Cider producer seeks capital to build wine-growing infrastructure

An architectural rendering of EsoTerra Ciderworks’ new winery, The Aboretum. The company is crowdfunding to raise capital for the building infrastructure. (Courtesy of EsoTerra Ciderworks)

Courtesy of EsoTerra Ciderworks owners Elizabeth Philbrick and Jared Scott, a 70-acre winery called The Aboretum is being built in La Plata County.

The cider maker has launched a crowdfunding campaign to raise $100,000 to build infrastructure for the winery at 270 County Road 303 on Florida Mesa, southeast of Durango. The company is seeking financing after construction permit costs caused a setback.

There is no definite timetable for the winery’s opening. Philbrick said once the winery building is complete, the owners will look to open it.

“We spent almost $60,000 just to get the land permit,” Philbrick said.

The new winery solves an even bigger dilemma for EsoTerra.

The Dolores building was put up for sale last year and EsoTerra was forced to find new space before the lease expired in November of this year. With a new location southeast of Durango, EsoTerra can build on the customer base it built with the company’s tasting room in Durango.

The alcohol industry is struggling in 2024. Breweries across the country have cut staff—some have even closed their doors.

In July, Pagosa Springs-based Riff Raff Brewing announced it would close its original location and instead locate further north along the San Juan River. Some breweries have noted that Generation Z seems less inclined to drink alcohol than to use marijuana.

Kyle Schlachter, executive director of the Colorado Wine Industry Development Board, said the industry is facing a difficult sales year, with wine sales down 4.5 percent nationwide and individual winery sales down nearly 10 percent.

It is difficult to identify a single factor for the decline in wine sales, he said.

Schlachter suspects that people are spending less due to inflation or that younger generations are actually drinking less.

Philbrick is well aware of the decline of the alcohol industry in 2024, but her own research has shown that younger generations place more value on quality than quantity.

In their view, Generation Z is less likely to spend money on a 24-pack of “cheap beer” and would rather drink higher quality alcoholic beverages instead.

“Instead of going to a party with a 24-pack of Michelob Ultra, bring a bottle of good wine,” she said.

Quality is an important issue for EsoTerra when it comes to cider.

The company uses only fresh apples from local orchards and does not use any additives.

“Cider is about 1 to 2% of the total alcoholic beverage market, and it’s mostly this kind of soda cider,” Philbrick said. “They don’t taste like apples anymore. They taste like pineapple or guava and are heavily sugared. Many ciders have almost twice the sugar as Coca-Cola.”

Cider in the form EsoTerra produces is a type of wine and is called “apple wine” in some European countries, she said.

However, this is the first time the company has worked with grapes.

Schlachter said grape producers’ two-year climate woes may also have impacted Colorado’s wine supply.

“We had a decline in production due to poor harvests in 2020 and 2021 as a result of winter and autumn frosts,” he said.

EsoTerra will grow hybrid grapes in the arboretum. Hybrid grapes are a cross between European and North American native grape varieties. They are often considered more drought resistant and can be grown in drier climates.

Philbrick said Southwest Colorado is on track to become Colorado’s next big wine region – another reason she’s not worried about a decline in wine sales. Although Durango is home to several boutique wineries, there’s nothing there quite like the 70-acre property, and it’s just 15 minutes from downtown.

In addition, EsoTerra has also built a community brand by hosting various events, participating in Snowdown, and providing a gathering place for nonprofit, local businesses in their Durango tasting room.

“It’s more than just the alcohol. We’re a breeding ground for meetups and entrepreneur groups and creative minds to come together and teach classes,” Philbrick said.

But being a winery also brings advantages in distribution costs. Breweries cannot distribute their own beer because of Colorado’s three-tier law. Colorado’s three-tier alcohol law separates the production, distribution and sale of alcohol.

However, according to the Colorado Liquor Licensing Handbook, limited-license wineries are permitted to conduct wine tastings and sell the wine they produce, as well as wine from other Colorado wineries, directly to customers on the licensed premises.

Distribution can consume 30 to 60 percent of a brewery’s revenue, Philbrick says. The three-tier system is why many Front Range microbreweries end up being bought out by larger companies like Miller-Coors.

By being able to sell directly to its customers, EsoTerra can increase its profit margins.

Schlachter said Colorado’s wine industry continues to grow and wineries are becoming more creative in how they run their business.

“I think it’s great that our winemakers and wineries are breaking new ground and making new types of wine that fit with this pioneering spirit here in Colorado. People want to try new things and test local products,” Schlachter said.

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