KOLOA, Kauai — There’s a wood sign on the outskirts of Koloa on Kauai’s south shore that reads simply: “Hawaii’s Oldest Plantation Town.”

The first commercial sugar refinery in the islands opened in Koloa in about 1840 — five years after the plantation went into business. Its remains have been preserved as a historic site a mile or so away and that first mill’s successor, which opened in 1912, still looms above Poipu — the last of the big mills on the island yet to be demolished.

But literally within a stone’s throw of the Koloa town sign, Bob Gunter and his firm, the Koloa Rum Co., are responding to the voices that insist the sugar industry is a cadaver in Hawaii, never to return to life. His view, parsed into three words, is “not so fast.”

For a supposedly dead industry, this one’s vital signs are surprisingly strong.

Koloa Rum is an inspirational story for people who understand that the manufacturing economy of Hawaii — ranging from production by artists to clothing manufacturers — is far more vibrant than many think. Koloa Rum’s origins date to the plantation era, but it was not until about four years ago, when the company started distributing rum distilled in commercial quantities, that the modern incarnation emerged.

Today, it employs 35 people and operates a distillery in Kaleheo. Its product line has expanded steadily, but when the demise of Hawaii’s commercial sugar industry loomed with the imminent closure of the Hawaiian Commercial & Sugar Co. on Maui in 2016, Koloa Rum’s entire access to Hawaiian sugar was put at risk.

Growing Its Own

As a hedge, Gunter purchased 190 tons of HC&S’s last production run — enough to get Koloa Rum through sometime in 2020. But he realized the company would need to get back into sugar cultivation on an industrial scale. So, three years ago, Koloa Rum started farming about eight acres of cane. It can be hard to see since the cane tends to comingle with guinea grass.

A few months ago, Koloa Rum realized its expansion was proceeding at a pace the company never expected and so Gunter decided to purchase 18 acres of former plantation land in Koloa. A new distillery will be constructed, two dilapidated former plantation houses will be transformed into a museum and offices and the total acreage in cane will more than double. Employment will rise from 35 to 50 full-time positions.

There won’t be any visible signs for a couple of years because the permitting process hasn’t begun, but Gunter said there is no substantial barrier to the project coming on line sometime in late 2019 or early 2020.

If all goes according to plan, Koloa Rum’s plantation operation will yield enough five years from now for the company to meets all its own needs and sell boutique Hawaiian sugar to industrial users throughout the state.

“The (economic) headwinds were just too much” for Hawaii sugar to compete on the mass world market, Gunter said as he slogged through the muddy field where the new distillery will be constructed. He was wearing tall rubber boots and lamenting the fact that he’d left his machete at home.

“We really want to preserve agriculture and manufacturing” as key elements of Kauai’s economy, he said.

Gunter is searching for a reliable micro-refining process that will transform the methods the old mills relied on to a system that can compete in a more focused Hawaii-wide marketplace.

“This is more than just a business,” he said.

The Kauai acreage will be farmed organically, pesticide-free and largely without fertilizers. Cane will not be burned in the fields.

Other Sugar Ventures On Oahu

But what Koloa Rum is doing on Kauai is by no means the entirety of a potential renaissance of Hawaii sugar. It will probably never be more than a niche crop, but the reality is that sugar didn’t die in the first place and is showing stronger vital signs than any time in the last 20 or 30 years.

Two other examples of the trend are on Oahu.

Manulele Distillers, which produces Kohana Rum in Kunia, has been growing its own sugar for eight years and currently has 25 acres under cultivation, expanding to 15 more. The premise is slightly different. While Koloa Rum is relying on the type of cane sugar the big plantations produced for decades, Kohana Rum is using, essentially, heirloom varieties.

“What is forgotten is that production of sugar in Hawaii had been going on for 800 years” before the huge scale industry came into being starting in the early 19th century, said Kyle Reutner, spokesperson for Kohana Rum.

The company realized, he said, that “the HC&S model was not for us. We’re going to be a smaller farm. We don’t do it the way it was done in the plantation era.”

He said the company has been self-sufficient for sugar since it started growing its own.

“We’re a completely vertically integrated company,” he said. “We don’t source anything from anyone. It’s all grown here.”

And that’s not all. At the Hawaii Agriculture Research Center in Maunawili, on less than two acres, researchers are working on preserving historic sugar strains and developing ways to bring genetic engineering techniques to bear. It’s research that could result in sugar resuming its role as a biofuel source, said Stephanie Whalen, the executive director.

That’s ironic since — on Kauai, anyway — the island was electrified after dried cane turned out to be an excellent fuel for steam-powered generators. Electricity evolved on Kauai from one plantation town to another. Eventually, the Lihue Plantation Co. was producing enough power that its surplus resulted in formation of the Kauai Electric Co. — today’s Kauai Island Utility Cooperative.

“Some (research) clients continue to be interested in sugar cane as biofuel,” Whalen said. “Economically, it’s still unknown if this is viable.”

But, Whalen said, sugar cane has shown some promise as a source of high value fuels, from gasoline to jet fuel.

“It will depend on the process,” she said, so the question for the research center is: “Can we develop the technology?”

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