A once in a century rum event

Sydney Rum Distillery plans to build the biggest rum distillery Australia has seen in 100 years.

The large format distillery site on the Central Coast - exact location is still to be confirmed – when completed will be one of the top 25 rum distilleries in the world in terms of size, co-founder David Ward told Drinks Trade. Capable of producing 1.2m LAL per year, the distillery will be fitted out with three column stills and a hybrid pot still all set to work seven days a week, right around the clock.

Mr Ward says that when up and running, SRD's Central Coast site will be fermenting 10 per cent of the molasses produced in Australia to make its bottled and bulk rum.

Mr Ward says the Central Coast is ideal given the infrastructure and proximity to the Hunter Valley. SRD also intends to produce brandy using Hunter Valley grapes and mentions that the distillery can also medical grade alcohol which could be delivered to the hospitals dotted from Newcastle down to Sydney.

“There are many different ways to skin a cat,” he says.

One thing he is sure of is size.

"You need to build to scale from the start. We have just sent a 20ft container of Cargo Cult Rum to the UK. You need to be able to deliver on your promise to those markets,” he says.

A smaller sister Sydney Rum Distillery site will be built in Marrickville in Sydney’s inner west and this will be fitted out with a 1000L still.

A vision that has been in the planning for close to seven years, SRD is currently embarking on a $6 million capital raise to push things forward.

In 2015, Mr Ward and co-founder Chris Middleton (who also founded Starward) perceived an opportunity in the rum category.

“Today there are around 500 distilleries producing whisky in Australia and just 60 producing rum,” says Mr Ward. “Rum is late to the party but Australian rum is recognized as being special."

The two embarked on a disciplined and ambitious plan to capitalise on the the worldwide growth in the rum category, the consumer appetite for premium spirits and curiosity for 'the new' and brands with strong provenance: case in points: Australian rum made with Australian sugar cane.

IWSR says: "One market where there is evidence of consumers upgrading to more expensive rums is the UK. Here, premium-and-above rum segments have seen volumes soar by more than 140% in just five years and these higher end rums now make up just short of 10% of the market."

Bundaberg keeps 99.9 per cent of its run right here while seventy-five per cent of the rum produced by Beenleigh Rums - part of the Bickford Group - stays in Australia. The remainder goes to markets including Asia and Europe. Group Sales and Marketing Mnager, Chris Ilman says both Beenleigh and 23rd Street have their sights set on the UK and USA from 2023 with an aggressive expansion plan already under way.

Beenleigh was named Best Australian Rum at the New York International Spirits Competition (NYISC) in 2022.

Sydney Rum Distillery has its eyes set on the international market and plans to export 80 per cent of the bottled rum produced at SRD. SRD forecasts that Europe and the UK will account more than 50 per cent of its bottled rum exports and is about to appoint a team member on the ground to drive business there.

It is already servicing the UK with Cargo Cult Rum which SRD acquired in July.

Two other brands are in the pipeline: Welcome Stranger will launch in UK and Europe next year and Natural Born, 100% Australian liquid and provenance, is likely to be in market by 2025.

SRD will also do bulk contract work which, Mr Ward says, will ultimately support the growth of the independent producers. He estimates that fifteen per cent of the rum produced at SRD will supply other distilleries to support their growth and that of the Australian rum category at home.

He hopes to see the limited offering of rum in Australia will expand and the market broaden.

Mr Ward also says that SRD's brands are garnering interest in the USA - the world’s largest market for premium rum - a year ahead of forecast.

However, while the plans are global, the approach is local. Mr Ward points out the innovation and ingenuity from proof of concept, market research, risk management and engineering to brand design, distillery planning and architecture, is mostly homegrown. He estimates that SRD has partnered with 30 firms to date.

SRD has engaged Italian firm Frilli Impianati SRL for the design and commission of the distillery plant, Allen Associates has been engaged for the design and development of a state of the art cask handling and maturation store and Australian based EPCM firm, ME Engineering, have been appointed project managers.

One crucial partnership is the work that SRD has already done with Mr Ward's long-term friends from Archie Rose, Dave Withers and Tim Hosken who have produced two new make liquids from whence all else will flow.  

SRD’s rums will be made with locally sourced sugar cane and filled with local botanicals and fruits to flavour the liquid, rather than sugars and caramels, to create a whole new drinking experience.

In March this year, Steve Magarry took up the role of CEO for Sydney Rum Distillers, leaving Beenleigh Distillery where he had been working as Group Distiller.

“This is just the beginning of a strategic expansion that will include multiple rum industry opportunities across both Asia Pacific and Australia. Our House of Australian Rum portfolio strategy is to evaluate, collaborate and partner with like-minded rum producers and brands as the industry expands,” Mr Magarry says.

“As the last major spirit to ‘premiumise’, rum holds a unique position in the alcohol market. The past years have seen Australian whisky and gin explode onto the world stage – and now it’s rum’s turn.”