What the Country's New Cider Act Means for You

Don't say Congress never did anything for you—at least if you're a cider fan, or somebody who's thinking about joining the industry. In December, Congress passed what's known as the CIDER Act, offering several key benefits to producers which, in turn, will surely prove beneficial to folks who simply enjoy drinking the stuff.

For those uninitiated to the world of cider (and wondering, Well, who actually cares?) this is pretty substantial. According to market research firm IRI, cider is the fastest growing segment in the beverage industry. From 2013 to 2014, cider sales grew 75.4 percent and, overall in the past three years, sales have quintupled for the category.

The CIDER Act's Major Amendments

So, what does the CIDER Act do then? Essentially, the legislation updated several tax definitions and codes to make it easier for producers to make high quality cider without excessive tax rates.

"This legislation represents a huge step forward for cider makers throughout the nation," said Mike Beck of Michigan's Uncle John's Cider Mill and President of the United States Association of Cider Makers (USACM) in an official release.

Alcohol Percentage

"The CIDER Act entails three main areas," explains USACM board of directors member David Cordtz, of Sonoma Cider in Northern California. "One is the alcohol level. One of the issues that everybody was having was that, because they didn't really know what to do with cider in the early days, they just stuck it into a sub-category of the wine industry. Sort of like a fruit wine category. Those laws that pertain to that, say, that if it's under 7 percent alcohol, it's all good and it's taxed at a certain level. If it's over 7 percent it's taxed like a wine."

That meant a 0.1 percent change in ABV from 6.9 percent to 7 percent led to a massive tax hike from 22 cents per gallon to $1.22 per gallon. But, that's not just bad for consumer cost, it's bad for quality.

Tim Prendergast of Washington D.C.'s ANXO Cidery.

"People are actually watering down cider to get it below 7 percent to avoid the tax!" says an exasperated Tim Prendergast, beverage director at Washington, D.C.'s forthcoming ANXO Cidery & Pintxos Bar. ANXO, which will work in collaboration with Maryland's Millstone Cellars, is D.C.'s first cidery.

However, thanks to the CIDER Act, that tax cutoff is now at 8.5 percent ABV.

"What happened was that nobody really looked at how cider was made because most cider apples have more natural sugar in them," explains Cordtz. "When you actually ferment that sugar out into alcohol, you achieve more than a 7 percent alcohol beverage."

Carbonation

The CIDER Act's second update addressed a somewhat arcane leftover regulation regarding carbonation levels. "This was a really silly thing, which was clearly leftover from Prohibition, or when they started imposing luxury taxes on French Champagne or something like that with backwards roots," states Cordtz.

"So, if we make it easier for the category to grow, it's going to generate more revenue for the government."

"If it was over a certain level of carbonation, 3.92 grams per meter, then the tax went up like 10 times. Way higher tax. And that level of carbonation is actually pretty low, certainly way lower than beer or Champagne," he finishes.

Why did that matter? "Cider, and specifically pear cider, often requires higher levels of carbonation to counter the higher levels of residual sugar," offers Prendergast.

Not only were producers watering down their cider to a lower ABV, but they were also adding less carbonation. And while diluting a drink obviously impacts its flavor, so too does its level of carbonation.

"Carbonation is cool because it's sort of the transport mechanism for flavor," explains Cordtz. "It takes those flavor components, the phenolics and all of that stuff, and it spreads it out across your palate. It opens it up for you to be able to taste more flavor. So, at a lower level of carbonation, you're not able to achieve that."

L to R: Considering apples at New York's Wassail [photo via Facebook], and bottled cider on offer at ANXO [photo courtesy of ANXO].

Pear Cider

The CIDER Act also added pear cider into the same definition and tax category as apple cider. "If it's apple, and you make hard cider out of it, then it's taxed at the very lowest rate," states Cortz.

"If you add any fruit other than apple, at least that's the way it was, anything at all, let's say you want to add raspberry to it, then it goes to the much higher tax rate. Those laws are still in place, except that we've now put it in that pear can be taxed at the lower rate."

Cordtz describes the efforts to get the CIDER Act passed as bipartisan, and without much opposition for two main reasons: "My understanding of one of the key motivators for congressmen to get behind it was that it was going to be a job creator." It helps orchards and farmers, and encourages new cider producers to get in the game as well. "And as the category grows, they've seen what has happened to the craft beer segment," he continues. "Fortunately the craft beer segment kind of paved the way for us and woke everybody up in Washington D.C."

"... the act will be beneficial for small producers to make really, really creative things just like in craft beer ..."

While tax revenues are directly decreased by the legislation, the category's growth will make up for that. "Even though it has let up on some taxes, it's sort of a wash because everyone figures that cider is going to grow, which is going to bring in more taxes," says Cordtz. "So, if we make it easier for the category to grow, it's going to generate more revenue for the government."

The USACM estimates there are between 300 and 400 companies making cider right now. "I know that there are over 50 in California alone, and 10 years ago there were probably four," says Cordtz. "The association is growing like crazy. It incorporates all types of ciders, and all sizes of cider companies."

What it Means for You

More companies making more types of cider, and better cider, at lower costs certainly helps the consumer. "I think things are really taking a turn for the better, with dry, craft ciders," states Cordtz. "I think that's where the market is going to go. Because of that, the act will be beneficial for small producers to make really, really creative things just like in craft beer, and not have to suffer the higher taxes, and have more flexibility to create more assortments of flavors and different types of ciders. That's what we're doing anyway."

A cider tasting at Seattle's Capitol Cider [photo via Facebook].

For instance, at Sonoma, Cordtz is set to release a 12.3 percent ABV cider, Imperial, that they're aging in whiskey barrels for six months. Previously, they've released flavors ranging from habanero-lime to sarsaparilla.

Plus, more new products will also be able to hit the shelves in less time. "Part of the tax bill that included the CIDER Act includes more funding to help speed up label approval for new products," said Prendergast. "Right now it's an extremely time consuming and tedious process to get a label for a new product approved. Speeding up this process will make it easier for new products to hit the shelves, and faster."

Not only will it be easier and more accessible for producers to make cider, but the legislation should also positively impact the orchards responsible for actually growing the cider apples. "There is currently a shortage of true cider apples, which are different than eating apples," says Prendergast.

"Current apple growers are often very hesitant to jump into growing cider apples. The CIDER Act will spur growth in the industry and show these growers that the industry and Congress are serious about supporting real cider. As more cider apples get planted, we will certainly see a larger volume and diversity of cider in the United States."

"I do think it's the beginning of a much larger movement that will take a hold ..."

Clearly, it's a good time to get into cider, for farmers and producers, as well as for everyone from bars and restaurants to drinkers. "I do think it's the beginning of a much larger movement that will take a hold," said Prendergast. "I think it already competes with beer, it's the go-to substitute for beer drinkers who discover a gluten intolerance or allergy."

While Prendergast doesn't see cider achieving the ubiquity of craft beer, in part due to the expense and difficulty of growing cider apples, he already sees cider as having its own place in the market. "But that's fine, occupying a strong, vibrant, and growing niche is a great place to be," he adds.

Besides producing its own cider, at ANXO, Prendergast plans to have 17 ciders on draft at the restaurant, plus many other bottled brands.  "I'd be very surprised if we don't see several more cider bars pop up in the area, or at least bars that emphasis large cider lists," he said.

Elsewhere across the country, plenty of other notable cider bars are either popping up or growing in popularity. From New York's Wassail, with a dozen ciders on tap and a massive bottled collection separated by country and region, to Oregon's  Bushwhacker Cider, now with two Portland locations, and Seattle's  Capitol Cider, with 20 ciders on tap, a growler program, and an extensive bottled list of its own, available to be enjoyed onsite or purchased to bring home.

As a cider fan himself, Prendergast actually cites the Pacific Northwest as a region worth exploring. "If you go to the Pacific Northwest, you see a good number of cider bars, and more popularity of cider," he said. "I think a lot of that has to do with that area's proximity to the largest apple growing region in the country."

Boom times for cider connoisseurs—just don't look back in two years and say you weren't given a heads up.