David Ward and his business partners and investors at Sydney Rum Distillery believe so. They’re so confident that they expect to spend $60 million over the next three years to build a distillery,launch brands and develop the business.
Master Distiller at Sydney Rum Distillery Jonny Croft,samples some local rum.Wolter Peeters
“The bulk of the rum around the world at the premium end – anything that costs over $50 a bottle – comes out of the Caribbean and a lot of their infrastructure has been under-invested in over the last half century,and they’ve also got some issues with their sugar cane,” Ward said.
“It’s our view that Australian providence and the quality of our sugar cane and adding value to that[is an opportunity]. The Australian and global[rum] scene is dominated by big players,not dissimilar to the wine and other alcoholic drinks in the past,so we feel rum is the next wave of premiumisation as a spirit.”
The company is looking at a potential site near Gosford to build its rum distillery and hopes to have it under way by 2024.
Meanwhile,the company,which was founded in 2015,is blending third-party rums and buying new make,the alcohol that comes straight off the still,and then maturing it.
Ward said the alcohol industry was a good investment even when the economy was weak.
“In good times,there are always people wanting to enjoy the socialisation that comes with music and parties and good company and[that’s also true] in downturns,” Ward said. “We saw that in the GFC and also in the pandemic. It holds its own as a commodity.”
Greg Holland,the chief executive of Spirits&Cocktails Australia,said there were some very good rums being produced in Australia – especially in Queensland.
Holland said just as people had embraced premium wine and craft beer,the same was happening with spirits.
“What’s happening over the past couple of years is that Australians are … drinking more premium type spirits,” Holland said. “Australians are drinking the lowest level per capita in 50 years,and so we’re not drinking more,we’re drinking better.”
The growth is confirmed in an April 2022 IBISWorld report on spirit manufacturing in Australia,which says revenue and profits are growing for Australian distillers on the back of a strong increase in demand for premium spirits.
The report mentions Four Pillars Gin,666 Vodka and New World Whiskey Distillery (maker of Starward whisky) as the beneficiaries of a shift among Australian consumers to embrace local,premium products.
Bundaberg Rum is still made and bottled in Australia and accounts for 85 per cent of domestic rum sales,according to IBISWorld. Owner Diageo has tried to push Bundaberg Rum into the premium market,with a “master distiller’s collection”.
Holland said the Australian industry was held back by the tax regime because,a disadvantage for smaller brands without large economies of scale.