Modern Rum Trends: Strengthening the Source Material Supply Chain
I recently asked my Substack subscribers for ideas about what to cover next. One suggestion regarded whether rum makers were “headed for a train wreck” regarding their supply of molasses. Without molasses, you can’t make rum, and the Caribbean sugarcane industry has been declining for decades.
I’ll be the first to admit that global supply chain issues may be nowhere near as interesting as a new rum distillery opening or the latest single-cask hotness from a popular producer. However, I’m the oddball who thrives on understanding the business side of rum. My interest is less about acquiring the latest unicorn bottle and more about understanding the entire rum ecosystem and raising consumers’ perception of rum as a premium spirit.
I’ve heard from well-placed people that molasses is up to 80 percent of a distillery’s production cost. Previously cheaply available from local sugar mills, molasses is seeing demand spike and commensurately higher prices. Guyana, which used to supply its own rum distilleries and many other Caribbean rum makers, now finds itself importing molasses.
As WIRSPA’s community envoy, I have some insights into what member producers are discussing; molasses availability and pricing are among the foremost topics. This awareness helped shape what I wrote in the Evolving Trends in Rum chapter of Modern Caribbean Rum. Below is a chapter excerpt describing the challenge and how many rum producers are responding.
Note: since this chapter was written in mid-2021, certain recent happenings aren’t reflected.
Source Material Supply Chain Strengthening
Molasses is often a rum distillery’s largest expense, and many rum makers struggle with sourcing it. There is increased competition for molasses from industries such as cattle farming, and climate change has reduced sugarcane crop yields in many regions: These twin factors lead to higher prices and decreased availability for rum makers.
Compounding matters, newer and more efficient sugar factories leave less sugar in their molasses, which thus cannot easily sustain fermentation. Some distilleries must augment their normal molasses with higher sugar content cane syrup or high-test molasses, which increases costs.
No other spirit category utilizes a source material that is a byproduct of another agricultural process. All of a grape’s sugar content goes into making brandy. All of the grain’s starches become fermentable sugar when making whiskey. But with sugarcane, sugar factories extract up to eighty percent of the sugar before the resulting molasses makes its way to rum makers.
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For premium rum to continue its growth, the sugarcane supply chain must be integrated more tightly into rum making.
One approach has been around for a very long time: using all of the sugarcane to make rum. That is, dedicate sugarcane crops to rum making by distilling with cane juice or cane syrup. The rhum agricole makers of Martinique and Guadeloupe have been doing exactly this for at least 150 years, as have Brazil’s cachaça producers. In Haiti, Rhum Barbancourt is made entirely from cane juice, and in Central and South America, some distilleries use cane syrup to make their higher-end rums.
However, a widespread preference for using cane juice rather than molasses or cane syrup seems far away. As long as the sugar crystals extracted from sugarcane are more valuable than the rum they could make, sugar mills will continue making molasses.
This was certainly the case during the colonial era and was equally so in recent decades when rum producers competed to sell light bulk rum at the lowest price. But as consumers show they’re willing to pay substantially more for premium rum, the economics could flip; a hectare of sugarcane could become more valuable for making rum than sugar crystals. Perhaps the 10 Cane Project in Trinidad (see Chapter 22) was just a few years ahead of its time.
Rum producers who might have previously relied on purchasing molasses on the open market are taking more control over their sugarcane supply chain to ensure its availability, consistency, and price. In Barbados, St. Nicholas Abbey grows its own cane to make cane syrup, from which it distills rum. A few kilometers away, Mount Gay has planted acres of sugarcane and is building a mill to process it. The mill will extract far less sugar than is typical of commercial processing, with the resulting “first strike” molasses optimal for making rum. And most recently, the West Indies Rum Distillery inaugurated the Harper Sugarcane mill to process the sugarcane crop from the West Indies Central Sugar Cane Breeding Station; the distillery will add the resulting juice to its rum-making repertoire.
A step further is utilizing both cane juice and molasses for rum making. St. Lucia Distillers has a small cane field adjacent to its distillery. The rum made from it is typically blended with the distillery’s molasses rums. A similar situation exists in Barbados, where Foursquare makes moderate amounts of cane juice rum to blend with larger quantities of molasses-based production. Neither distillery is likely to transition to entirely cane juice rum in the near future, but they illustrate that cane juice rum can play a role in a molasses-based rum market.
An even larger shift is transitioning entirely to cane juice. While not a new concept, cane juice rum distilleries that don’t seek to replicate rhum agricole are coming online. The Dominican Republic’s Ron Barceló now uses cane juice rum made at Alcoholes Finos Dominicanos, which Barceló co-owns. By distilling to high strength, the rum is similar to what they previously made with molasses.
In Belize, the relatively new Copal Tree distillery makes both pot and column distilled rum from its estate-grown sugarcane; Grenada’s Renegade has done the same since 2020. In Puerto Rico, sugarcane is growing again, planted by San Juan Artisan Distillers to make their cane juice rum.
The slow transition away from imported molasses and toward local sugarcane has other benefits besides a higher rum yield per hectare. Molasses production inherently strips away much of a source region’s terroir. It’s much easier to exhibit a distinctive terroir from locally grown sugarcane than from molasses that originated halfway around the globe.