Local craft distillers in Cambodia are on the rise and snapping up international accolades. As business startups in a fledging environment, these entrepreneurs have embarked on enterprises in a rapidly growing market and experienced all of the growing pains associated with their industry.
Cambodia is still seen as a convenient country to start a business, brimming with potential, and with a rising middle class and a wealthy elite, as well as a constant stream of international expats and travellers, the refined palettes are also being catered to.
Cambodian-produced spirits are successfully taking on the global brands in the Kingdom with the support of Cambodians and expats who are proudly consuming Cambodian locally produced spirits; gin, rum, vodka, absinthe and more.
Cambodia, Phnom Penh in particular, has seen a rapid rise in more high-end and boutique bars, elegant rooftops bars and cocktail bars offering the local distillers a supportive social market.
In addition, the strong local agricultural market provides access to reasonably affordable and high-quality raw ingredients, while manageable setup business costs have also been favourable. These businesses are also improving the standards of the alcohol on offer, and working closely with local supply chains, farmers, retailers and other B2B industries.
It’s not all smooth sailing as these distillers are pioneers in Cambodia and are paving a way for others to follow. On their journey, they also have had to navigate setup pains, deal with resourcing obstacles and more, but now have expanded beyond the Cambodian borders.
Even with a global downturn, Cambodian distillers have been innovatively adjusting to the market, pivoting to produce hand sanitizers with their alcohol.
We spoke with some of the leading craft Cambodian distillers to find out their experiences in setting up a business in the Kingdom and how they see the market and opportunities develop.
Craft distiller Industry
The craft distillers industry has big market potential. Grand View Research reported in 2017 that the global craft spirits industry will be worth $80.43 billion by 2025 while a more recent study in 2020 from Advanced Market Analytics suggests the Craft Spirits Market will be worth $79.96 billion by 2024. Gin is also anticipated to be the fastest-growing product segment of the market.
The Asia Pacific is expected to create “lucrative opportunities for distillers owing to tremendous potential in countries such as China, India, Thailand, Indonesia, Malaysia, South Korea, Australia, and Japan” so as local distillers gain international repute and export their products, they are looking at a bright future.
Samai Rum Cambodia
Samai Distillery is the brainchild of its two co-founders: Daniel Pacheco and Antonio Lopez de Haro, both Venezuelans who used to attend the same high school.
After Daniel graduated, he attended Columbia University in the United States and his initial arrival to the Kingdom of Cambodia in 2009 was to work on a solar energy project. After graduating with an engineering degree, Daniel was invited back to Cambodia to supervise the installation of the solar systems for an NGO.
In what was supposed to be a month-long trip, Daniel grew to really enjoy Cambodia and saw that it was a country full of opportunities. He liked the energy and potential and decided to stay and set up a solar energy company to bring electricity to rural areas of the SEA nation.
Antonio had spent three years in Shanghai after high school and then moved to Singapore where he obtained an MBA from Singapore University. He initially visited Cambodia as a tourist while studying but gradually spent more time in the Kingdom on return visits. After his successful graduation from college, he thought it was a good opportunity to move to Cambodia.
In 2011 his first project in Cambodia was launching Chinese House (the now-defunct bar and restaurant). He also had his hand in setting up Botanico in the capital in 2009 and was part of the team behind Bar Sito, Phnom Penh’s first speakeasy cocktail bar at that time.
In 2014 the pair reunited to launch Samai Rum and both are also investors in the company, and acting Directors of the Phnom Penh based rum distillery. The pair do add that they “have a few other investors as well, and actively looking for new investors for the growth phase.
Although neither Daniel nor Antonio had a background in distillation, from the start they hired a very solid team with lots of experience. The brand has grown to claim international accolades while also being expanded into Europe, and more specifically in Spain.
Cambodian Rum – SAMAI
Why did you decide to start SAMAI in Cambodia?
The idea came from one night when we were drinking a bottle of imported premium rum that made us realise that Cambodia, with such an abundance of top-quality sugarcane and molasses, was not producing its own rum.
We were shocked and decided to embark in a mission to create Cambodia’s first rum distillery and brand. For us, seeing Cambodia with such a volume of high-quality raw ingredients but with not a single local rum brand, it made no sense to us. So we had to do it, against all odds.
What was the business application processes you had to go through to register SAMAI in Cambodia?
We went through multiple processes of registration with different Cambodian Ministries for a variety of permits, licenses and certificates. There was a combination of doing some processes directly ourselves, while also using services from agents and lawyers.
In Cambodia, every Ministry is independent, they each have their own processes and demanded their own permits/licenses, therefore there was not a one-stop-shop to get all the necessary steps done in one place in 2014.
The process was very easy and extremely difficult at the same time. Easy in the sense that as long as you have all the documents and the resources, then you can get registered and get all your necessary permits.
But at the same time, being Cambodia’s first rum distillery, it meant that not many people knew what kind of permits and licenses we needed in order to operate. So we were sent from office to office, from agent to agent, for many many weeks, and still, some Ministries did not know which permit/license we needed to get for our specific distilling activities.
At the time of registering in 2014 the whole process was done offline, but these days you can register your company online through the website of the Ministry of Commerce.
What changes have you seen in the Cambodian market since 2014?
The local scene and market have changed dramatically since we started in 2014. At that time not many people in Cambodia knew what rum was. They would call our products “whisky” or “wine” and had no idea that you could make such a high-quality product from molasses and sugarcane.
Rum consumption was very low. It has changed now, and a lot of the credit can be given, not only to our products and branding, but also to the Thursday Nights at Samai Distillery when we open to the public.
This has given people a chance to come inside our distillery and learn about our production process and taste our products. That has made them appreciate the craftsmanship and dedication we put into every bottle of SAMAI and has educated the Cambodian market on this form of spirits.
How optimistic are you on future growth in Cambodia?
SAMAI Distillery is just at its beginning. With the new investment round and the new distillery planned, we definitely see room for expansion. Even if the COVID situation around the world might slow down the project, it’s our top priority to increase our production capacity.
We are also exporting to Singapore, France, and Spain. Our spirits are also available online across all of Europe and we do plan to extend the international market in the coming years.
We also have a lot of requests of single casks and special limited editions by very specific clients: renowned mixologist/bartenders, luxury hotels, some liquor stores and even our distributor.
Being currently limited by our production volume, these projects are a very good opportunity for us to reach rum lovers in different countries.
What products and services do you offer at SAMAI?
Being a premium rum distillery, we concentrate on producing top quality rums. We have a very balanced portfolio of rums, ranging from:
- SAMAI White Rum: is a blend of pot still & column still rums aged for a minimum of one year in ex-bourbon barrels. We then filter our aged rum with active-charcoal giving the liquid a clearer appearance & smoother body while keeping the original flavours intact. Very well balanced, you will savour notes of coconut, ripe banana and dried fruits, with a delicate finish of floral and nutty notes. This is the perfect ingredient for the classic rum cocktails.
- SAMAI Gold Rum: Made with best-quality Cambodian sugarcane, this handcrafted rum is distilled in our 1800’s copper still, aged in French & American oak barrels and Sherry casks. It has natural hints of oak, vanilla, caramelized honey and dark chocolate. We add natural Cambodian honey (Preah Vihear honey) and feel it is best enjoyed neat, on the rocks or in truly exceptional cocktails.
- SAMAI Kampot Pepper Rum: Kampot Pepper gives this rum a crispy sweet aroma with overtones of guava and eucalyptus. Spicy, fresh and elegant, it adds just the right kick to this unique rum. Made exclusively with red Kampot pepper from La Plantation Kampot Pepper Farm.
- SAMAI PX Rum Liqueur: This limited edition rum is matured in the finest ex-Sherry American oak barrels with exquisite Pedro Ximenez sweet wine from Spain. Silky with beautiful notes of plums, figs and raisins. You will experience a long finish of chocolate, coffee and toffee. To be enjoyed neat, as a digestive with dessert, or with a Cuban Cigar.
- Experimental batches: We are also working on a new Samai Spiced Rum that will be launched later this year, as well as new Single Cask editions and other collaborations for new products.
We have won multiple awards and medals in the most recognized international competitions, including multiple Double Gold Medals which has positioned us as the best rum of its category in the whole world. We have won competitions in Madrid, San Francisco, London, Hong Kong, Singapore, and many others.
As we mentioned, we open our distillery to the public every Thursday night from 6pm to 11:30pm, and everyone is welcome.
How competitive is the local and regional market for your rums at SAMAI?
The fact that we use only Cambodian ingredients makes it very unique. We were the first rum distillery in Cambodia, and so far, are the only one producing premium & industrial rums.
What makes the rum so special is the molasses. What we saw at the sugar factories in Cambodia was they still contained a lot of sugar post-production and it was of very good quality. So the flavour of SAMAI is very unique because the combination of Cambodian soil, weather, climate, and sugarcane varieties produce a unique flavour.
There are multiple factors that need to balance and be in harmony to create a premium quality rum. Access to the best raw materials in the world is already a big step and being able to control the whole production process, from fermentation to distillation, ageing, blending, and bottling, is key, which is what we are able to do at SAMAI Distillery.
The rums also mature in oak barrels for an average of two years! (See more here about their rum-making process).
SAMAI distillery also produces alcohol-based hand sanitizer during COVID-19 to offer a hygiene solution made from some of the alcohol from the distilling process.
What are the main challenges in doing business in Cambodia?
We do not come from an alcohol/rum production background, so our learning curve has been extremely steep.
There was no one in Cambodia with any rum production experience or skills that we could employ when we started but we were very lucky to have Ms. Champich, our Production Manager, who is a young and super smart Chemical Engineer and now Cambodia’s first and only Rum Maestro.
With the government, it has been ups and downs. Not even at the Ministry of Industry and Handicrafts (renamed The Ministry of Industry, Science, Technology and Innovation in January 2020) did they know about the laws, regulations, and licenses that we needed to distil. It is really easy to apply for any license, but it is just about knowing which ones are needed.
Patience has been key due to the time it takes the rum to distil and funding has also been a very difficult journey. Not many investors understand the pain of being a small start-up needing to age a product for 2 years before being able to bottle it and sell it. This business is for the long term.
We look forward to bringing Samai Rum to the world, as we have already positioned Cambodia in the World Rum Map!
Seekers Independent Spirits – Cambodia
Marco Julia Eggert is the Co-Founder of Seekers Independent Spirits and he has a strong background in hospitality. Marco studied economics and has a Master in Hospitality Management from Cornell University.
His family owned a Michelin starred restaurant in Barcelona, Spain and he has worked in restaurants and hotels at a corporate level for most of his career, in addition to consulting for the hospitality industry. He previously was the Managing Director of the popular FCC Hotels and Restaurants in Cambodia.
Why did you decide to start Seekers in Cambodia?
An inextinguishable curiosity and openness to new adventures brought me to Cambodia 7 years ago, when I was offered an opportunity to manage a hotel business out here. We (my family and I) were excited to come back to Asia. My wife’s family had lived in Hong Kong and then Bangkok for over 20 years, and whilst I had never visited Cambodia before our move in 2013, South East Asia was always an inspiration; the richness of the Mekong’s flavours; its cultures, crafts and the energy of a generation of Seekers powering its development.
Both my wife and my background are in hospitality. In Phnom Penh, we privately opened a couple of restaurants. One of these had probably the largest gin collection in Cambodia at the time. This is where our idea for Seekers was hatched. Coming from Barcelona and London, cities renowned for their premium gin, we were always fans of the spirit.
Constantly inspired by the array of ingredients from this part of the world, we were surprised that we couldn’t find a gin that truly celebrated the vibrant flavours of the Mekong.
This is what triggered our decision to launch Seekers and to start distilling these amazing flavours to create distilled spirits that represent the incredible flavours of South East Asia.
What was the business application processes like to register Seekers in Cambodia?
We sought advice from several channels, as we wanted to get the structure right from the beginning. From day one, the vision has been to grow Seekers Independent Spirits internationally and to have the potential to attract investors along the way, so we decided to establish a holding company in Singapore.
The Cambodia business registration was completed in part with the help of licensed advisors and in part by ourselves.
There were some initial question marks and a period of learning, but with the proper professional advice, the process was relatively smooth.
How have you found the process for registering new products in Cambodia & how easy is it?
Registering as a new manufacturer necessitates licenses and approvals from a number of Cambodian Ministries & Government departments. When it comes to new product lines, every product must be tested and approved by the National Laboratory and then you have to process new commercial codes with the Ministry of commerce.
To date, all of this is done face to face, or via emails. Once you get to exportation, the process is more online.
What changes have you seen in Cambodia since you started Seekers Independent Spirits? Is the market supportive?
Definitely supportive. There was a market gap we were hoping to fill, and the response has been overwhelmingly positive from the hospitality outlets, as well as from consumers that purchase our products through the retail and online store partners.
Concerning changes in the Cambodian market, we encouragingly see an increase in the number of, locally owned lounge bars opening recently; with a strong focus on cocktails and an appreciation for premium spirits. The cocktail scene in Cambodia has shifted significantly in the last three years, with more and more establishments looking to create their own point of difference, and therefore, putting great effort into the quality & creative beverage programs. There is a noticeable move towards quality rather than quantity.
It is also worth mentioning the positive impact of the arrival of more international hotel chains, providing training, work opportunities and higher standards of service delivery.
How optimistic are you in your company’s and Cambodia’s growth?
COVID-19 aside, we’re pretty bullish. In Cambodia, the middle class is growing and the younger generations, in particular, are eager to try good, quality cocktails, and to drink spirits other than just whiskey.
Foreign investment is bringing in higher-income individuals, which in turn also helps the premium spirits market.
Our goal is to become the leading Spirit House in South East Asia, by creating a strong foothold in this region, and to export further afield.
Due to COVID, our plans for exporting have been slightly delayed, but we are a few months from starting exports to Vietnam and Thailand, as well as Taiwan, Hong Kong and hopefully Singapore before the year-end. For next year we plan to further expand our reach.
Seeks Spirits Products
What products and services do Seekers Independent Spirits offer?
As a distillery, our core business is in the production of premium spirits and liqueurs. We have won medals from four international competitions, including:
- Gold at Hong Kong Spirits Awards 2018
- Silver medals from San Francisco World Spirits Competition and Singapore World Spirit Competitions in 2019 and 2020
- Bronze at the London International World Spirit Competition in 2019
We are really proud to have been able to present Cambodia’s first premium gins and to be winning medals at the most celebrated international competitions.
Seekers sources the highest quality regional botanicals and ingredients for our spirits portfolio that already includes:
Seekers Mekong Dry Gin: In 2018, we launched our signature Gin. A smooth, vibrant gin that celebrates the wild warmth and rich culture of the Mekong.
Seekers Mekong Gold Gin: Launched in 2019, our signature Mekong Dry Gin matured with wood for a silky-smooth texture and the finest spice notes of cinnamon, coconut and vanilla.
And in time for the Christmas season, we created a ready-to-drink collection: Classic cocktails with a Mekong twist, with a Seekers Pandan Negroni and Seekers Long Pepper Martini in the initial offer.
We are very focused on R&D (Research & Development) and had quite an ambitious product pipeline planned for the next few years. When COVID hit in 2020 we decided to fast track some of our new product releases to help mitigate some of the reduction in sales from the export business we are facing this year.
So, we launched our Seekers Mekong Vodka in June 2020 – Cambodia’s first premium Vodka. It is a potato-style vodka that heroes Cassava root for voluptuous texture; Pandan for its hints of nuts & vanilla; Kampot Mountain spring water for purity & balanced minerality.
In addition to this, we are putting the finishing touches to two liqueurs we’ll be releasing in a couple of months. We are very excited about these. They beautifully represent our sourcing philosophy, which is to distil regional Mekong flavours. Each of the liqueurs combines the finest ingredients sourced from select farmers in Cambodia, Laos, Thailand and Vietnam.
This range of products under the Seekers brand should generate sustainable profitability within Cambodia.
In addition to producing our own spirits, we have also collaborated with a number of prestigious hotels on some great projects, including bespoke pre-batched cocktails Raffles Hotel Cambodia and limited edition batches with personalized labels for Rosewood, Sofitel and the Hyatt Regency.
The most exciting project so far was working with the Raffles Hotel team to develop a signature gin recipe for their properties in Cambodia. We created the Elephant Bar Gin, which comes in three variations – Dry, Mekong Strength and Gold. A wonderful collection of gins, which can now be found at the Raffles Hotels in Cambodia.
We have been at our distillery in Toul Tom Poung for two years now, and offer a host of onsite experiences, including tours and tastings, masterclasses, trade training, & private events etc.,
We are also open daily as a shop and the bar is open at certain times of the month.
What is the future of Seekers Independent Spirits?
We will be moving into a new space very shortly though, as we are outgrowing our current site. We are really excited about our new location, which will be large enough to create a much richer guest experience.
The new distillery will be off National Road 2, just four minutes further down the road from The Factory (in the South of Phnom Penh). It is an open space concept of around 1.000 square meters.
Guests will be able to see our production processes, whilst enjoying a space suitable for different type of events; including a large botanical garden, with a playground for toddlers & teens; somewhere for people to come and hang out at the weekends for BBQ lunches and the odd G&T (Gin and Tonic).
The goal is for it to become a destination, where guests can come and discover more about our brand & products, our commitment to the community and the environment, as well our passion for this region.
How competitive is the local and regional market?
In our first full year of operations (2019), Seekers was the fourth most sold gin in Cambodia, with only three standard priced / pouring gins ahead of us. Being the only local gin (and now vodka) in the country provides a certain advantage, although the product, logistics, branding and sales strategy needs to be good to achieve that in the first year.
We did not expect that, but it has certainly motivated us to work even smarter towards new goals. We hope to continue maintaining this leadership position with our gin and climb our way up with the vodka and the liqueurs in Cambodia.
In Cambodia, we focus a lot on providing a high degree of after-sales services to our trade accounts, which in turn see the value of being able to offer a high-quality local spirit in their menus, rather than classic international premium brands.
There are a handful of other craft distilleries in the region who have joined the journey, especially in Singapore and Vietnam. Having a number of good regional distilleries is very positive for the market, as it should help consumers to focus on consuming local/regional products – Everyone will then have favourites but there is enough room in the market for everyone that does things right.
Finally, what would you say are the main benefits and obstacles to doing business in Cambodia?
Cambodia offers a positive investment environment, and whilst there is a need for greater regulation and greater clarity on some regulatory aspects of the industry, this is to be expected from a fledgeling industry in a relatively frontier market.
Issues that also need addressing are:
- Lack of regulation and control over poorly produced alcohols that can produce serious health problems to the local population.
- Lack of control of counterfeit or fake alcohols. Depending on where you buy alcohol, you might be buying a fake bottle. This is a problem that can be found throughout Asia and needs further prevention efforts from the authorities.
I wish someone will find a vaccine soon, and everyone can move on, with the learnings of this year in mind!
Seekers have also been recently involved in fundraising initiatives in Siem Reap to assist these affected by COVID-19. You can find out more here.
Distillers operating in Cambodia
The hand-crafted, double-distilled, artisan rum uses pure, fresh ingredients to produce Cambodian infused rums. There are infusions including Black Kampot Pepper Rum, Passion Fruit Rum and classic White or Gold Rum. The distillery started offering their Kampot Rum in 2019 for the domestic market.
Georges Rhumerie is a Siem Reap based distiller attached to a French restaurant and they offer a selection of artisan, organic, all-natural rums (13 in total). Their rum is produced using 100% Cambodian organic sugarcane juice.
The family recipe is used by the father and son team in producing the rum and the company also uses eco-friendly measures aiming a limiting our negative impact on the environment.
Georges Rhumerie also allows for customers to select and create their own blend of spices to produces bespoke rums.
Based in Phnom Penh on Bassac Lane, Brass Monkey is a new boutique distiller producing in-house infused gins on location.
Absinthe in Cambodia
Nixie Absinthe is crafted with artisanal, small-batch distillation methods. The product is available at select outlets and is locally made but globally sourced.
Syn Absinthe Distillery
Syn Absinthe Distillery used to be produced on the coast of Cambodia, in Sihanoukville.
Drinking regulations in Cambodia
Currently, Cambodia has very relaxed laws and regulations around the drinking age limits and for advertising alcoholic products.
In fact, there is no age restriction on consuming alcohol in the Kingdom and plans to introduce a national law on alcohol have been discussed for some years.
A 2016 Asia Foundation report on the Cambodian alcohol industry said: “[I]n Cambodia there is little regulation of the alcohol industry including the advertising of alcohol products and very few, if any, measures in place to protect consumers.”
VOA Cambodia reported that “the Asia Foundation recommended that Cambodia introduce restrictions on alcohol advertising across various media, such as television channels, radio and points of sale, and greatly increase public health warnings about alcohol use across these media and at venues where alcohol is sold.”
Cambodia also has very lowest taxes on alcohol products in the region. However, the government had recently increased fines for drunk driving and is looking at more public awareness programs to educate the Cambodian public.
All alcohol producers do advise sensible and responsible drinking.