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RC: To start could you please say and spell your name?
JC: John Clowney, J-O-H-N C-L-O-W-N-E-Y.
RC: Okay, and today is ... That's not correct.
JC: February 10th.
RC: Today is February 10th, 2020, and we are at Bull City Ciderworks in
Lexington, North Carolina. I'm Richard Cox talking today with CEO John Clowney as part of the Well Crafted NC project.RC: To start, could you please tell us a little bit about yourself?
JC: Yeah, so I actually grew up just south of Winston-Salem, North Carolina and
then went to Wake Forest University. My degrees there are actually in nothing to do with cider making or science. They're in analytical finance. Then I got my master's in accountancy and CPA. Right after school moved to New York City, worked in Wall Street for a couple of years and then moved to Philadelphia and worked for a private equity real estate firm. Ultimately ended up in Raleigh, 00:01:00and then we started this cidery when I was living in Raleigh.RC: So it's business related.
JC: It is business related. While my degree doesn't really focus on anything
that's the nuts and bolts of cider making or brewing or anything like that, there is absolutely first and foremost whether it's a brewery or cidery, winery, business is really what you're doing. So there is a lot of relevance to my degree, even if it's not in making the actual product.RC: Sure. So how did you first become interested in the cider industry when you
hit Raleigh?JC: Yeah, exactly. My wife at the time had got me a home brew kit, so I started
making some home brew beer. It was very terrible beer, but like most the people that start in that industry it's like your buddies come over and they're like, "Hey, it's not that bad," and you're like, "It's not that good, either. It's drinkable." The good part about home brewing is nothing that you brew has pathogen in it, so it's not really going to kill you. Doesn't mean it's pleasurable to drink.JC: So, started making some beer. Did a couple of batches of that. It wasn't
00:02:00very good. Reconnected with one of my buddies that I grew up with in high school. He had just moved back to the Chapel Hill area to start a PhD program, and so when he did that we kind of reconnected. He had been home brewing, made much better beer, and then we started making some cider together.JC: I had done some research on the industry after doing a little bit of home
brewing and doing beer and things like that. Micro distillation, microbrews were still burgeoning at the time, as they still are. But we had never really done any distillation, and there was so much beer competition already at that point. I think when we looked in the market at that time ... Rewind, this is 2012, 2013 time frame. There were already 2500 breweries in the country. We obviously had a load of them in North Carolina at that time as well. So obviously going back to the business degree side of it, it's like, "Wow, there's really a lot of competition in the microbeer space, microbrewery space. I'm not sure if that's really what we should focus on." Distillation, a lot of regulation to it, and 00:03:00also not something we had done in the past.JC: Then I started reading about the cider market, and at that time the cidery
market overall was growing both in dollar volumes and gallons produced and everything else, doubling every year. Really people had stopped making cider for the most part I guess over the last 50, 60 years prior to when Angry Orchard really came on the market. Really post Prohibition, a lot of orchards had been cut down and people just weren't making cider anymore. It kind of fell out of favor despite the fact that if you rewind 200 plus years ago, it really was the colonial beverage of choice.JC: As people first settled in America, they had issues with grain propagation
and other things that were necessary for beer. We had a much more agrarian society at that time. People living on farms that were pretty much self-sustaining for their own lifestyle. So they might have apple trees or an orchard. So, in colonial America, cider was being consumed at a rate of about 31 gallons per person per year, and that was every man, woman, and child. 00:04:00JC: Once you had the Industrial Revolution, you had immigration from Germany
also Ireland, British Isles areas. These people were certainly going to figure out how to have beer. So, that was one thing that led to that immigration. Certainly they were going to figure out beer. Industrial Revolution, people moving from farms, moving into cities certainly hurt the cider market and industry. And then ultimately once you had Prohibition and a lot of the orchards were cut down during that time frame, that pretty much killed the industry.JC: Probably most people's experience with cider has been limited to if it was
20 years ago, Woodchuck or something like that or Hornsby's that maybe they would have had when they were in high school or college or whatever. But the cider market, really that was kind of about it. It just floundered for quite some time.JC: Angry Orchards, obviously biggest player in the cider market. It's owned by
Boston Beer Companies, so Sam Adams. They launched Angry Orchard brand I believe 00:05:00in 2011, 2012 time frame, and that really changed the market. It was the first big player major beer manufacturer that was going in and saying, "Look, there's an opportunity in the cider market. Let's really take a focus on it and create a brand." So for better or worse, it created a lot of the awareness of the market, and I say for better or worse because I think it's a double edged sword. A lot of people's only exposure to cider may have been something like Angry Orchard or Woodchuck, and so that's their perception of all that the market is. It would be the equivalent in the craft beer scene as someone's only experience and expectation of what beer is is only Budweiser or Miller Lite.JC: So I'd say that's something that's, like I said, a double edged sword. One,
they were investing in the cider industry, but at the same time it was creating a product that's very different from not only our cider, but a lot of the craft cideries across the country. So anyway, did a lot of reading on the cider market 00:06:00with that happening. Kind of the growth to it is like, "Look, this might be something that we could really get into and carve out a niche for ourselves, at least in North Carolina, if not in the southeast region." So we made some batches of cider.JC: First batches of cider much like the first batches of beer someone home
brews. Terrible. With cider, we're not going through the boil. You're not creating a mash like you are with beer or something like that, but what was happening in our first couple of batches of bad cider quote unquote was the fact that there was a lot of wild yeast and bacteria that were coming into those batches of liquid.JC: When you get fresh apples, they've got a lot of yeast, lot of bacteria on
the skins of the apples, and we were literally just pressing them and pitching yeast in and fermenting. Problem is if you don't retard the growth of those bacteria colonies and wild yeast to a degree that your yeast that you're trying to pitch takes, you're going to end up with whatever bacteria and wild yeast as is on that fruit. So you might end up with lactobacillus or something else. Again, no pathogens. You're going to be able to drink it, but it's going to 00:07:00taste like you're drinking a shrub or drinking vinegar or something like that. So, not something that you can replicate on a regular basis and sell to people who are expecting something that tastes like apples, not apple cider vinegar.RC: What took you from home brewing to deciding to open Bull City?
JC: Honestly, as soon as we made our first batch of good cider in the backyard I
was like, "Hey, let's go. Let's go find space and let's go take it commercial and carve out, because nobody's really doing cider like we want to do it." A lot of it is much sweeter, uses different yeast strains, a lot of added sugar or apple juice post fermentation, which we don't do. So I said we've got a unique product, we've got a unique space, and a market that's really growing quickly. There's a lot of first mover advantage and opportunity for us to get this started right now. So at that time we started looking for space.RC: And you all started in Durham.
JC: We did. We started in Durham. In fact, our actual organization is under
Cider Bros LLC, but it's doing business as Bull City Ciderworks. Originally we 00:08:00were going to be Cider Bros or Cider Brothers, and luckily we got a cease and desist letter from a group out in California that owns a bunch of wineries, and the gentleman and his brother were going to start Cider Brothers themselves under their own cider brand. Like I said, their family owned several vineyards and wineries and stuff. So anyway, I had talked to him, and then he was like, "This sounds like we can work together. You're doing the West Coast. We're out East. There's really not a lot of overlap. If there ever would be, we could figure it out."JC: So, that's how we left the phone conversation. About two weeks later we got
a cease and desist letter from an attorney out of San Francisco. So we immediately were like, "Hey, we probably need to change the name. We're not going to be Cider Brothers. We need to look at doing something different." Obviously starting in Durham, which is the Bull City. We kind of landed on that, which I think is a much better place for us. I think it's a much better name. It's much more inclusive and really represents where we started and I'd say all 00:09:00the support and growth that's happened in Durham we were both part of and represent and support.RC: Great. How would you describe Bull City to someone who's unaware of the cidery?
JC: That is unaware of the cidery?
RC: Yeah.
JC: A great way to start explaining cider to someone, it's kind of like a
brewery, but we don't brew beer. We make cider. That's kind of the first step with leading to someone about what is the product itself, which actually brings up a lot of the biggest problems that we actually face as an industry, right, is consumer education. People just don't know what cider is. They've either never had it or they've only had something like we were talking about. The mass produced Johnny Appleseed, Angry Orchards, Smith & Forge, stuff like that, which isn't really representative of a lot of cider that's being produced on the market.JC: The first part is letting them understand it's beverage produced from
apples. Our setup if you come to the place, it's kind of like a microbrewery, but we're making hard cider, not beer. We do sell beer in both of our taprooms 00:10:00as an additional offering for people who aren't interested in cider and can't find one that they really enjoy. But we really focus on and cultivate the cider culture and what it is that we represent as an industry as well as an individual company. So, that's kind of the first leading part of it.JC: Then we've done, at this point, thousands of events and samplings since
2014, and the biggest thing and the best way to educate any consumer is really letting them taste the product. So the more lips that you can touch, then the better chance you have of showing someone here's what we really do from the standpoint of the product itself. Like I said, we've done probably a few thousand samplings and events at this point, and that's the most important part and kind of telling them like, "Oh ..." Typically the feedback is, "I don't really like cider," or they've either never had cider or they don't like cider, because they've only had macro-produced, high sugar content cider. So we always just tell them try it out. If you don't like it, you can spit it out, you can throw it away. You're really not going to offend us. There's plenty of beer made 00:11:00on the market for people that enjoy beer, and we're doing something different.RC: Even though you started in Durham, we're now sitting here in Lexington.
JC: We are.
RC: How did that happen?
JC: Yeah, exactly. Our original location was the old Carpenter Motor Co. site,
which dated back to the 20s in Durham, and our specific site, the building was built in 1947 and they actually did heavy truck maintenance in that. So it was literally just a four bay roll-up garage.JC: We started building out that space in March of 2014. Early 2015, the city
decided they were going to purchase that property from the Carpenter family. That had been in their family since the late 1800s, but the city was going to buy that entire block for the new police headquarters for the city of Durham. So if you actually go back to where we were originally located, now it's the parking garage for the police department of the city of Durham.JC: So we started looking for space in late summer, early fall of that year of
00:12:002015, and we were pretty close to negotiating a deal over in the Golden Belt area where Hi-Wire has their Durham location now. We had actually looked at that general building and that set of buildings to go there and ultimately hit some roadblocks with the landlord at the time in terms of parking and our use of the space and the fact that it would have fermentation happening in the space and things like that, which does produce odor. I find it to be a pleasant odor, but it is still an odor nonetheless. So if the landlord is not carving that out as part of lease term, then you can't really go there if that's part of your business.JC: We really kind of came to an impasse of you're either underwriting our
business and how we need to operate here or you're not. So, that kind of was a stalemate there. Around the same time we had actually worked an event in Lexington, the Barbecue Capital Cook-off. Not the festival, but the cook-off that they did for about nine years. I think it's ceased after this most recent year, but we were doing the barbecue competition. It's a Kansas City barbecue 00:13:00sanctioned qualifying event. So we were just here selling cider, not making barbecue obviously.JC: When I was here, met a couple of people in town. I actually grew up about 20
minutes north of here, north of Lexington. So met a couple of people in town. They were like, "Hey, you guys should totally look at coming back. We've got the old warehouses and furniture factory from Dixie. The city owns all this property now. You should really look at what they have and see if there's any place that can work here for Bull City for production." So ultimately next week after that I came right up. I toured all the facilities, because we had to find a place to go, and ultimately found the building that we're in. It was the very last one that we toured of the day, and I was like, "You know what? This could really work for us."JC: This building was built around 1965 by the furniture company. They actually
really just used it for finished goods storage. Everything was manufactured across the street, then they'd bring it back over here and then just store the boxes of finished furniture before they went on trucks to showrooms and furniture stores and things like that. So when we came in there were no walls, 00:14:00no water. The only electricity, there was about 90 200-watt light bulbs, incandescent light bulbs in the facility, but that was it.RC: Wow.
JC: I would say the first round of work that we did here was probably around
$170,000 of upfit plus or minus just to put water and general production needs that we had. Putting modern electrical boxes and wiring and stuff that we needed to be here, but we ultimately negotiated with the city. Like I said, after we toured the building, liked this space, negotiated a lease with the city, and then started operating here. We got everything upfit and open here March 17th of 2016, and then we actually just acquired the building from the city the end of last year, end of 2019.JC: Now we're getting ready to do a whole other round of renovations to the
building and add some office and some employee lounge space and just some general upgrades for retail and functionality of the space, production and 00:15:00retail sides. So that'll be fun.RC: Yeah, sounds-
JC: Construction projects are always fun, renovation projects. We think we'll be
done in a few months, which means sometime this year we'll finish.RC: Yeah, you'll finish before Christmas.
RC: How would you compare the industry when you started to where it is today?
JC: When we started, in North Carolina there were only a few ciders being made.
Noble Ciderworks up in Asheville. They had started just before us or right around the same time. Bold Rock had started right around the same time, a couple years before, but they were out of Nelson County, Virginia. They've since added the Mills River location up by Sierra Nevada, but they were not there at that time. Then there was St. Paul Crossings Vineyard, McRitchie Winery, and I believe there was maybe one other vineyard that was making a cider as well, but that was pretty much it on the cider side. Except for one smaller family orchard. Fishing Creek was starting up around the exact same time, and that was just kind of family orchard, very small batch. 750 ML bottles. They still 00:16:00produce and distribute on a limited basis I believe, but that was pretty much it.JC: Now you look at the market, we've got Red Clay and Good Road. So you got two
cideries down in Charlotte. Up in Asheville you got Urban Orchard, you got Noble. Noble's at a second location with a restaurant, the Greenhouse. Botanist & Barrel started since then as well. They've got the Hillsborough Taproom, but they've got Orchard Space, I believe, up in Asheville or Henderson County. Ty Lowe, who a lot of the cideries in North Carolina have had cider from at one point or another, he owns an orchard. He's a sixth generation apple farmer. So, that's actually where we got our first apples when we started. He's now contract making a cider through James Creek, which also runs their own family orchard kind of more down toward the Pinehurst area toward the Sands.JC: So, I'd say now we went from basically a couple of us making cider to we're
00:17:00closer to two dozen at this point. Dozen and half, something like that.RC: It sounds like a community, too, the way you were talk-
JC: It is. It's very much a community. It's a great group of people. From that
perspective I'd say there's a lot of similarity or overlap to folks who are in the craft brewing industry where we really do have a lot of great overlap and willingness to work together and face a lot of the same challenges and try to work together to solve problems as opposed to believing that success is a zero-sum game where the only way that we win is if somebody else fails. I think that approach, certainly that kind of camaraderie and brotherhood in craft brewing certainly serve them well in the craft beer industry, and I think the same thing's happening in what we do. Constantly trying to work together and create a better community for our space.RC: You mentioned both beer and wine industries a couple of times. Where do you
all, the cider industry, sort of slide in there as far as legislation, regulation?JC: Yeah, so for legislation and everything else it's interesting. Like we were
00:18:00originally talking about how cider had the decline after Prohibition. Well, after Prohibition they didn't really carve out a category for cider. So it's really just kind of dumped into the unfortified wine category. So, the same as a vineyard or winery at a national level. Federal level we go through the TTB as an unfortified winery. North Carolina also classifies and treats us an unfortified winery. If you get into other states, though, they can really choose the taxation as they see fit for their state. It's a state level decision, not a national decision that blankets everybody. Certainly federal excise tax is, but how it's handled at state level is not.JC: For example, North Caroline unfortified winery, treatment of cideries. If
you look at South Carolina, they've never really made an official determination at this point, so you can either pay the taxes as a brewery, as a malt beverage or an unfortified winery. If they ever release full guidance on that, it'll probably be a winery, but as of right now you certainly have some distributors 00:19:00that choose to pay the taxes as if it's a brewery, because they're cheaper.RC: Cheaper, yeah.
JC: If you into Georgia, Georgia has very high taxes on unfortified wine and
wine generally, but cider's classified as a malt beverage in the state of Georgia. Despite the fact that it is fruit fermentation just like wine, it is taxed as a beer. So, every state is different, and that's a nuance that the breweries face and wineries face wherever you go. Each state's going to have their own little quirks about how they treat things, but for us we've only distributed in North Carolina, South Carolina, and to a limited degree in Georgia. So that's the three that we know of at this point.RC: Fair enough. Can you talk a little bit about some of the challenges you
faced in opening Bull City?JC: Yeah, I would say a lot of the challenge that everybody in this space,
unless you're super independently wealthy or you are very on the leading cusp of everything and brewing or micro wineries or wineries generally, capitalization. We're going to banks and going to investors the same way as anyone else did, but 00:20:00trying to make the case that we still try to make when we're having people taste at events and try to buy product. It's, "What the hell is cider? So wait a minute. You want to get a loan for how much money and you're trying to create a cidery? What's a cidery?" So, a lot of consumer education that we face still on the product side. Today, you still face on the industry side or certainly faced at that time making that case to folks of like, "Hey, here's what it is, and here's how the process and the product works. Here's the size of the industry, what we're trying to do." So capitalization and really getting your business right I'd say is a challenge that we face for sure.JC: Interestingly enough, now that we've been in business ... Legally I formed
the company July 2nd of 2013, and we started operations building out our space in Durham in March of 2014. June 20th of 2014 we sold our first pints commercially. So that being the case, fast forward to 2020, now it's like we go 00:21:00to a bank, and we produce financials and everything else. It's like, "Oh, well we understand this a little bit better. We can talk about giving you some money."JC: It's interesting how success breeds success or ease of access to capital and
resources that you need, which to me I think highlights a lot of problems with how financing works generally for small business, because I think a lot of the times ... I understand the higher risk profile for sure for any start up company and particularly for a start up industry, but at the same time the risk of failure could be mitigated with more support during that time frame. That's when you need the support the most. That's when you need the guidance the most, and luckily for us my partners here, one's a real estate attorney by trade, one's a CPA. Used to audit and works as a financial analyst, and then my background with 00:22:00finance and accounting. The business side comes a little easier to us, I think, than maybe some groups, and that's really helped us, I think, navigate what could really be difficult times when you're trying to understand and capitalize and really grow your business.JC: Again, to me I think it highlights a lot of deficiency in the system
generally. Not just from banks, but also from all the chambers of commerce and everybody else from a bureaucratic sense, whether it's state level, federal level to talk about support of small business, support of small business, and there's so many roadblocks and hurdles in place that could trip up and put a small business out of business that doesn't have to happen if they just had a little more support when they really need it.JC: I think that part's been interesting to me just because of my former life of
how my career worked doing much more corporate level entity, large funds, private equity funds, things like that where you don't run into those kind of challenges. But a lot of small businesses do, and people have fantastic ideas 00:23:00whether it's in this industry or other industries, but they need more support mechanisms, I think. I'd say that's a big need for small business. Not just cideries, but all small business.RC: Great. Talking about resources, which is kind of what you were on when you
got started up, were there any other resources you drew upon to help with opening and growing Bull City as a business?JC: Yeah, for us a big thing has always been being involved with the community.
That's maybe jumping ahead on your-RC: No, it's good.
JC: ... your list of questions there, but for us it's always been a big part
since we opened our doors in how do we partner with other businesses that are in our areas, whether that's Lexington or Durham. How do we partner with non-profits, charities, other organizations that are in the places where we do business? And I think for us it's paid huge dividends that don't have your business as a stand-alone that's not integrated in the economy that's around you and the community that's around you, because if you're not, then I think your 00:24:00chances of success are greatly diminished. I think if you are involved and truly involved ... Involved doesn't mean, "Hey, what can I go do for this business or this charity or something that's going to net me an extra $500 this week?" It's how do you truly get involved and make part of what your community's about and what their missions are ingrained in what you're doing and marketing. I think that's a big difference between what we do and a lot of other places might do.JC: We truly get involved. For example, here in Lexington I'm very involved with
United Way on the executive board locally. Also on the board for DavidsonWorks, which is a division of NCWorks that works on labor and employment in the area. So it is truly getting involved. If you look down in Durham, we're part of DDI, downtown Durham. Robbie, who manages our retail location in Durham, very involved in the arts and the art scene in Durham. So it's really looking for 00:25:00what are the different ways that we can partner and win for our community, not just for ourselves.RC: Great. You actually just mentioned that you're back in Durham. The cider
works, right?JC: Yeah.
RC: So what's happening there.
JC: Yeah, absolutely. Our Durham location, we were shut down in Durham when the
city ultimately bought the property from the Carpenters. We were supposed to be out of it by end of 2015, December 31st. Got a couple of extensions. So we ended up vacating the original premises end of April of 2016. We were already supposed to be in our new location in Durham, which is right by the Durham Bulls Ballpark and American Tobacco Campus. It's at the corner of Dillard and Roxboro Street. So, we had signed a lease for that in 2015 in September or October. So timeline was we were supposed to be in that space by February of 2016. We were actually not open in that new space in Durham, our new space, we've been there three years now, until 2017. March of 2017. 00:26:00JC: I would say rewinding to what were some challenges that we faced, that was
one of the most significant challenges we ever faced, because it basically put us down to only our retail business in Lexington, which is not open as many days of the week. It's also a much smaller community. You're talking about 20,000 people versus around 360,000 people in downtown Durham. So we really missed our retail revenue, which anybody who runs a brewery, cidery, winery, you have to understand the importance of the margin, and not just the margin, but the cash you are bringing in from your retail presence.JC: Being out of Durham for a year could have easily put us out of business, and
it certainly strained us on cash big time going into 2016 not being able to get that back open. Luckily we had good distribution partners. We did distribution, but distribution, you move a ton of volume, but your marginal distributions 00:27:00great diminish relative to retail sales. Quick economic lesson on that. It's selling a keg to a distributor of our standard cider, our flagship Off Main. We're selling that to a distributor around $110 a keg. To get to an account, a restaurant, or a bar for 185 plus or minus. That same keg, if you're selling it $6 pints in house is going to generate you $720 of cash of revenue. That makes all the different in the world. When you miss those revenue streams, we could have very easily gone out of business there, but we didn't.JC: We figured it out. That's, I think, part of the advantage of the financial
training and networking and access to capital that we had just based on personal credit and everything else. I would say that's an important factor, too, going into any kind of business like this. Make sure you got very strong credit going into it, because you might have to pull on it, and we certainly did. But we got reopened in Durham in 2017, so that's where we do our small batch production. 00:28:00Here in Lexington where we're sitting we run 60 barrel tanks here, so we ferment 180 barrels at a time for those talking in barrels, for all the breweries. For those in gallons, wineries or whatever, it's 5500 gallons at a time that we bring in and ferment, and we turn that in about four days.JC: We make about 100,000 gallons a year of cider. I'd say about 98% of that, 95
to 98% of that's right here in Lexington, and the rest of it's really on pilot batches, smaller batches down in Durham. There we run 210 barrel tanks and a five barrel tank.RC: Okay, great. Do you see Bull City as having a mission or theme or something
that makes it unique?JC: Yeah. If you're looking on our six pack carrier, it says "Different Is
Delicious". That's the hashtag you'll see on a lot of our social media. So what does that mean? I think on the product specifically, different is delicious, we push the boundaries, push the limits on doing new and creative things with the 00:29:00ciders. Some really off the wall ones that we have are Beetnik for example. It's a beet infused cider. We've got one that's had Christmas tree in it spruce tips in it. So I think that's part of from the product perspective different is delicious, kind of pushing the boundaries on what are we really offering, what are the flavor profiles.JC: Also part of that different is delicious, on the product we're using an
English ale yeast as opposed to most cider that's being manufactured or crafted is really using a champagne or a cider yeast or some sort of wine yeast. So I think that's a very big difference of us using an ale yeast, an English ale yeast. We like the flavor profile better. We tried a litany of yeast strains when we were first starting making it in the backyard, and we settled on an English ale yeast, a Nottingham. So, that certainly creates a difference.JC: Then lastly, we arrest the fermentation. We cold crash and stop the
fermentation early. So by doing that we just have residual sugar from the apple that we don't ferment right from the liquid itself, versus most places are going 00:30:00to ferment totally dry, really create an apple wine and then add back either apple juice or sugar or water or something to put sweetness back in the liquid. So, those are part of the product different is delicious.JC: Then I think on the other side it's really that everybody's welcome at our
place. We really feel like if you're at one of the Bull City taprooms, we're inviting you in. We're absolutely an environment that's welcoming of everyone. If you look at our strict demographics, we follow that and look at it for purposes of where we're putting Facebook ads and things like that, but our core demographic certainly still skews. It's not just us, it's on national level.JC: If you look at association cider makers at the national level, statistics
still skew more toward women probably from the ages of early to mid twenties to mid forties. That doesn't mean you don't have men in their sixties and seventies that show up and come into the taproom, because they certainly do. Or men in 00:31:00their twenties that come in, and they love the flavor and the style of the product and what it is. So I would say we see everyone, even though we certainly have an identified demographic of our primary consumer group. But I'd say that's the thing about it is we don't market exclusively to that. We're very open, and we do a lot of different things that are involved with different groups and communities and sectors of the population.RC: Awesome. Great.
RC: So to talk about you for a minute, how would you describe your average week here?
JC: Yeah, that's a great question. Ideally nothing goes terrible. We've really
made a lot of strides over the last year of assembling the right I'd say makeup of our team members, and we have really the right people working in every division of our business. So production, retail Lexington, retail Durham, marketing. Mondays, for example today is a Monday. I'm on the phone most of the 00:32:00day doing administrative. We've really gotten organized over the last 12, 14 months of hammering out administrative days where, "Hey, these are calls where you've got departmental calls going over production, marketing events, what's going on in small batch production, what's going on in large batch production here, what's going out for distribution, what orders are in the cue."JC: So, a lot of Mondays I spend a lot of time just going through what's the
reset for the week, and then by Fridays we have a team call. Everybody's on it. Typically last an hour. Rarely goes over an hour. We truncate it at that, but that really is the chance for everybody to come back together, "What'd you work on all week? What are the successes? What are the failures? What do we have coming up next week?" A lot of that organization has helped a lot in terms of letting people be more independent and self-starting and making sure they're running their departments well.JC: I really pretty much tell people what I do is try to just not screw anything
up. My job is I'd say purely making sure we're providing the right support, 00:33:00whether that's educational, additional training, professional training, or just being a sounding board talking through an event we might want to do, talking through structure of costs of something that we're looking at, talking about mix packs and how we want to price them and things like that.JC: I work with everyone on a regular basis throughout the week, but I really
try to encourage and support all of our team members and approach it from the perspective of nobody here works for me, we all work together. We really do have a great team approach, and it's provided the right platform for us to be very successful, particularly over the last year. We really retooled a lot of what we do. We, end of 2018, bought out a partner and totally retooled our production processes and pretty much most of the company. And by doing that I've really been able to assemble a great team that I can support on a daily basis. 00:34:00JC: It'd be awesome to say, "Hey, here's an average week." The only thing that's
average is I can assure you the calls that are going to happen on Monday. I can assure you the call that's going to happen every Friday at 8:00 AM with everybody on it. What happens in between that-RC: That's the magic.
JC: ... you never know. That's the magic. I don't deliver stuff as much anymore
personally, but I may still be doing delivering. Somebody might be out for a dentist appointment, so I end up helping do bottling and stuff like that. I do a lot of emails, a lot of administrative stuff from that perspective. I think anybody that is ... If you're copied on enough emails, you get a few hundred emails a day probably. So you're staying on top of that and making sure that's directed to the right person or we're responding to it in a timely fashion. It's super important.JC: I spend a ton of time on the computer and a ton of time on the phone, and
then I'd say something we're working on is additional retail locations this year in 2020. With that being the case, I'm doing a lot more time and focus on real 00:35:00estate. Not just renovations here at our Lexington location, but identifying and working on leases for new locations as well. So, a little bit of everything.RC: Yeah, busy. Building on that, what would you say it's like to work in the
craft cider industry today? You already talked about there's a lot more.JC: Yeah, absolutely. I think it's a lot of fun. If you ask anybody who works
here when you come back and do some additional interviews with our people, I think their response would be it's a ton of fun. We try to keep a really fun, light environment around here, but again, with a strict focus on here are the things we have to get accomplished. We do run it as a business, but I think overall it's an interesting time to be in the cider market as well. Certainly had a lot of growth. The growth has plateaued a little bit from the 2012, 2014 time frame, but if you strip out national players, the beer companies, the Angry 00:36:00Orchards and stuff like that, there is still a lot of growth happening in regional cideries. So places like North Carolina, Virginia, anywhere else that really has a culture of cider following. So I think it's very interesting in that standpoint.JC: I think it's also only going to get more exciting. We don't have a dedicated
cider association at the state level, nationally we do with the cider association, Association of Cider Makers of North America. So, national level we certainly have representation and presence, but state level, that's something that we're really going to focus on and try to get energized this year in 2020. I think it's something that collectively as an industry we have had growth over the last several years. We need to create a collective voice so that we get some of the benefits from representation and potential grants and funds that come out of state and federal dollars if we have a common voice, and right now we don't have that.RC: That sounds like that will be an interesting challenge as well.
JC: It will be for sure, but it'll be fun. I think we've been fortunate with,
00:37:00like I said, assembling a lot of the correct team members and the right culture around here for work that it's kind of freed me up maybe for a little more time to focus on saying, "Look, what do we need to do collectively to make this happen and really have a focus on making sure that we are representing ourselves as an industry?"RC: Great, sounds awesome. Would you say that the growth you were just talking
about is probably the largest change that you've seen in the cider scene since you been in the business? Or are you seeing some other areas of interesting change?JC: I think to me that's been the most interesting change. Certainly there's
been some changes on taxation and things like that at the national level, but I think the most exciting thing for sure has been the growth in local and regional. I think building on that is how do we take that to the next level. If you look at cideries in the country, there's about 850, 900 cideries in the 00:38:00country. If you look at breweries, there's closer to 8500 to 9,000 either in process of being permitted or actually operational, but I think that growth has certainly been exciting for us. I think really the next phase is how do we take it to the next level where I don't expect us to be the same size as the brewing market, it's just not I don't think where it would shake out, but how do we collectively experience more growth and kind of get the benefits of those other industries that are parallel to us.RC: Building on that, what would you say are some of the similarities and
differences in the cider and beer industries? Because externally a lot of people see a lot of similarities.JC: Yeah, and I think that's absolutely true. I think in terms of makeup, in
terms of type of people, entrepreneurs ... Entrepreneurs, right? "Hey, I've got a good idea." And a lot of home brewers turned into microbreweries just like our story at the start where we were home brewing and turned into a micro cidery. So 00:39:00I think there is a lot of overlap with that. There's a lot of that. There's enough of that overlap that there's even discussion should we be part of a brewers guild. Even for us, the brewers guild at the state level hasn't accepted cideries as any part of that. It's only breweries, but if you look at the smaller associations, the Triad Brewers Alliance, we're absolutely members of that, and we host things here and talk to all of our counterparts on the brewing side. In the triangle we're part of the association there as well. So there is a lot of overlap. Really the differences, I think, get down to the product level and the product detail. We are doing fruit fermentation versus bringing in malt and grains and hops and making beer.RC: You've already talked a little bit about your community partnerships. What
role would you say Bull City has in some of the changes that have been happening in Lexington?JC: I think we've been a very positive addition to Lexington or at least I hope
00:40:00so. I think if you go talk to people, they would probably agree with that, because we do partner with a lot of different organizations. Not just non-profits, but other businesses, other things that are happening in our community. We offer up our space and what we can bring to the table to any of these organizations. So I think we've been a very positive addition here.JC: Then if you look really at the micro level, we're in what's considered the
Depot District of Lexington, really kind of the industrial core of what would have been here through most of the 20th century with manufacturing of furniture and everything else. So when we came here and started doing work in this building, everything else around us was totally vacant except for the last vestiges of furniture distribution. So not even manufacture, but they still bring in boxes and distribute them out to stores. Difference being that now they come in on containers from Asia, they get broken down from the containers, stored, then repacked, and then shipped out.JC: But since we've been here another gentleman has bought the building across
00:41:00the street from us. They're getting ready to work on that as a cannabis processing facility. It's a fund out of Pennsylvania out of Philadelphia that they're working on that. I'm not sure his timeline on getting that started, but the building was sitting there vacant with no interest before we came here. So we talked to them when they were looking at getting involved. Goose and Monkey Brew House, part of the Triad Brewers Alliance and really good friends of ours, they're roasting coffee and making beer right across the street. Their grand opening is in three weeks or a little bit less. The 29th will be their official opening.JC: So we're excited just to see more people involved and coming into our area.
Like I said, we're kind of the first flag in the ground in this Depot District or industrial area that wasn't left over from the furniture factory in that era. So it's really been neat for us to see there's some other businesses that they're showing energy and life, and they want to get in here and do stuff as well. The amphitheater's opened up since we've been in this district also. We 00:42:00won't call it the Bull City effect, but we hope that certainly just being here has helped validate that, "Hey, you can go in, you can rehab. You can make businesses happen here successfully," and we wish nothing but the best for all the other tenets coming in around us and hope that that continues to build critical mass and interest in our area.RC: How do you see Bull City growing in the future?
JC: So, how's-
RC: Renovation.
JC: ... Bull City growing in the future?
RC: Yeah, yeah.
JC: The big three things we're working in 2020, the building that we're sitting
in right now, we're going to do some serious renovations to the retail and production side of the space here. Expand the retail by about 800 square feet, but really upgrade the entire facility. So expand our bathrooms, put in a lot of windows, storefronts, climate control versus right now when it's 110 around the building, it's 110 in here or more. And when it's 20, it's 20 in here. I think 00:43:00that's going to be super beneficial to our retail customer base here in Lexington in procuring more people in addition to the activity happening around us, just making our space look better.JC: We're super excited about that. That's one level of growth that we have
coming in. The other things that we're looking at is we will be adding a location in the Triad. We're actively looking at spaces in the Greensboro area, and then we are actively looking at spaces in the Triangle to add a location in Raleigh. So I hope by the time we finish 2020 our goal would be to operate a renovated Lexington taproom, a taproom in Greensboro, our Durham location, which is small batch and taproom, and then a taproom in Raleigh.RC: That's exciting.
JC: Yeah, that's our 2020 plan.
RC: Wow!
JC: So it should be a lot of work to do, but it'll change my average week a
little bit I suppose.RC: We can come back.
RC: If you could guess, where would see the cider industry going in the next
five years?JC: I think it's going to continue to see growth. Again, I think, and this just
00:44:00hasn't been the case over the last couple of years, but I think looking forward five years, it's still going to be concentrated in growth of local and regional players. Then I think really that begs the question of what does an ultimate market look like for a cidery or a brewery for that matter. There's so many of these businesses, particularly if you're in the brewing industry, that have popped up in every state. So what's the market that you really carve out for yourself? Is it micro market where it's only where your taproom is, and that's as much as you do and you don't do distribution? Do you distribute within your state? Do you go to surrounding states, neighboring states? I think a lot of that still has to sort itself out in the brewing industry, but certainly in the cider industry as well. What are the parameters and where does someone really grow, and how do they expand?JC: For us, I think we do want to carve out at least some sort of Southeast
presence not just concentrated in North Carolina. So we'll work to do that. Again, we don't face as much competition in every market as a brewery. If we 00:45:00were going to go in and put a small batch retail and production somewhere in South Carolina or Georgia, it doesn't face the same competitive landscape as someone going to do a brewery in one of those markets that ultimately you go down, and you're going to have several dozen breweries-RC: In two blocks.
JC: ... in both mark ... Yeah, exactly. But I think the market will continue to
grow. I think, again like we talked about earlier, really one of the biggest challenges we have as an industry is consumer education, because people have not really had cider.RC: And how you approach them to introduce them to different types of cider even.
JC: Yeah, absolutely. Where it's fruited or it's spiced. Is it dry? Is it
semi-dry? I think a lot of the growth is going to be facilitated and encouraged by gathering a better handle on how do you talk about cider from a national level, which they work that. We try to keep up with our own nomenclature and how to talk about cider, how to educate about cider from a national level. So then I 00:46:00think it's incumbent on the regional and local level to start using that and deploying that.JC: If you rewind 25, 30 years ago, sure people didn't have the same vocabulary
like they have for craft beer where they didn't immediately understand a lager versus a pilsner versus IPA versus the dubbels or imperial stouts or whatever you're going after. We're still very much in infancy as an industry. If we talk about a real turning point of our industry being the growth and kind of introduction of Angry Orchard, that's not even a decade ago. So this is a very young industry. Thankfully we do get the benefit of, "Hey, here's a playbook for a lot of stuff that worked by mirroring and copying some of the best practices out of the brewing industry." But there's still a ton of consumer education that has to happen and industry awareness.RC: To move on to the difficult questions, what would you say is recently your
favorite cider or beer from a cidery or brewery other than Bull City? 00:47:00JC: Cidery or brewery other than our cidery or brewery. Let's think. I still
drink a lot of beer, because there's still a lot of very good beer on the market, and we're still developing lots of good ciders. We've got to find those on the market. The most interesting actually beer I had recently in the last two weeks was a Burial pilsner. It was a very different pilsner, I think, than a lot of the stuff that you really have, those kind of Eastern European hops are almost too much in some of the pilsner, ales, and things like that. So I was very surprised and impressed by the Burial Shadowclock pilsner I believe it's called.JC: Then on the cider side, probably the most recent non Bull City cider I've
had was from James Creek. Like I said, another North Carolina local producer, 00:48:00and we've done some of their barrel-aged product in our Durham taproom. They had one over the summer, and I don't know this one's barrel age, but it had peach in it, and they farmed the peaches. I thought that was an excellent cider.RC: Oh, it sounds great.
JC: It's a very well crafted, very well balanced cider. I like a lot of what
they do. Just a lot of good flavor and development of flavor. And also Botanist & Barrel. I had something from them that was barrel-aged in the last three months. I can't recall the flavor of it, their style of it, but they do a lot of very unique and well crafted ciders as well.RC: Interesting, yeah. What would you say is Bull City's flagship or signature cider?
JC: Signature cider for us is Off Main. Very easy question. 50% of the package
that we send out of here to go to Harris Teeter and Food Lion and Lowes and everybody else, it's Off Main. That's our primary skew that's out there. Also, if you're looking at breweries and places that want to bring a cider in, they may not be interested in trying to go down the category. They're not trying to 00:49:00be cider houses, so they may not want cherry tart and other flavors. They're just looking for, "Hey, I need a solid, gluten free alternative. I want a cider, not just a wine. And I just want apple." So that way when people come in and they don't want the beer at places like Raleigh Brewing because they're celiac or they just don't like beer, they've got a great offering for them that's just traditional Off Main standard cider. So, 50% or so of what we do is still Off Main traditional cider.RC: Do you have a favorite cider from Bull City?
JC: Yeah, so I've got a few favorite ciders. The original version of Pomme Solo
we did, which was nothing but Pink Lady apples, and that would have been in September of 2014, I believe, we did that cider. I thoroughly enjoyed that. That's one of my favorites. We also did a high gravity oak age version of that exact same cider. We took it, kind of beefed up the sugar and everything else. I 00:50:00think it was Pink Lady started out, but we beef it up with sugar pre-fermentation. So it really ended up coming in somewhere around 10 to 12%, but very strong apple flavor that came out of it. We aged it on oak for quite a few months, and that was definitely one of my favorite ciders.JC: Then Compassion Fruit for ones that we do on a more regular basis. It's a
passion fruit cider that we originally came out with as part of a fundraiser with United Way donating a pint from every Compassion Fruit. Just the flavor profile of passion fruit for me is very appealing, so it's one of my favorites as well.RC: Awesome.
JC: More recently though I did get a crowler of the Razzle Dazzle that just came
out last week a week ago, I guess on Friday. That's a raspberry cider. Beautiful color to it, great nose, and just really solid raspberry flavor. It's real raspberries, not raspberry extract or flavoring that gives you kind of weird off flavors.RC: That's it. Just to go back some, because it's interesting because now that
you are using ... I'm assuming you're not able to just use local apples for- 00:51:00JC: Yeah, we don't just use local apples. So, we-
RC: The scale, right?
JC: ... still get ... Yeah, exactly. Scale prevents to some degree what we can
and can't do in terms of local apples. We do still get apples from North Carolina. Like I said, we originally started with Perry Lowe Orchards. So they're in Meruvian Falls. That's where we got, I don't know, our first probably 40,000 gallons of cider came out of there. As we scaled up bigger tanks, we started getting some cider from Mayer Brothers, which is up in New York. They do a lot for Motts and other groups like that. So, huge aggregator of apples, and plus it's a family business since the 1860s.RC: Wow.
JC: They've been around for a long time, but now I'd say most of our cider comes
from Shelby, Michigan. Peterson Farms is out there. They actually aggregate apples. Not just their own, but other apples from the Midwest. They press them and blend them, and so we just get a tanker of cider. Looks just like a dairy tanker or gasoline tanker for perspective of size, and it parks out front. They've already pressed all the apples, they've already flash pasteurized it, 00:52:00and filtered it. So we have very consistent starting product. By having consistent starting product, we get very consistent ending product.JC: That's important when you're bottling, and the farther stuff is getting from
you, the less it's in your possession, and the more you worry about that. Because it's like, "Well, how it's being treated when it leaves the door when it goes 300 miles from here?" So that's been very good for us to have a very consistent starting product coming in from them.JC: We just don't store a lot of apples in controlled atmospheric storage in
North Carolina. We've gotten juice from Henderson's Best, and they do have CA storage. But for the most part, North Carolina doesn't. Despite the fact that we're the seventh largest grower of apples in the country, we just don't do a lot of year around apple storage. Again, we're not trying to harvest everything and produce it one time like a vineyard. We're really trying to produce throughout the entire year consistently with spikes during the summer when we see an influx in business. 00:53:00JC: From that perspective, Peterson's really been a great partner for us to meet
our needs of, "Hey, year around on demand, here's a tanker of cider," and we can ferment it and do what we need to do.RC: Great, awesome. Well, that's all I have. Is there anything you'd like to add?
JC: No, I think the only thing I would add is for those that haven't cider or
have only had a different kind of cider, come down and do a flight. We sell thousands and thousands of flights. Probably ... I don't even know. We must sell around 10,000 flights a year roughly, maybe even a little bit more than that. But it's a great to come down and try a bunch of different ciders that we do make. We typically have I'd say 16 to 18 ciders that we've crafted on tap at any given time as well as selection of beers and from time to time rotating guest ciders as well.JC: So, encourage people to come down, check out, see what we do. Also, if
you're involved in an organization or event or something that's happening in one of our markets, by all means reach out to us. If there's a way we can integrate and help, we're more than happy to hop in and do what we can. 00:54:00RC: Great. Thanks so much for your time.
JC: Yeah, thank you.
RC: I appreciate, John.
JC: Thanks for coming out.
RC: Thank you.