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Apple Swap Ecomonics

The first year (2017) we ran the apple appeal we had no idea if it would work. Would people want to swap apples for cider. Would they make the effort to come out to us? Could we give them a fair deal? We came up with the "bottle for a sack" rate of exchange and it seemed  to work. 
One donor wasn't so sure and got back in touch with, which led to some agonising rethinking. In the end we have come to terms with a slight revision - it is now a "bottle for a big bag". If there is any doubt we tend towards generosity and we always round up.
If you are interested in how we worked out the model, here's a copy of the letter we wrote to our disgruntled apple donor. It all ended well...
 
Thanks for getting touch. I understand your confusion and consternation. 50kgs of fruit into 25l of juice in to 1l of cider may not seem a 'fair' exchange on the surface. 
Here's how we got to the 'bottle for a sack' model. 
Once we have your fruit we mill and press it along with, typically four tons of other fruit this takes a team of two around twelve hours to do. The fruit is then stored in fermentation tanks on our premises and allowed to mature for ten months. Both of these stages cost us money in wages, equipment and space. 
Once the cider is ready it is packaged or bottled. Both are manual processes for us and bottling in particular is a complex activity.  We pay a local lad to wash, fill and cap the bottles before applying labels and boxing up. We also have to pay for the bottles caps and labels, as well as the designs for the labels, and we have to store the final product. 
Once the cider is produced we then need to sell it to pubs, bars, restaurants and off licences. This is a time consuming process even when people are receptive to the idea of a small scale producer. Then when we've sold the cider we have to deliver it, either ourselves or by courier. That all costs us in terms of time and money. 
At the end of all that we've worked out that we generate about £2.40 a litre of cider we sell, across bulk (20l) packs and bottle sales (the bottled product is more valuable but we sell less of it). Out of that needs to come all of the costs described above. This makes the project marginal at best. Certainly Phil and I have not drawn a penny out for all the time we've put in. That's why we are looking at the cider club model. If we can retail our product it becomes much more viable as a business. 
Back to your apples. We love the idea of using waste fruit that would otherwise rot. We love the idea of getting local people and fruit involved with the project, which is why we came up with the apple appeal idea which we launched this autumn. In fact only a portion of our fruit is gathered this way (we hope a larger portion this year). The rest we buy from a two or three local commercial producers. They charge around £120 a ton for the quality of fruit we need. In pure economic terms that makes the market value of the small quantities of fruit we gather from people quite low (50kg is 'worth' about £6). On the other hand the three bottles we gave you retail for around £3 each. On that basis a bottle for a sack (typically around 15-20kg) seemed to us to be fair exchange. 
That's by way of explanation. However we hate the idea that you are feeling frustrated, so if you are free on Friday why don't you pop down to the Cidery? You can see more of the operation and we'll sort you out with some more cider and juice. Your trees are obviously quite productive and we'd love to have more from them if you can spare the fruit. 
Best wishes,
Steve and Phil
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