American Rum Report #3 — March 22, 2019

Welcome to Friday, everyone. What will you be drinking guilt-free tonight?

Before we get to this week’s stories, a quick announcement:

American Rum Report is moderating a panel discussion on American rum at the Miami Rum Festival this May!

I’ll be joined by Phil Prichard of Prichard’s Distillery, Tim Russell of Maggie’s Farm Rum, and Jonny VerPlanck of Three Roll Estate for a discussion about the current landscape (and future) of American rum.

You can read the full announcement and get all the event details here, but the most important thing to know is that festival tickets start at only $50 and include unlimited rum samples.

Unlimited. Rum. Samples.

If you were to make a March Madness-style bracket consisting of “excuses to spend a weekend relaxing in Miami,” this festival would undeniably be a 1 seed, rivaled only by fellow 1 seed “Cuban food,” which you can also enjoy while you’re down there.

If you’re planning to make it to the festival, shoot me a quick reply! I’d love to grab a drink or two.

Now, on to this week’s stories (the first of which contains one of my favorite rum-related anecdotes in quite a while)...

Smithsonian Magazine dropped a hefty feature on Los Angeles's Lost Spirits Distillery, and if you haven't read it—you're in for a treat.

I'll admit it—I wasn’t expecting much from this story initially.

Other than Matt Pietrek’s outstanding Lost Spirits deep dives over at Cocktail Wonk and this nice feature Wayne Curtis wrote for Wired, most Lost Spirits coverage hasn’t offered much beyond a surface-level retread of the same story:

Co-founder and distiller Bryan Davis’s quest to make six-day-old rum taste like 20-year-old rum by bombarding it with light so bright your eyes would be better off staring directly at the sun.

But this Smithsonian piece offers so much more than I expected.

Take, for example, this gem of a story about Lost Spirits’ ongoing attempt to create an exact replica of Old Medford Rum, one of the United States’ bestselling spirits throughout the 18th and 19th centuries until production ceased in 1905.

After analyzing a sample from a rare 1858 bottle of the original stuff, the Lost Spirits team discovered evidence of a yeast strain that must have been unique to Medford.

So they did what any other rational rum nut would have: dispatched a researcher 3,000 miles to swipe wild yeast from a Medford, Massachusetts cemetery in the dead of night. As the article tells the story: 

“If you happened to be in Medford Square one hot night in July 2017, you might have witnessed a stocky, middle-aged researcher creeping around the moonlit Salem Street Burying Ground laying petri dishes by the gravestones. Each one contained Grade A molasses and distilled water, designed to capture wild yeast, which floats in ghostly traces in the air and, despite mutations over time, remains specific to its location. He continued to the Mystic River to lay other dishes at the spot where Caribbean molasses was once unloaded from boats, and he ventured beneath the stone Cradock Bridge, which Revere had crossed on his famous ride. (The researcher asked to remain anonymous, worried that his nocturnal mission had a certain grave-robbing air. ‘Laying petri dishes in a public cemetery,’ Davis pondered. ‘Do you need a permit for that?’ ‘A bottle of Scotch was involved too,’ the researcher confessed.)”

No matter what you think about Lost Spirits’ products, how can you not applaud their dedication to experimentation and sheer inventiveness?

I couldn’t help but think of a quote from George Taber’s book (Judgment of Paris)about California winemakers’ industry-rocking triumph over French winemakers at the Paris Tasting of 1976: 

“Unlike the French, the new California winemakers had no tradition or handed-down wisdom. They couldn’t pass along a wine heritage because they didn’t have one. As a result, they became experimenters, borrowing ideas where they found them and trying different ways of turning grape juice into wine.” 

It was that spirit of experimentation that led the Napa Valley pioneers to push the envelope with techniques like controlled malolactic fermentation and microfiltering.

I get excited anytime there’s a fresh whiff of that same spirit of experimentation in today’s American rum distillers.

It’s a reminder that there’s still more to be discovered.

Check out the full article, "The Madcap Chemists of Booze," here for some weekend reading.

Speaking of experimentation, Montanya Distillers published a blog post offering more details on their foray into the French market.

The Colorado distillery has actually been distributed by Italian and German distributors in Europe since 2016, but the brand’s new partnership with French retailer V&B marks the beginning of its availability in la République.

This next article from Barron’s, however, has me wondering if Montanya has experienced any of the tariff-induced pains other American craft distillers are reporting...

Barron's: Tariffs are hitting American whiskey and craft spirits companies

Titled “Tariffs Hit American Whiskey Business Hard,” the article is quick to point out that it ain’t just big whiskey feeling the squeeze as talk of trade wars and tariffs escalates—any craft spirits business that’s taken the leap into exporting might be on shaky ground, too.

It cites this story from the founder of Virginia distillery Catoctin Creek, Scott Harris, as evidence:

“Harris says that his company has directly spent $100,000 on export promotion trips to the EU in the years since. The result was that in 2018, Catoctin Creek expected a full quarter of its revenue to come from the European market. Right before the tariffs hit, he says another trip overseas netted a dozen handshake deals he was eager to finalize.

“‘Upon our return, when the tariffs went into effect, our distributor dropped us, and our sales in the U.K. never materialized,’ Harris says. ‘That 25% revenue we expected from Europe was about 1%.’

“Harris points to other distilleries such as FEW Spirits, Sonoma Distilling Company, Journeyman Distillery, Death’s Door Spirits, and Widow Jane, as others he knows were also directly, negatively impacted by tariffs as Catoctin Creek was.”

Although the article notes that only a small percentage of American craft distilleries have made the leap into the export market, it also rightfully points out that, as small businesses, the pain they experience might be harder to brush aside than it is for their big business counterparts.

As if craft distillers didn’t have it hard enough.

Stoli Group is planning to tantalize the cruise ship market with Bayou Rum’s new “super premium” Single Barrel and XO bottlings at the Summit of the Americas show this month.

SPI Group (which owns Stoli Group) acquired the remaining stake in Louisiana Spirits (the makers of Bayou Rum) back in June 2018, after acquiring 72.5% of the company in 2016. And they think cruise ships could be a promising growth channel for many of their products:

“Stoli Group has highlighted the cruise ship channel as having significant growth potential in the Americas region… ‘We are very optimistic for this year, as our expanding portfolio allows us to extend our focus and leverage new opportunities,’ said Stoli Group Regional Director Duty Free North & Central America/Caribbean Lizette Garcia. ‘One area of focus is growth in the cruise channel. Products such as Cenote Tequila and Stoli Cucumber have performed well in US domestic markets and we anticipate success in this channel given US passenger trends.’”

The Bayou Single Barrel and XO rums are both pot-distilled, raw sugar- and molasses-based rums. The Single Barrel is aged 2.5 years in used rye whiskey barrels, while the XO is solera-aged in used bourbon barrels (the oldest rum present in the bottle is six years old).

Bayou, however, isn’t the only premium rum hoping to shape vacationers’ ideas of rum...

Sovereign Brands, which owns Bumbu rum, also sees potential for premium rum brands in global retail travel.

While Bumbu is not an American rum, I think it’s worth understanding the types of products that have the potential to impact consumers’ impressions of rum. And if the market agrees with Sovereign Brands Managing Director Scott Cohen, Bumbu may be on its way to having that kind of impact. From the article:

“Bumbu is a very new brand and is already in the top 4 brands in the premium rum category in the US – we believe we will be at least number 2 by the end of 2019...It is a small category and a great brand like Bumbu can realistically be at the top in short order. This bodes well for the category in travel retail and specifically Bumbu and Bumbu XO, which are the exception to the rule in rum.”

Why does Cohen think travel retail has so much potential for rums in the premium category? He continues: 

“Travel retail is generally a showcase for premium brands. Consumers are likely to buy expensive liquor in travel retail because they are saving (or perceive they are saving) money purchasing there as opposed to in a tax-paid store. Rum performs well in travel retail in the Caribbean and in other tropical destinations where it works as a souvenir. But in other places, rum probably has less market share because there are fewer premium brands that have any kind of international reputation, unlike whisky, for instance, where there are lots of well-known, expensive brands.”

Sounds like the same reasoning Stoli Group has for getting its premium Bayou rums in front of GTR consumers!

There is, of course, a clear difference between Bayou and Bumbu’s products—the taste.

While I can’t speak for the Bumbu XO bottling, hydrometer tests of Bumbu’s flagship rum indicate there's a good chance a hefty dose of sugar is added. The Fat Rum Pirate’s list of hydrometer tests shows a sugar level of 40 g/L.

If you're wondering if 40 g/L would be a lot of sugar, it's twice the level TFRP lists for Ron Zacapa 23. So yes. All of the sugar.

Bayou Single Barrel, on the other hand, registered as zero added sugar, and I would expect the same for their XO Mardi Gras bottling.

My hope is that any overly sweetened, adulterated rum—no matter where it comes from—doesn’t have too much of an impact on consumer expectations of premium sipping rums.