Potential Supply and Demand for Apple and Cherry-Apple Hard Cider Markets in Michigan, and Constraints to Market Development

Denise Y. Mainville and H. Christopher Peterson

No 11642, Staff Paper Series from Michigan State University, Department of Agricultural, Food, and Resource Economics

Abstract: The current research explores the potential to develop a cherry-apple hard cider market as a potential means to increase demand for and the value of Michigan fruit grower's product. Factors affecting both the development of hard cider markets in Michigan and cherry-apple hard cider were explored. Research results show that the potential value of Michigan hard cider market is relatively small but significant, estimated at ranging between $580,000 and $2,900,000 per year. Microbrews would be primary actors to promote HC market. They are willing and able to dabble in it, promote it. But they are constrained by need for license and this impedes participation of many who would be otherwise interested. Some microbrews uninterested in state-wide push because they feel it will focus on sweet product that they are uninterested in producing. This position is reflective of a seeming contraction inherent in current enthusiasm over the potential of the market, as figures recent market growth is largely fueled by the current trendiness of "malternatives" as a beverage category, while the maintenance of the market, and the interests of some microbrewers and other purveyors is primarily derived from the traditional image of hard cider, with "traditional" vs. "trendy" hard cider products reflecting significant taste differences. Hard cider is also potentially an important product for wineries. There is a high sales potential for a Michigan-brewed hard cider product, however producing a hard cider that is produced exclusively from Michigan-grown fruit could be more difficult due to supply limitations, logistical constraints, and cost. Constraints to growth of hard cider industry include licensing requirements, taxation issues, primary ingredient sourcing and transport, and fluctuating prices, particularly for cherry juice. The research showed high potential for hard cider that blends cherries (and many other fruits) with apple, however such a product would be rotated with current hard cider, not added as a new product in most cases. Its demand increasing potential still exists, however, even if offered as a substitute to hard cider, due to its novelty and variety.

Keywords: Demand; and; Price; Analysis (search for similar items in EconPapers)
Pages: 13
Date: 2005
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Persistent link: https://EconPapers.repec.org/RePEc:ags:midasp:11642

DOI: 10.22004/ag.econ.11642

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