Rum has come a long way from its humble beginnings as a gut-rotting liquor beloved by pirates. Today, demand for high-quality, top-shelf rum is growing and Caribbean islands are navigating the turbulent trading landscape to provide bespoke brands and distinctive flavours. Saint Lucia is no exception, having carved out a niche thanks to award-winning products, proactive marketing and a strong focus on exploiting linkages between the rum business and the country’s other big money maker, tourism.
A spirited history
Rum has been a fixture of Caribbean life and business since the 17th century when sugar plantations dominated island industry. While molasses was initially viewed as an industrial waste product, it soon became apparent that the sticky by-product from sugarcane had enormous potential when fermented.
Historians believe that the first rum distillery was in Barbados, but the liquor quickly grew in popularity around the islands. It was to become one of the Caribbean’s most important exports, and instrumental in creating well-worn trade routes between the islands, America and Europe. Heavy taxes were imposed on sugar in the 1700s, leading to a decline in rum production and demand but the downturn didn’t last. Through the 1800s and 1900s, sales of Caribbean rum rebounded, particularly in the dry years of prohibition when rum runners set up shop in the islands to keep desperate Americans supplied.
Today rum is the third biggest player in the US spirits sector, behind vodka and whiskey. According to a report from the West Indies Rum and Spirits Producers’ Association (WIRSPA), global rum sales grew by 40 per cent between 2000 and 2010, with spiced rum and premium brands driving the market. “Internationally rum is the spirit of the times, and demand for premium products is growing fast. We have to position ourselves to take advantage of this,” says WIRSPA CEO Vaughn Renwick.
Tourism linkages
As more drinkers seek out premium-quality rums, the spirit remains a vital part of Saint Lucia’s tourism product, and the Saint Lucia Hotel and Tourism Association (SLHTA) has been quick to jump on the trend for local liquor. The SLHTA hosts several food and rum-themed festivals each year, giving the country’s bartenders and distillers a chance to show off their skills, and last year hosted the first annual Caribbean Rum Awards.
Saint Lucia did well in all categories but taking home top prize in the Best Gold Rum category was Bounty Premium Gold. Bounty is produced by St. Lucia Distillers Group of Companies, which was formed in 1972 when two family-owned distillers joined forces to offset the loss of sugar cane production by maximising efficiencies. Located in the Roseau Valley and awarded ‘Distillery of the Year’ at the 2017 World Spirit Awards, St. Lucia Distillers now produces over 20 branded rums and has an annual turnover of around US$ 18mn.
Managing Director Margaret Monplaisir says tourism is responsible for around 20 per cent of sales. St. Lucia Distillers sells to hotels and airport duty-free vendors. The group also offers factory tours and has a heavy presence at festivals both at home and abroad. Last year St. Lucia Distillers launched its Bounty rum range in the UK with a presence at the world-famous Notting Hill Carnival.
“Our brands, Chairman’s Reserve and Bounty, have always been strongly linked with big events and festivals,” says Monplaisir. “These events are important in showcasing Saint Lucia to the rest of the world and give us direct access and exposure to international and local consumers. The response has always been positive. We have earned the reputation of being a small distillery making quality innovative rums.”
More can be done to build profitable crossovers between the tourism and rum industries however, according to Monplaisir who says: “Government should incentivise the tourism sector to support local manufacturers. Every hotel, restaurant and bar should be serving local rum as their pouring spirit, allowing guests to experience the ‘spirit’ and culture of our country.”
Challenges and opportunities
Being a major export, Saint Lucia’s rum is vulnerable to global trade issues, and the economic environment has been tumultuous over the past decade. US subsidies for Puerto Rico and the US Virgin Islands have put some Caribbean countries at a disadvantage and created an uneven playing field. In addition, factors such as logistical challenges, the high cost of production and increased competition from international players with more resources are squeezing Caribbean producers.
Renwick says: “The industry is up against global players whose marketing budgets are larger than some of the economies of our countries. Additionally some of the biggest players receive subsidies that dramatically reduce their production costs.
“We do not benefit from any subsidies so we have to present ourselves as authentic and premium. As the home of rum, we can present a diverse group of brands with authentic origin and provenance. We have an amazing rum heritage in the Caribbean and when we tell our story it adds real value to our brands. Recently we’ve seen a lot of brands with dubious credentials presenting themselves as authentic, and we expect this to be even more of a challenge in 2019.”
To protect the industry, Monplaisir would like to see regional governments lobbying for improved trading arrangements with international competitors, but says there are also steps that can be taken closer to home to assist Saint Lucia producers, such as removing the requirement to give Customs 48 hours notice, saying this is too rigid for shipping schedules which can change at the last minute.
Looking ahead to 2019, Saint Lucia Distillers is preparing for more growth in the premium category. This year, it will bring its “super premium” new Admiral Rodney range to market and expects to launch its flagship brand Chairman’s Reserve in 10 new countries. The group is also making “a significant investment” in a new visitor experience to build on its factory tour. Monplaisir is optimistic about both the company’s fortunes and the industry’s outlook saying: “Quality and innovation are at the centre of our strategy in order to remain competitive with other brands.
“Caribbean rum is a competitive sector, but it is also a very dynamic sector. Today international rum drinkers are more knowledgeable and place strong importance on quality, authenticity and heritage. In this regard, Saint Lucian rums enjoy well-deserved recognition from rum enthusiasts all over the world.”
