Pennings Farm Cider: Building a Sustainable Farm Business
Running a successful farm in today’s economy requires creativity and versatility. In addition to managing crops and anticipating the weather, farmers must be expert business planners, marketers, and communicators. For Pennings Farm, a 100-acre apple orchard in Orange County, this has meant a thirty year evolution that includes a farm market, pub, garden center, ice cream stand, beer garden, hop yard, and, starting in the spring of 2016, a cidery with a taproom.
Expanding from an orchard to a series of small on-farm businesses was motivated by economic necessity as Pennings, like other traditional family-run orchards, found it harder and harder to compete in today’s markets. The goal was to expand the retail operation by attracting new customers like local food enthusiasts and day trippers from New York City by offering on-farm activities for the whole family. It hasn’t been an entirely smooth process. “A lot of what we did on our own was trial and error and hope for the best,” Steve Pennings told us recently, “and that got us into a position that wasn’t very healthy financially. You can only get away with that so many times before you’ve got to bring in some kind of consultation.”
That consultation has come in part from the Hudson Valley Agribusiness Development Corporation (HVADC), an LEP grantee partner that provides economic development tools to support local farm and food businesses. “We take the model we’ve seen in nonagricultural economic development and we apply it to developing the local food system,” HVADC’s founder and Executive Director Todd Erling explains.
The Pennings Farm cidery was a great match for the HVADC model. “Pennings Farm has been very progressive in their thinking of promoting agriculture beyond picking the apples,” Mary Ann Johnson, Projects Director at HVADC says. “They carry a lot of local products from other farms, they have a great café that serves terrific food, and now they will have their own cider.”
The HVADC approach grew out of a study conducted in 2004 by the American Farmland Trust to identify specific issues faced by farms in the Hudson Valley. Erling, who was then working for the Columbia County Economic Development Office, was already offering economic development services to agricultural businesses in Columbia County. When the report came out, it was a call to expand this work to cover the whole Hudson Valley. Today, HVADC has partnerships with economic development offices in seven Hudson Valley counties. It is a model that has caught on. As HVADC celebrates its tenth anniversary it will mark having supported its 150th client. “The need for this kind of support is universal,” Erling says. “In the last three years we’ve had an over 100 percent increase in requests for services.”
“Farming is a business,” Johnson says of their work. “The general public, for whatever reason, often just doesn’t see it that way. I would say our services are geared toward the agricultural industry just as other economic development offices are geared towards high tech, or manufacturing, or other industries.”
In agriculture, as in all businesses, the outside perspective of a third party consultant can be critical to success. “So much of a business is putting out fires,” Erling says, “and sometimes the strategic stuff you need to work on, the expansion opportunities, the new market opportunities, they’re beyond the daily fire.” HVADC puts farmers in touch with outside experts in marketing, accounting, business coaching, and finance. Most of these experts work in industries beyond the agricultural sector, which means they often bring an expertise and perspective farmers otherwise don’t have access to. Moreover, the cost of their services is subsidized by outside grants and government investment so that farmers only cover twenty-five percent of the actual price.
For Pennings Farm, streamlining the cider making process was quickly identified as an opportunity for the farm to become more economically viable. In the past, their apples were picked at the farm and then brought to a neighbor to be pressed into cider. That cider was then brought to the Warwick Winery where it was put in barrels to be fermented. When the fermentation was finished, the hard cider was sent back to the farm in kegs to be sold at the café. With a new cidery, the production process will take place almost entirely on the Pennings Farm itself, giving them greater control of quality, varieties, and marketing of their own branded value-added product. Mary Ann describes the role of HVADC: “We helped them think through what a new cidery would look like – structure, plan, financing and getting them ready to go with financial projections to a bank or other lender. They have now secured loans and are putting up a building and purchasing equipment to get the business up and running.”
Set to open in spring 2016, the new cidery will complement the existing on-farm businesses and give visitors even more reason to stay on the land and support the farm. “We draw a lot of people out of New York City to Orange County,” Steve Pennings says. “They like the wineries and the breweries, and now the ciders are going to keep drawing them. We can satisfy everybody’s palate.”
Perhaps most importantly though, the new venture is going to be managed by the next generation of the Pennings family. As a third generation farmer, providing an opportunity for his children to explore the possibility of taking on the family farm is appealing. “We’re not really at a point of succession planning,” Steve Pennings said, “but involving our children in the business is part of that. This is going to operate on a part of the farm that is going to be theirs one day. So we keep them involved, keep the Pennings name in agriculture alive, keep my parents legacy alive.”
“The Pennings Farm story is nice because it brings a second generation back to the farm to continue the operations,” Mary Ann says. “It’s a story we’re starting to hear more about. I think ten years ago farmers weren’t always encouraging their children to come back. It was so difficult. But now I think that story is changing.”