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Rum industry still performing well

11/27/2011

By Janelle Riley-Thornhill

The local rum market has remained fairly stable over the last ten years, hovering around the sale of 170 000 cases per year in Barbados and the industry as a whole contributes overall as much as $60 million in export earnings to the economy.

According to Dr. Frank Ward, Managing Director of The Rum Refinery of Mount Gay Limited and Chairman of the Barbados Rum Committee, this performance is in spite of the fact that there appears to have been a slight drop off in local sales between 2009 and 2010, which he noted, could be attributed to the prevailing economic conditions.

Dr. Ward, who is also the chairman of The West Indies Rum and Spirits Producers’ Association Inc. (WIRSPA), explained during an exclusive interview with the Barbados Advocate, that the local consumption of rum is not attributed only to locals, but the tourist population as well. As such, he said that there may be a correlation between the drop-off in tourist arrivals and the reduction in the actual consumption of rum during that period.

Nevertheless, he explained that while this was a source of concern, the industry in general is very export oriented, with as much as 80 per cent of the rum produced being exported in bulk, and so he said, the impact of that downturn on the overall sector, was minor.

Dr. Ward explained to this newspaper, that like most of the other islands in the Caribbean, the export performance of the Barbados rum sector is driven by the sale of bulk rum, which is shipped to customers who then bottle it under their own brands. The problem with that, he suggested, is that it is not a very high added-value product, compared to branded rum which essentially would be bottled in Barbados, and sold under one of the recognised brands in the export markets and in this respect he suggested, companies are losing out.

“We would derive a lot more money from that, but those volumes are dwarf by the sale of bulk rum and this is generally still the situation in the Caribbean as a whole. We are gradually attempting to shift from that part of the market, to a more added-value product, but it would depend on the strategy of the individual companies,” he stated.

Turning his attention back to the local market, the rum specialist indicated that they continue to compete with other spirits, but there is also a bit of competition within the rum sector itself. He explained that to some extent, consumers seem to be shifting from brown to white rum.

“There is one particular brand that is deriving considerable success right now in that category and there is the possibility that that switch might be taking place. But before, the spirit
that was very challenging locally to the rum category in terms of consumption was vodka.
Vodka sales seem to have declined slightly, and again I think this can be attributed to the prevailing economic conditions,” he added.

Nevertheless, the WIRSPA chairman noted that while all alcoholic beverages can be considered competitors of rum, vodka is probably still the biggest competitor to rum locally. He said that while you can make vodka from any fermentable material – rum must be fermented from the products of the sugar cane – be it sugar cane molasses, sugar cane juice or sugar cane syrup and the price of molasses remains quite high at this time.

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