August 28, 2011
Yo-ho-ho and a bottle of Koxinga Gold rum

There is a lot of talk these days in Taiwan about the need for local firms to embrace innovation and begin churning out uber profitable products that can punch above their weight in the global marketplace. The ROC government is making all the right noises when it comes to urging these companies on, but is overlooking a tantalizing opportunity that capitalizes on the nation's agricultural heritage and would work wonders in promoting Taiwan abroad: premium rum.

Taiwan has enjoyed a long relationship with rum harking back to its time as a high-volume sugar cane producer during the Japanese colonial era (1895-1945). Made from local molasses, the spirit continued being distilled even after the government took control of alcohol production and retailing on the island in 1947. This finished in 2002, however, when Taiwan Tobacco and Liquor Corp. switched to using cheaper molasses imported from Thailand.

TTL rum retails at NT$230 (US$7.99) for a 600-milliliter bottle and can be purchased from the company retail outlets, mom-and-pop grocers and some of Taiwan's locally owned supermarkets. Given its harsh taste, no-frills packaging and anemic advertising budget, it is hardly surprising that sales are nothing to write home about. In fact, the rum more often than not is used for cooking and baking as opposed to imbibing.

The long-term neglect of rum by TTL could be the reason for the spirit being passed over by the government in its search for Taiwan-made products that have the potential to take the world by storm. Other factors include modern liquor marketing trends, the dominance of scotch and whisky, the rise of vodka and various cultural factors.

But given that rum is experiencing a worldwide renaissance, this state of affairs must change. Consumers are increasingly thirsting for specialized products from all corners of the globe that promise unique and exclusive experiences. This explains why the selection and quality of rums on the market has never been higher-a trend that shows no sign of tailing off.

According to the latest report issued by just-drinks, an online market research firm, and International Wine and Spirit Research, a supplier of volume industry data, the global rum market grew 3.4 percent between 2004 and 2009, with premium-and-above offerings expanding 9.8 percent. The latter saw sales of 4.2 million 9-liter cases in 2009 out of a global rum market of 135.28 million cases. Compared with the giant premium-and-above vodka sector, which stood at 18.2 million cases in 2009, it is easy to see why analysts are tipping premium rum as having enormous growth potential.

Major spirits firms such as Bacardi Corp., Diageo PLC, The Edrington Group Ltd., Pernod Ricard SA and United Breweries Holdings Ltd. have spotted this opportunity and are upping investment in the premium rum market. But despite their attentions, no single brand rules the roost leaving plenty of room for TTL to carve out a tidy little niche for a homegrown offering. This is particularly true in the Asia-Pacific region, which has flown under the radar when it comes to rum sales. In 2009, the market grew 5.7 percent, with the premium-and-above segment recording a rise of 5.8 percent.

Taiwan, with its rich history of sugar cane growing and refining, has the right pedigree to succeed in the premium rum business. In addition, its tropical climate is perfect for distilling, unlike whisky that requires controlled temperatures and humidity.

But the great appeal of this spirit is that its diversity is celebrated as opposed to being pooh-poohed by the establishment and experts. Tradition, craftsmanship and the land all play an important role in shaping the flavor and distinctiveness of rum; rarely do two products taste alike and there is always room in the market for new, high-quality tipples.

To set itself apart from other premium rums, TTL could work with the Council of Agriculture to persuade farmers growing Taiwan's 610 hectares of sugar cane to increase planting areas and switch over to organic growing techniques. Refining could be handled by Taiwan Sugar Corp., with a tourist-friendly distillery-modeled along the lines of King Car Food Industrial Co.'s Kavalan whisky facility-set up in a region with longstanding sugar cane roots such as Tainan City.

When it comes to organizing the necessary technical expertise, Taiwan is fortunate in that some of the world's finest rum-producing nations are ROC diplomatic allies. These include the Dominican Republic, Guatemala, Haiti, Nicaragua, Panama, Saint Kitts and Nevis and Saint Lucia. Recruiting master distillers, blenders and technical advisors would be a cinch, as would tapping into these countries' well-established marketing and distribution networks.

As Asia's newest premium rum-maker, Taiwan would have to do battle with established premium labels from Australia, India, Indonesia and the Philippines to become a regional heavyweight. But with the government's full backing perhaps it might not be too long before rum aficionados from around the world are raising a glass of TTL's Koxinga Gold rum-named for the island's revered Ming dynasty (1368-1644) general-and toasting Taiwan, a far-off nation known for more than just its high-tech prowess, bubble tea and stinky tofu.

Nick du Toit is a freelance writer based in Kinmen County. These views are the author's and not necessarily those of Taiwan Today. Copyright c 2011 by Nick du Toit

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