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How the Rums of Puerto Rico Program Works: An Interview with Director Alexandra Salgado

In every discussion of American rum, one question almost always pops up:

How exactly do you define the style of “American rum”?

Are there certain characteristics or tendencies that make a rum produced in the United States distinct from rum produced elsewhere?

Unfortunately, the answer to that question is pretty unsatisfying. It’s similar to what you’d get if you asked people from Texas, Tennessee, and South Carolina if there’s an “American style” of barbecue:

Kind of, but not really.

With so many distilleries in different parts of the country trying their hand at rum—many for the first time—any attempt to define an overarching style is rendered useless by the many exceptions that will exist to it.

In other words, there are plenty of American rums that are different from what you’ll find in other countries…but they’re not always different in a cohesive way.

Rather than an overarching national style or standard, it’s more likely that regional styles—and possibly even standards—will develop over the next decade or so.

In fact, there’s one part of the United States that already has its own specific rum standards: Puerto Rico.

Yes, in case you forgot, the small Caribbean island is, in fact, a territory of the United States. Its citizens are American citizens. And since the mid-20th century, Puerto Rico has had its own standards that rum must meet in order to call itself a “rum of Puerto Rico.”

It started in 1948, when a government-owned corporation called the Puerto Rico Industrial Development Company established the Rums of Puerto Rico program to promote the Puerto Rican rum industry and help it maintain certain production standards.

Today, if you visit the Rums of Puerto Rico website at RumCapital.com, you’ll see those standards loud and clear:

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But Rums of Puerto Rico isn’t just a collection of standards. It’s a program that actively promotes the rums that meet those standards, like Don Q, Bacardi, and Ron del Barrilito, just to name a few.

Currently, for example, Rums of Puerto Rico is in the midst of a pop-up tour to promote its rums through a series of tastings and parties all across the U.S.

But how exactly does the program work? And could it help us imagine what programs for other rum-producing regions of the U.S. might look like?

Those were the questions I had in mind when I reached out to Rums of Puerto Rico’s director, Alexandra Salgado, to learn more about the program, the pop-up tour, and how she sees the Puerto Rican rum landscape evolving.

Our conversation has been edited for clarity and length.

At a high level, how does the Rums of Puerto Rico program work?

Rums of Puerto Rico is a government program that's part of the Department of Economic Development and Commerce. And it's also an innovation of the Puerto Rico Industrial Development Company. I always say that we are a small marketing agency within a government agency because we are a small group of marketing people that help the rum brands in their promotions and marketing. 

Why? Because the rum industry is a really important industry to the economy of Puerto Rico. It represents over $300 million each year to our economy and over 700 jobs in the distilleries. And all this because I'm sure you're aware of the cover-over law that we receive all this money each year thanks the rum that we export to the United States. 

Quick Sidebar About the Cover-Over (this is Will writing again): The rum cover-over is a complicated topic, but at a high level, it means that excise taxes on Puerto Rican rum sold in the U.S. are returned to Puerto Rico (the same goes for the U.S. Virgin Islands). Some of this money can then go back to the distilleries as subsidies. Puerto Rico also receives some excise taxes from rum imported from other countries that’s sold in the U.S. This is in contrast to distilleries in the mainland U.S., which pay the excise tax on every bottle sold, but do not get any of it back. There’s a decent explainer you can read on it here. Okay, back to Alexandra!

So as part of the Department of Economic Development, we help the brands and we also give them incentives to do their own marketing. So we do not control the distilleries and we do not own them. We help with their branding and marketing. We get a lot of sales through the United States, and we get a lot of money to our economy. So it's a really, really important industry for us.

What goes into establishing and maintaining a national identity around rum? How do you go about setting production standards?

Puerto Rico by law has some standards by the Department of the Treasury. In order for a brand to earn the right to say in its label that it’s a rum of Puerto Rico, it has to follow those standards. [The rum] has to be made with molasses. It has to be aged at least one year, which is the most important one. It has to be a continuous distillation process and, of course, it has to be manufactured and distilled in Puerto Rico.

That's why we say we are the rum standard. Because we follow some rules and standards that maybe not other parts of the world follow. And we're also named the rum capital of the world because over the 70% of the rum sold in the United States comes from Puerto Rico.

The seal you’ll find on rums that meet Rums of Puerto Rico’s standards — Image courtesy of  Rums of Puerto Rico

The seal you’ll find on rums that meet Rums of Puerto Rico’s standards — Image courtesy of Rums of Puerto Rico

What are some things happening in Puerto Rican rum right now that people might not know about?

I think the awakening of premium rums, which is part of a global thing that's happening right now. We do have a lot of premium aged rums that are really good, and people are starting to know about them and get an interest in them.

A few years ago, all people drank was white rum and coke, you know? I think that was a misconception because people thought it was a cheap product, that it was nothing comparable to a good brandy or good cognac. And now you have an awakening of premium brands and aged rums, and people are starting to look at rum like something that is really a premium product. So the category is growing really fast.

Has that premiumization caused you to shift the way you market certain products or brands that are part of Rums of Puerto Rico?

Yes. Right now our marketing is focused more on the premium aged rums. We do that by tastings so people can experience the product, not in a cocktail, but as a premium sipping rum. Also, we are creating new cocktails with premium rums that people are not used to, because usually the cocktails were always made with white rums. Now we're seeing that in the cocktail world you can get a pretty good cocktail with a premium rum.

Where do you usually suggest someone who is less familiar with Puerto Rican rums starts?

If you like a lighter rum you can start with a Trigo, which is a really good premium rum of Puerto Rico. Not a lot of people knows about it and it's a surprise for most people that try it. But if you like something deeper, you can try a Ron del Barrilito, which some people call the cognac of the Caribbean. And also the Don Q Gran Añejo if you like something deeper that has a spicy feeling. I say everyone can find a rum of Puerto Rico that they will like. You just have to try it.

Image courtesy of  Rums of Puerto Rico  — Trigo and Ron del Barrilito are on the right end.

Image courtesy of Rums of Puerto Rico — Trigo and Ron del Barrilito are on the right end.

Rums of Puerto Rico is currently doing a Pop Up Tour of tastings and parties across the U.S. What was the process of organizing that tour like? How did you decide which cities to focus on?

Yes, we're starting a rum tour in the U.S. and the main purpose is, of course, we want to promote our rums and our brands throughout the United States, but also because in March in Puerto Rico we always do the Taste of Rum, our rum festival. We try to give people a little taste of what that event is and then get them to go to San Juan, Puerto Rico in March and visit us.

So we're going to be in cities that already have our rums, but that we’d like to increase our presence in. That's why we chose San Francisco, Los Angeles, New York, Washington, which are markets that already have our rum and know about our rums, but maybe don't have all of our brands. We want to introduce new brands. Also some are markets that have a lot of Puerto Ricans that have come to the mainland after [Hurricane] Maria. They are our ambassadors now, so we want them to continue supporting our products.

How has the rum industry in Puerto Rico been impacted since Hurricane Maria?

Thankfully, Maria didn't affect a lot of the industry because the distilleries, thank God, didn't have a lot of damages. They could recover really fast and they kept all their employees and they kept working. So thankfully the industry didn't suffer I will say at all, other than a month maybe without electricity. Some of our distilleries make their own energy, so they kept working and kept in business. The few distilleries that suffered damages, the Puerto Rico Industrial Development Company helped them with the damages and helped them get new machinery.

When you’re doing a tasting seminar or showcasing Puerto Rican rums, what are the most important things you want people to learn?

We always like people to know about the standards because it's something that differentiates us from other parts of the world. It lets the consumer know that they're having the best rum in the world because they can be sure that they have something that is followed by law.

But also I always like them to know that when they buy our rums, they are actually helping our economy. As a government agency, that does something that's so important for us. We want people to know that it doesn't matter which of our brands you're having, you're having a great product, you're having a quality product, and you're also helping our economy.


So, what can the Rums of Puerto Rico program tell us about what other regional styles of American rum might look like in the future?

First, we should recognize a few obvious differences that make Puerto Rican producers’ situation unique.

Rum is not a $300 million industry in any other part of the country (yet!). There also aren’t any states in which rum producers get some of their excise tax back via subsidies that come from a cover-over.

That said, government funding is not a prerequisite for creating programs that promote regional styles of liquor.

Empire Rye, for example, started as a consortium of six distilleries in the state of New York that defined standards of identity for its own style of rye whiskey. New York distilleries that produce a whiskey that meets those standards can market it as an Empire Rye and bear the organization’s mark on the bottle.

Perhaps rum producers in a part of the country like New England—which share some stylistic similarities, along with a regional rum tradition—could collaborate on something similar. It’s easy to imagine such a collective as a rising tide that lifts all boats, promoting a singular distinctive style on the backs of many brands rather than everyone bearing the burden alone.

The optimist in me can even imagine a future in which these types of grassroots organizations are able to earn funding via tourism grants. After all, Bayou Rum in Louisiana recently scored a tax exemption on the strength of the tourism it brings in that allows it to pay 80% less in taxes on $4.2 million worth of its property.

Differences aside, there are some ideas for producers from other regions to take away:

Standards can be specific without being too restrictive. If you look at the standards for Rums of Puerto Rico—molasses base, continuous distillation, aged at least one year in oak, distilled in Puerto Rico—it’s easy to see there’s still room for diversity of style. Rums can be part of the same religion without having to have the exact same doctrine.

A shared story can be powerful. Sometimes, this can be as simple as coming from the same place. It can be the idea of carrying on a tradition. Or bolstering an economy. For something like New England Rum, it could be the revival of a dormant historic style.

Shared stories could also stem from ingredients—what if producers of rum made from fresh-pressed cane juice from American-grown cane developed a collective around their own standards?

Shared interests can bond producers together. Just as Puerto Rican producers want to help their local economy, I’d imagine mainland producers want to make similar contributions at the state and city level. This can also be a way to leverage support.

Time will tell if we see more organizations spring up around regional rum styles, but for now I recommend taking some time to check out what Puerto Rico has to offer. You can find all the cities and dates for the current Rums of Puerto Rico popup tour right here, which is running until December 21.

InterviewsWill Hoekenga