of course, there’s a short and a long answer. The short: ‘Soon, hopefully!’ The long: The state alcohol permit we need to make and sell cider (a Farm Winery permit, for those interested) doesn’t allow self-distribution. Which means I could have bars and restaurants with checks in hand waiting to put our cider on tap, but legally I can’t sell it to them. Instead, I have to sell the cider to a distributor, who would then sell it to the bar.

Fun fact! Our tasting room is on the ground floor of a three story building, and our Farm Winery permit only covers the first floor. If one of the businesses operating on the top two floors wanted cider, we would have to sell it to a distributor, who would then have to drive 10 miles away to their warehouse, who would then have to load it back up and bring it back to our building to sell to the top floor. Silly laws.

We have had meetings with multiple distributors, and our goal is to have that relationship lined up and going by the end of summer. Hang tight, we’ll get there, and we’ll make sure you all know about it!

3.       Getting the word out. Our tasting room has been open for three weeks now. A lot of my focus is shifting to marketing, sales, and promotions. In the short term, that will happen via events in the tasting room and participation in festivals throughout the city. Longer term, that means pounding the pavement to get bars and restaurants to buy into our product (see #2 on why that hasn’t happened yet). New menu options, seasonal ciders, consistency, and sponsorships/partnerships are always on my mind as avenues to explore as we grow our business.

Our first big event is Ciderside Chats! Head over to the event page by clicking on the photo.

4.       Data Crunching. If you know Aaron and me, you know that we both LOOOOOVVVEEE data and Excel. Fun fact #2! Aaron is an electrical engineer, and I have a Master’s in Public Health with a concentration in epidemiology, so using data to predict the future gets us more excited than it really should. Anyway, now that we actually have tasting room sales and numbers, we can start crunching data. How much on average does a person spend in the tasting room? How many ounces of cider does the average customer drink, and how much does that increase if the customer also orders food? Which ciders are selling the best, and given sales in our first month, can we predict what our annual sales might be? When does it make sense to add another employee?

Truly, it is so nice to be open after such a long time. Transitioning from ‘starting’ to ‘managing’ has been invigorating. Thanks for joining us for the start-up phase of the business, and I hope you continue to enjoy the ride!

What's Happening in the World of Craft Cider

Aaron and I have spent almost three years now living, breathing, thinking, and drinking cider. We’ve been to CiderCON twice and both have Google alerts set up for Hard Cider, along with a growing library of books to use as resources for every part of our business.

There's a growing library of information online, too, by way of blogs, newspapers, and online journals. If you’re new to the world of craft cider and want to learn more about what’s happening out there, here are some great articles that have come out over the last few months:

1.       Everything You Need to Know About Cider (And Why You Should Stop Calling it “Hard”) – This is a great overview about the latest trends in the cider world. Use it to learn why people in the industry don’t like the term ‘hard’ cider, how ciders differ from region to region, and why cider should fall more in line with the wine than the beer category. 

2.       Is Chicago Ripe for A Cider Boom? – This article outlines the growth of cider in Chicago since 2012 and likens it to the craft beer boom that we’ve all gotten familiar with. It addresses some of the barriers to entry for cider-makers, such as the all-too-common ‘cider stigma’ and how craft cideries are adapting their methods in order to enter a market dominated by craft beer. Plus, with Chicago just being a hop, skip, and a jump away, this might be helpful if you’re a cider fan that’s headed up north any time soon.

3.       Raising the Bar on the Cider Trend - A little different than the rest, this article focuses on two cideries in the Chicago region: Virtue Cider and Uncle John’s Cider Mill. Both Greg Hall and Mike Beck make really great ciders that you can find at some specialty liquor stores in Indianapolis. We’re particularly fond of Mike Beck and Uncle John’s Cider Mill because he’s one of our orchard partners that provides us with juice. Once we open, you all may be fans of Uncle John's as well if you like what you get!

4.       Critical Drinking – Are Craft Brewers Cutting Craft Cider to its Core? – This is a really thoughtful and challenging article from the folks at Good Beer Hunting (a great podcast to listen to if you’re into craft beer). The premise is that the trend of craft breweries jumping onto the cider bandwagon is doing harm to the craft cider world, since the craft cider movement is still in its infancy. Since both the market and some producers are ignorant about the history and tradition of cider, ‘bad’ ciders are turning people off of the industry before ‘good’ cider can turn them on. Choice quote: “In many cases, brewers are making all of these compromises at once in the pursuit of profit, or in their ignorance of another person’s craft, and hitting the gas peddle on production hoping they can cash in on another exponential growth trend adjacent to craft beer. In other words, craft brewers are co-opting craft cider the way craft brewers claim macro brewers are co-opting craft beer.” Oof!

Hopefully these articles have been enlightening to both current and future cider nerds. If you want to learn more about cider and the growth of the industry, give us a shout and we’ll connect you with some of our favorite resources. Happy drinking!

Starting a Business = Being a Circus Performer

You know the guy at the circus who somehow manages to spin multiple different plates on his fingers, nose, kneecap, and elbow all at the same time? That might be the best metaphor for small business startups that I can imagine. I’ve realized that, though my previous jobs have been in some ways multi-faceted, the scope of those job descriptions are nowhere near as varied as what we’re dealing with now as we get our business off the ground. Luckily, I spent two years in clown college, so everything is going okay. Here are our current spinning plates (cue Radiohead soundtrack):

The Law – Not a plate you want to drop. Federally speaking, we finally received our Federal Alcohol Permit from the TTB at the beginning of December. That was an awesome day, and I think we celebrated by sending a series of emoji-laden texts back and forth for several hours. Our state Alcohol and Tobacco Commission permit is under review at the moment, and once we receive that, we can actually produce and sell cider legally! As soon as that paper comes back, we start our first large(r)-scale test batch on-site.

The Finances – Closing on loans, securing the last bit of private investor money, making sure our budget is on track, trying to anticipate money-pits in advance…fincances are another set of plates that can’t be dropped. The reality is that there are probably about 20 finance plates going at once, and we already know some will drop, but which ones, and when, and can we maybe catch them before they hit the ground? This keeps me up at night.

The Product – The product keeps Aaron up at night. We have our suppliers, we know what equipment we’re going to use, we have great recipes that we’ve made dozens of times on a small scale, but will it all come together when we’re using new equipment in a new environment? We’ve had great reception when we’ve shared our ciders at events over the last year, but everyone loves free alcohol! Will people actually leave their house, drive to our tasting room or to a bar with dozens of beverage options, choose ours, and pay for it?

The Facility – Some pieces of equipment have a six-month lead time. Others you can go buy at Lowes. The rest fall somewhere in the middle. We don’t need all of our equipment to get started, but will need it eventually, so when should we order it, and in what order? Plus, the building is under construction. What if the tanks we ordered in July ship before the new concrete floor has been poured? Where will we put them? Does it really matter if our cinder-block walls are cleaned and painted? Does it $4,000 matter? Should the ADA bathroom go here or there? What grade of insulation do we need, and what grit of epoxy should we put on the floor? Stainless steel floor drains, right? How do we get a sign on the door? Should we get barstools with backs or without? And where will we put the purse hooks (purse hooks matter a lot to women at bars)?! Honestly I could go on forever with the kinds of minute decisions that need to be made Every. Single. Day. I have a whole new respect for anyone who opens a brick and mortar anything.

The Nameless Plate – “I KNOW I’M FORGETTING SOMETHING HUGE BUT WHAT IS IT?!” – me, almost every minute of every day.

So there’s a bit of insight into our lives at the moment. It sounds fear-laden, but it isn’t. It’s invigorating, with a tiny bit of fear and a pretty large dash of manic energy mixed in. And neither of us could be happier.

PS, I didn’t actually go to clown college.

How do you Finance a Craft Cidery?

Finances are a tricky thing. Talking about money is generally considered poor manners, and asking other people to give you money is straight uncomfortable, but if you want to start a business, you’re going to need some cash. There are a few ways to finance your business, including funding it yourself, bringing in investors, or taking out loans, and there are plusses and minuses to each option. Here’s a brief rundown of our thoughts and experiences with each of them.

Self-Funded - If you fund a business yourself, you have to either be wealthy, or you have to start on a small scale. This is especially true in the brewing/fermenting industry. While it’s possible to start on a shoe-string budget, you’d still need upwards of a couple hundred thousand dollars to be on the safe side. The amount of capital equipment you need to get started is expensive, and for the permitting process to even begin, you have to have a signed lease, meaning fronting at least 6 months of rent before you can make your first sale (unless you have a real estate agent who makes some good negotiations on your behalf). If you can manage to fund your business yourself, your growth can only occur by reinvesting your profits into the business. But one of the down sides of starting small is that you can only sell what you can make, and with small equipment, you probably won’t be able to make enough to grow quickly.

Pros: You own 100% of the business, and it’s a much less risky venture than the other options – in some ways! It might not feel less risky to put your life savings into a business, but at least if things go south, no creditors will come looking for you.

Cons: You’ll only be able to start as big as you can afford, and in this industry, that won’t be very big. Growth will be slow and there’s no room for error.

Investor-Funded – If you can’t finance the whole thing yourself, another option is to bring in investors who get a percentage of ownership of your business for the funds they give you. If you’re well-connected to people with both wealth and an entrepreneurial spirit, raising your funds this way can be relatively quick. If you aren’t, it may take a while to reach your target. Luckily, with the rise of successful craft breweries in Indianapolis, investors around here are familiar with the model and in some cases, are itching to get involved.

Pros: You’ll have more funds to get started, and it takes money to make money. You may also benefit from the networks of business contacts, accounting, legal services, etc. your investors bring to the table. In some cases, they can even act as a board of advisors.

Cons: You own less of your company, and someday when you hit it big, you only get a percentage of your earnings. If you don’t maintain majority ownership you could also run into conflict, or in the worst case, be cut out of the management of your company by the other owners.

Debt-Funded – Getting a loan to start your business is a feasible way to raise money, but in today’s climate, small-business loans are fewer and farther between than they have been in the past. Plus, with debt comes interest and repayment terms. One the plus side, the equipment needed for your business has a great re-sale value, which makes a loan a lot less risky from a bank’s perspective. If things go bad and you have to go out of business, you can sell all of your equipment for close to what you paid for it and may be able to walk away cleanly.

Pros: You don’t give away any equity in your business when you take out a loan, so you still own 100%. Banks can also be good partners for the future of your business, so establishing this relationship will help when you want to fund future expansion or get a line of credit opened.

Cons: Making debt repayments early-on, especially as you’re just getting started, can be a tough pill to swallow if you aren’t meeting your sales projections, and defaulting on a loan is scary business.

So what are we doing? Well…all three of course! We put a chunk of our own savings into the business to get things off the ground at the very beginning. We were able to cover the costs of hiring a graphic designer, a legal team, some expanded equipment for testing our recipes, and a fair amount of research and development (traveling to visit cideries and attend conferences). We have some investors on board who believe in our business and also see an opportunity to get a good return on their investment. Finally, we are working with lenders who think we’ll be a good addition to their portfolio.

We’re about 85% of the way funded now, which is happening at just the right time to take this show on the road.

The business side of small business ownership may not be as fascinating to everyone else as it is to us, but we’ve found it to be a constant and rewarding learning experience. If you enjoy learning about business startups, here are a few of the resources we've found valuable:

•  StartUp Podcast -  This podcast follows the ups and downs of starting a business.
• SCORE - A branch of the Small Business Association pairs retired former business executives with new business owners. Our SCORE mentor has been a huge help to us.
• Indy Chamber - The Indianapolis chapter of the Chamber of Commerce provides business support as well as networking opportunities with other business owners in the city. 

Here’s to getting fully-funded in the near future and to entrepreneurship!

What's the Hold Up?

 Things have been a little quiet around here lately. Every time we talk to friends and family who are interested in our business, they ask us what we’re doing all the time. It’s a good question. Here’s what we’re working on, and what we need to get done before we can open.

Priority Number 1 – Location

We’ve been looking for a location pretty much non-stop since November. It’s hard to find a space that’s perfect. We've fallen in love with locations only to find out they won't work over and over again. Often, we feel like we’re on a never-ending episode of HGTV's “House Hunters”.

<Insert narrator’s voice>

“Aaron and Andrea have been looking for a location for their new cidery. Location #1 is on an accessible road with downtown views, plenty of space, and falls well below their budget, but can they handle a building that’s needs so much work? Location #2 offers room to expand in a convenient location in an up-and-coming neighborhood. But the lack of a private entrance and signage opportunities could cost them. Location #3 has everything they’re looking for – rustic character, functional space, and a busy street, but it’s a short-sale. Are they willing to risk their business future by letting the other locations go in their pursuit of this risky venture? Stay tuned to find out!”

<Fade to black>

It would be funnier if it weren’t so accurate.

So anyway, the location is a big issue. We think we’re close to having our location figured out and a lease signed, but until the paperwork has been finalized, we can’t move forward in any of the other areas.

Priority Number 2 – Permitting

Once we have a lease signed, we’ll be allowed to apply for our Federal Tobacco and Trade Bureau (TTB) permit. The application is comprehensive, and once it’s been submitted, it takes roughly 110 days (that’s 3.5 months!) to get our permit granted. Only after we have the TTB permit can we file for our state alcohol permit, and then after we’ve received that, we can apply for our city permit. All in all, the permitting process will take about 6 months if things go smoothly, and remember, we can’t start that process until the lease is signed.

Priority Number 3 – Build Out

Another item dependent on the lease. Once we have a lease and have our permit applications going through the Federal rigmarole, it’ll be time to start building out the space. Some of it will be un-sexy build-out, like getting the HVAC systems up and running, the plumbing and electrical requirements covered, etc. After that, the fun stuff will start and the cidery will really start to take shape. It’s hard to estimate how long this will take because we don’t have access to the building yet to see just what all needs to get done, but it will take at least several months to go from beginning construction to being able to open our doors to customers.

In the Meantime…

So a lot of the above issues are outside of our control. But, we’re still making gobs of cider and would love to share it with anyone who is interested! If you have an event coming up or if you’d like to throw a cider party at your house or business, send us an email and we can talk! So far we’ve provided cider to a nonprofit fundraiser, a wedding, and a medical office grand opening gala.

We also continue to make connections and contacts with people in the industry in Indianapolis so that we’ll be able to hit the ground running when we open.

So if you’re anxiously awaiting updates on our progress, please know that we’re awaiting those updates right along there with you, and probably more anxiously. :) 

Thanks for hanging in there with us and we’ll see you soon!

What We Can't Do - Graphic Design

So far, the start-up phase of a business has really boiled down to making a lot of decisions.  Those decision can be summed up pretty simply: Do it ourselves and how? versus Have someone else do it and whom?  

Aaron and I both consider ourselves capable, and love saving money where we can, so we tend to try to do a lot ourselves. But from the beginning, there have been a few key areas that we’ve wanted to get right the first time. For example: forming an LLC? Lawyers can do that faster and better than we can. On the flip side, consultants offered to do market research or help us come up with a budget. Nah, we can do that. Research and math are our strong suits.

One thing we can’t do is graphic design. We have a lot of opinions about graphic design, and had a strong vision about the look and feel that we wanted, all of which drove us toward finding a designer who could bring it to life. Enter Amy McAdams, an AWESOME freelance graphic designer in Indy who had created logos and artwork for multiple local businesses. We knew we had our design partner.

When we changed our name to Ash & Elm (see previous blog about this), we were at a loss of what direction to go. Amy came up with a solid idea to have typeface only, and we loved the idea of laying it over a cross-section of a tree. Amy was in, and took it a step further, suggesting we find an actual piece of a tree and make a print instead of trying to create everything through technology.

This was our typeface logo which we used as a jumping off point. I called a tree-service company that had tree cuttings at their disposal and picked up a few cross-sections (also known as tree cookies!). Though I’d requested a piece of an Ash or Elm tree, they only had Cottonwood available (sad face).

Next, I went to a friends’ wood shop and sanded these bad boys down. I had a near death experience when my scarf got eaten by the sander while I was still wearing it, so this may have been something I should’ve had someone else do. I also took a blowtorch to the sanded cookie to make the rings really stand out (Google suggested this).

Then, Amy came over, we had coffee, rolled ink onto the cleaned cookies, and made multiple ink pressings. It took a while to find the ideal method (paper on top of inked cookie, rub with fingers over and over again, use just the right amount of ink, and carefully remove).

We took our best pressing and then Amy worked her magic by digitally scanning it in, correcting a few issues, and overlaying our typeface.

We love the finished product, and are so glad we called upon an expert in this case! Hopefully this logo and brand will become synonymous with great, hand-crafted, ciders put out by a company that is active and engaged in their community. 

Deciding to Start a Cidery

A lot of people ask us why we decided to start a business focused on cider. It’s off the beaten path just enough to assume there’s a reason other than, ‘We like it.’ To be honest, it’s true. Here’s how we came to the idea of starting Indianapolis’ first dedicated hard-cider company.

Like a lot of other cider-makers around the States, Aaron found his way to cider via the craft beer world. He went to grad school in the mid-2000s near San Francisco. While the craft beer boom hadn’t really hit in Indianapolis at that time, it was big business on the West Coast, and Aaron jumped in full-force, seeking out different beers and starting to homebrew. He moved back to Indianapolis in 2006 with a couple years of brewing under his belt and a desire to open a brewery. But, like a lot of other people, he had student loans and bills to worry about, so it wasn’t an option. A few years later, when craft beer started to pick up steam in Indy, he again had fantasies of opening a brewery, but wasn’t able to convince himself to take the risk.

Around that time,  Aaron and I got together. Aaron realized that, while he loved craft beer, his interest in exploring other beverages had grown. I was game for an adventure, and we brainstormed what skills we each had, what would be a good business idea, and what we were interested in. A few years before, we'd traveled to Ireland and had a cider unlike anything we'd ever had in the States, opening our eyes to the possibilities of different styles. We’d already been making wine, and added cider to the mix too. As we brainstormed about their business ideas in the spring of 2014, cider quickly rose to the top. The growth in the industry over the last couple years around the US was incredible, the skills from brewing beer and making wine transferred well to making cider, and, important to both of us, apple trees grow well in Indiana, meaning not only could we make a truly local product, we could support farmers in our community through the business. And of course, the fact that cider is delicious and we still had so much more to learn about it got us excited about the challenge ahead.

What followed were months of research: drinking as many ciders from around the world we could get their hands on and making batch after batch to perfect our recipes. We took trip to cider hotspots like Portland, Seattle, and Michigan. We visited local orchards to talk with farmers about their perspectives. We conducted market research. Each step along the way, all signs pointed to this being the right business idea at the right time.

It’s been a whirlwind trip already, and we haven’t even opened yet. We hope you’ll join us on the next phase of our journey!

Why Ash & Elm?

As we meet people and tell them about our business, we always get asked why we chose Ash & Elm Cider as our name. It’s a great question, with a bit of a long answer.

Originally, we formed the LLC for the company with a different name. We registered a website, got our email addresses set up, and had our graphic designer start working on our logo and branding guide. Everything was running smoothly.

One morning, I got a text from a friend. It was a picture of a sign of a new brewery opening near her neighborhood that had the exact. same. name. We thought our name was pretty unique, so we were extremely surprised and disappointed. After going back and forth with our lawyers, we came to the sad conclusion that we’d have to change our name and come up with a new one.

For a few weeks, we were hung up on the idea that our new name had to be similar enough to the old one that we’d at least be able to keep our logo and branding, because it was awesome and we’d grown very fond of it. We shot ideas back and forth around the same theme, sent contenders to the lawyers who were helping us verify the ability of the names, and got shot down over and over again. Womp womp – it was going to be time to say goodbye to our beautiful logo and branding.

We rallied, though, and started thinking about names that weren't related to our first one. We listed things that are important to us and our family, and immediately knew that something relating to trees, nature, and the outdoors would be our answer. Aaron’s dad is a botanist in Indiana and could identify nearly any plant or tree that he stumbles across within the whole state. My parents live near to a state park where they spend hours every week, hiking and bird watching. Because of this, both of us are pretty passionate about the outdoors. Ash and elm trees are both species native to Indiana, but because of recent pests, they’re endangered. We love the idea of having a business that isn’t necessarily centered around conservation efforts, but uses its platform to support the businesses and nonprofits that are engaged in that work.

It works in another way, too: cider is a natural product that wouldn’t be possible to make if the earth isn’t cared for– apples grow on trees, in orchards, and they grow well in Indiana and Michigan. We’d love to see them continue to grow, and for more apple trees to be planted.

The link between these ideas and our name makes a lot of sense to us, and we’re excited to see how our love for the outdoors can translate into our business. Cheers!