American Rum Report #28 — May 1, 2020
~ In This Report ~
#1: Koloa Rum Company expands sugarcane production on Kauai and enters new markets on the mainland 🏝️
#2: A stark look at the economic realities American rum producers are facing right now 😷
#3: Let's dive deep on online retail for craft spirits 🛒
#4: New plans for Privateer Rum's always-awaited Distiller's Drawer Day 🗄️
#5: Paste Magazine revisits Montanya's Exclusiva rum ⛰️
#1: Koloa Rum Company expands sugarcane production on Kauai and enters new markets on the mainland 🏝️
Back in September, Koloa Rum Company detailed its plans to expand sugarcane cultivation on Kauai. The company hoped its cane investment would allow it to eventually produce all of its rum from 100% Hawaiian sugarcane again, as it did before the state's last sugar mills shut down several years ago.
It was the type of move that fit right in with one of the six items I identified as 2019's biggest developments in the American rum category—the increasing importance of meaningful raw ingredients. In other words, if you're making rum in the U.S., you need to have a compelling, authentic connection to the ingredients you're using to make it.
For Koloa, that means being able to make a Hawaiian rum from Hawaiian ingredients.
So I was pleased to see additional details on Koloa's cane cultivation progress in this article from Barron's. Rather than farming the cane themselves, the folks at Koloa are partnering with farms throughout the region:
“'The idea first came about in realizing that we’re in the business to make rum and we’re not farmers, per se,' [Koloa CEO Bob] Gunter says, 'so we decided to contract with others to do the labor.'
“Gunter was invited by Retro Farms on Kauai’s north shore to visit and look at how to incorporate its excess sugarcane into production plans. The farm was primarily using the cane as windbreaks, and the total wasn’t much more than an acre at the start. Koloa quickly began incorporating that sugarcane into their rum production, and the agreement spearheaded new thinking to invite other landowners to grow sugar as well.
“Although lands are fiercely protected across Hawaii, Kauai has substantial vacant agricultural land from old sugar production. As Koloa’s needs have grown, Gunter began discussions with various landowners to grow sugarcane on their grounds, using organic farming with the hopes of eventually cultivating 'several hundred acres.'”
Judging by the headlines over at BevNet, Koloa is going to need all the cane it can get if the company hopes to one day match its growing demand. According to a press release published on the site, Koloa is expanding distribution of its rum and ready-to-drink cocktails to Wisconsin (Johnson Brothers is distributing), Virginia (ABC), and Michigan (Imperial Beverage), while also entering 48 Walmart stores throughout Florida.
More signs of growth for a brand that, according to its CEO, has grown case sales and revenue by double digits year over year since it began in 2009.
#2: A stark look at the economic realities American rum producers are facing right now 😷
While this New York Times piece is about the pandemic's impact on the American craft spirits industry as a whole, it features quotes from Todd Thrasher of Thrasher's Rum (Washington, D.C.) and Maggie Campbell of Privateer Rum (Ipswich, MA) that paint a dark picture of what distilleries are up against right now.
Even after what sounds like a resoundingly successful first year of business for Thrasher's waterfront distillery and tiki bar, the business's survival is in question:
“For a while, the bar, Tiki TNT, and the adjacent Potomac Distilling Company were a huge hit. Then came the coronavirus outbreak. In late March, Mr. Thrasher closed the bar and furloughed his entire staff, including himself. Though he is still distilling, he doesn’t know how long he can stay in business.
“'If nothing changes, I’d say I have until July,' he said. 'It’s hard to build a brand when no one is buying.'”
Though circumstances don't sound as dire for Privateer, Campbell points out that circumstances might be different if the distillery hadn't already had eight years in business to build a solid foundation:
“'Starting a distillery is really hard. It takes a lot of capital up front — you’re in the hole for a long time,' said Maggie Campbell, the president of Privateer, an eight-year-old rum distillery in Ipswich, Mass. 'If we were three years old, this would be a very scary time.'”
One hope is that the crisis could lead regulators to loosen up some of the restrictions on how distilleries can sell their products. If they had more routes to sell directly to consumers, for example, their burden might be eased. Campbell pointed out there would likely be other benefits as well:
“'If we can make it easier for distilleries to get products to consumers, we’ll see people who can’t raise a million dollars in capital being able to open a new business,' she said. New voices could, in turn, prompt more innovation into a potentially diverse category that is dominated by just a few spirits, like bourbon and gin.”
Easier access for consumers, fewer barriers to entry for producers, more choice for everyone. Yes, please.
#3: Speaking of new ways to sell spirits, I'm hosting a livestream all about online craft spirits retail with Spirit Hub founder and CEO Michael Weiss next week 🛒
Spirit Hub is an interesting company that's deftly navigated some of the roadblocks that have kept other would-be online spirits retailers from taking off. Although the company launched to only the Illinois market, it expects to expand to Florida, Michigan, Massachusetts, Missouri, and Indiana this year.
Its focus on craft spirits makes it particularly relevant to American rum producers—the vast majority of which would be considered craft producers by just about every definition—so I think this will be a super interesting one for those inclined toward industry conversations.
#4: Privateer Rum alters plans for its always-awaited Distiller's Drawer Day 🗄️
Twice a year, Privateer unleashes fresh batches of its limited release Distiller's Drawer rums. These releases typically run the gamut of unique, adventurous, or just special expressions that stray from the confines of the distillery's core line of rums.
The two days those releases hit the market for the first time are known as Distiller's Drawer Day. The first one of 2020 was supposed to take place this month, but obvious circumstances have forced a change in plans.
Fortunately, the event is still going to happen! Privateer announced yesterday that on June 1, you'll be able to pre-order bottles on its website. June 15-20, you'll then be able to pick up your order at the distillery.
As I noted in last week's Release Radar email, it looks like there will be quite a few intriguing selections to be had this year. If you're gonna be in Massachusetts June 15-20, be sure to put an order in!
#5: Paste Magazine revisits Montanya's Exclusiva rum ⛰️
Paste had a fun idea to revisit five rums the publication had previously reviewed as a coping mechanism for dealing with quarantine. As someone who has also been revisiting many rums tucked away in the back of my cabinet rather than venturing out often for new buys, I can relate!
One of those five rums happened to be Montanya Exclusiva from Montanya Distillers, an aged rum that spends about 30 months in ex-whiskey barrels before a six-month finish in French oak barrels that previously held Cabernet Sauvignon and Port. Though the initial review was quite favorable, some time apart appears to have made reviewer Jim Vorel's heart grow a degree fonder:
“The result is uniquely fruity, herbal and slightly tannic, with a deft combination of sweetness and bitterness that has continued to remind me of Italian amaro whenever I go back and revisit it. It really is one of the most unique American rums I’ve sampled.”