U.S. shortage of 'spitter' apples threatens boom in hard cider

By Michael Y. Park

NEW YORK, June 24 (Reuters) - Trying to find a traditional hard cider apple in the United States these days is the pits.

Even as hard cider is enjoying phenomenal growth, U.S. craft brewers are facing a shortage of bittersweet, bittersharp and sharp apples, the fruits traditionally used to make hard ciders.

"They're just not out there," said Colleen Finnegan, owner of Finnegan Cider in Lake Oswego, Oregon.

Finnegan currently sells about 1,000 cases of cider a year, and would like to sell about twice that. But that is not likely because she cannot source enough apples.

The industry is partly a victim of its own success. For five years, hard ciders have enjoyed explosive growth, with a sales increase of 68 percent in 2012-2013 alone, according to the Beer Institute.

One reason for the apple shortage is historical. During Prohibition in the 1920s, trees known to bear hard cider apples became targets of axe-wielding FBI agents.

Popular (NasdaqGS: BPOP - news) bittersharp varieties include Kingston Black, Foxwhelp and Golden Russet. These are not dessert or eating apples such as Granny Smith.

Planting new orchards is a big commitment. An apple tree is a 25- to 30-year investment and it takes anywhere from three to six years before it becomes productive.

Greg Peck, assistant professor of horticulture at Virginia Tech University, said there are no figures for how many so-called spitters - apples too tart or bitter to eat fresh but perfect for cider making - are available currently.

In 2012, the total U.S. crop of apples was 216 million bushels, of which 1.7 million were used to make cider. Of that, Peck estimated, "only a handful" of those were bittersweet, bittersharp or sharp varieties.

At Montana CiderWorks in Darby, Lee McAlpine is lucky enough to have a reliable apple grower but said the situation could easily change.

Still, she refuses to press cider from readily available dessert apples, which many artisanal cider makers claim make for an inferior product.

"People are making cider out of anything they can press, but you just can't make a really sophisticated cider out of fruit that doesn't contain any tannins," McAlpine said.

GO SWEET OR GO ABROAD

The goliaths of the now-stagnant beer industry have put millions into the launches of their own brands to take advantage of the popularity of cider. But for them the domestic cider-apple shortage is barely a bump on the road.

"The commercial cider companies either do not use those types of apples or get them from Europe, so they're not overly affected," said Dan Rowell, acting chief executive officer of C&C Group Plc (Other OTC: CCGGY - news) 's Vermont Hard Cider Co, maker of popular Woodchuck Cider.

Large cider makers say that dessert apples can be used to make perfectly good hard cider.

"When Woodchuck was invented 23 years ago, there were no heirloom apples available in America, so we used what was available and expanded upon that," Rowell said.

"There's over 7,500 kinds of apples on the face of the Earth, and lot of them are common eating apples. We feel you can make a great, complex cider with eating apples."

David Sipes, cider maker for Boston Beer Company Inc's Angry Orchard, the No. 1 brand, said he sources bittersweets from France and blends them with dessert apples from Italy.

For smaller cideries, the shortage of traditional cider apples means the industry might not reach its full potential.

"We liken it to the wine movement from the 1970s, where there had been just Gallo, and suddenly the American palate became very sophisticated with all these varietals," said Finnegan, owner of Finnegan Cider in Oregon.

"In order for cider to grow, other people will have to start developing cider apples, if we want this to be a movement like the wine movement. It does take a commitment."

A single acre of apple orchard can cost a farmer as much as $60,000. For growers, who saw hard ciders enjoy brief popularity in the early 2000s only to lose their fizz almost overnight, it can be a leap of faith.

"It can be an extremely expensive decision, and if you screw up, you pay for it," said Dan Dietrich, an owner of Ridgeview Orchards in Conklin, Michigan. Still, he is putting in 20 acres (8 hectares) of bittersweets and bittersharps next year.

Across the country, universities, farms and cideries are participating in programs to revive long-lost heirloom cider-apple varieties.

Among them is Vermont Hard Cider, which is helping fund research on how to make cider apples more profitable for farmers.

"The lack of apples is an opportunity, not a crisis," said Rowell. "It's going to take time, but we're going to get back on track. We're going to resurrect some of these apples." (Editing by Jill Serjeant and Lisa Shumaker)