Sunday, October 20, 2019

Destilería Serrallés on a Mission to Give the World a Taste of Puerto Rican Rum

By on February 22, 2019

Editor’s note: The following originally appeared in the Feb. 21 -27, 2019, issue of Caribbean Business.

The century-old manufacturer of premium rums, Destilería Serrallés, made new investments of more than $22 million in infrastructure and improvements to its Puerto Rico plant to increase its presence in foreign markets.

Its Don Q rum, produced in Ponce, is the island’s best-selling brand. The company is expanding its distribution to nine markets in the Americas and Europe, which include Austria, Greece, Croatia, Portugal, Russia, Ireland, Bulgaria, Singapore and Canada. In addition, the brand has expanded its presence in Spain, England, France, Germany, Italy and the Netherlands as part of its strategic mission to elevate the rum category, as well as educating about distillation and the aging process to promote the excellence of premium Puerto Rican rums to the world.

Serrallés utilizes warehouses in Holland to serve countries in Europe via its relationship with distributor De Kuyper Royal Distillers, a family business founded in 1695. The Dutch company is considered one of the largest spirits producers and marketers in the world, with a presence in more than 100 countries.

As part of its new investments and improvements, Serrallés implemented a new bottling line and a significant expansion of the company’s distillation capacity in Puerto Rico. The Ponce bottling plant was expanded at the end of 2018, with new equipment brought in from Europe, which increased production capacity to 200 bottles a minute.

“The new bottling line, which came about as a result of the havoc wrought by Hurricane Maria on our existing lines, was designed exclusively for Serrallés. This machinery allows us greater flexibility to develop new products and ensures the Don Q rum family continues to expand its international footprint.

“These investments allow us to continue to grow as a company and [increase our] competitiveness with our world-class products, produced in Puerto Rico, to take on the whole world,” said Silvia Santiago, vice president of manufacturing at Serrallés.

Last year, the company also became the main exporter of bulk rum to the U.S. market, said Roberto Serrallés, vice president of business development and sixth generation of the company’s founding family, during a tour of the Ponce facilities.

In addition, Serrallés said that after its contract with Diageo’s Captain Morgan rum ended in 2012, the company returned to greater production volumes, including 11 million gallons of bulk rum, and plans to produce more than 17 million gallons in 2019. “The investments made in infrastructure allow Serrallés to continue to expand bulk-rum production to 22 million gallons,” he said.

This growth in production translates into benefits for Puerto Rico’s economy because increased export volume results in additional net federal funds, from the excise tax cover-over, received by the government of Puerto Rico.

“We work with the government of Puerto Rico to achieve the commitments to offer incentives to Serrallés as well, in the same way as other members of the industry [that are] on the same level playing field in terms of the incentives they provide,” Serrallés said.

Following the end of its the Captain Morgan production in 2012, the Serrallés distillery’s contribution to the government of Puerto Rico dropped by $20 million that year. However, the company’s contribution from rum exports to the States increased to $120 million in 2018, or six times more, exceeding the volume lost from Captain Morgan. The growth of its export volume since 2012 has allowed Destilería Serrallés to contribute more than $350 million in bulk-rum sales revenue to the government of Puerto Rico.

The Serrallés facilities in Ponce manufacture unaged bulk rum for export to other countries. In addition, the company has about 100,000 aged-rum barrels in seven warehouses, which are used to store rum for making Don Q products made from Serrallés family recipes.

The plant is operated by a workforce of some 200 employees dedicated to producing Don Q products. Another team of about 200 people take care of sales, marketing and distribution.

“We thank our employees and business partners because they are a vital part of the growth and achievements of Serrallés. We continue to expand our presence in the world, always ensuring responsible environmental practices and world-class manufacturing [while upholding our] parameters of exceptional quality,” said Philippe Brechot, president & CEO of Destilería Serrallés.

A strategic collaboration to produce Don Q Double Aged Vermouth Cask Finish Rum, made from a blend aged five to eight years in white oak casks and finished in barrels that held Italian sweet vermouth, is among the company’s new endeavors.

“The market is becoming more sophisticated in terms of preferences for premium spirits. At Serrallés, we have 154 years of tradition, merging art with science to create new expressions of fine rums, and this led us to achieve a collaboration with Vermouth Mancino in a double-aging process as a Don Q innovation,” Santiago explained.

Founded in 1865, Destilería Serrallés is one of the oldest family businesses in the Americas. Besides producing Don Q rum at its Ponce facilities, which was recognized for its use of renewable energy, Don Q’s distribution portfolio includes Don Q aged rums, Palo Viejo Rum, Caliche Rum and Barrow’s Intense Ginger Liqueur.

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