On November 22, 2024, Nepal Distilleries Pvt Ltd (NDPL), the producer behind the iconic Khukri Rum, launched a new product – the Khukri Cask Series. This limited-edition rum marks a pivotal moment in the company's history as it enters the luxury spirits market, aiming to elevate Nepali craftsmanship on to the global stage. The Cask Series, which consists of only 5,200 uniquely numbered bottles, represents a bold and refined step forward for NDPL as it moves into the high-end international export market. The launch of the Khukri Cask Series represents a major milestone for Nepal Distilleries, positioning the company as a global player in the luxury spirits market.

The Essence of the Cask Series

The Khukri Cask Series is not just a rum; it is a meticulously crafted spirit aged in specialty casks. These casks are key to the rum’s exceptional character, imparting natural flavors. The aging process relies on various types of casks, charred and uncharred, and types of wood, even wood such as oak or Shorea Robusta. Each cask creates a distinct flavour profile, which enhances the rum's complexity and smoothness, resulting in a drink that exudes a refined smoky, spicy and sweet notes.

The Smoked Finish rum in this series is aged in Shorea Robusta casks that are charred to intensify its distinctive smoky character. As Shuvash Lamichhane, General Manager of NDPL, explains, this versatility in flavor profile allows consumers to enjoy the rum in multiple ways—whether neat, with water, or on the rocks, each method showcasing the depth of the spirit’s flavor.

A New Chapter for Nepal Distilleries

With a new management team bringing in fresh ideas and a renewed vision, the Cask Series is part of an ongoing project aimed at producing unique, limited-edition rum for many years to come. Lamichhane notes that each edition in the series will experiment with different cask types and aging techniques, ensuring that the Cask Series continues to evolve and offer new experiences for discerning consumers.

The first edition of the series, with 5,200 bottles produced, includes a smoky rum aged in charred Shorea Robusta casks. The rum is priced at Rs 10,000 per bottle—marking an unprecedented price point for a Nepali Rum brand. A total of 1,600 bottles of this exclusive release will be available in Nepal, while the remaining will be distributed to global markets.

The next edition of the Cask Series is expected to be launched next year with a different Cask Finish. Lamichhane says this approach will ensure that each release continues to offer something unique to consumers.

A Legacy of Excellence

Founded in 1959, Nepal Distilleries has been a stalwart in the Nepali spirits industry for over six decades. Its flagship product, Khukri XXX Rum, is the oldest and most established brand in the domestic rum market, holding a significant market share. NDPL’s long history and strong distribution network have supported its dominance in Nepal, with Khukri XXX accounting for a considerable portion of rum sales in the country.

NDPL's success has been built on a foundation of heritage and innovation. From using traditional 19th-century methods to embracing cutting-edge techniques in luxury spirits production, the company has set new standards for excellence in the industry. The recent launch of the Cask Series is a testament to this ongoing commitment to innovation, positioning NDPL as a serious contender in the global premium spirits market.

A Bold Step Into Luxury Spirits

The global spirits market is seeing a rapid shift toward luxury, aged, and sipping rums—an evolution that NDPL has embraced with the Khukri Cask Series. Once viewed as a “working-class drink”, rum is now gaining recognition as a premium product, with global trends indicating a growing appreciation for aged rums. In many ways, rum is challenging the dominance of aged whiskey in the luxury segment, and NDPL is poised to capitalise on this trend.

With the Khukri Cask Series, NDPL is not only expanding its offerings but also contributing to the rising demand for premium rum. Lamichhane points out, “Aged and sipping rums are gaining global popularity as premium spirits.” The company’s strategic shift into the luxury rum market aligns with the global trend of premiumisation, where high-quality, aged spirits are becoming more desirable.

Rising Demand for Premium Spirits in Nepal

There is a growing demand for premium spirits in Nepal, and NDPL’s decision to enter the luxury rum market comes at a time when Nepali consumers are looking for alternatives to premium whiskey and single malts. With the Khukri Cask series, NDPL is pioneering the luxury rum segment in Nepal, filling a gap in the market for high-end spirits that can compete with international brands.

Lamichhane notes that tasting sessions for the Cask Series have been met with overwhelming enthusiasm. More than 70% of tasters placed orders for the limited-edition rum, and written feedback from these sessions is being used to refine future editions. The feedback reflects the desire for premium spirits in Nepal, and NDPL is responding by producing a product that appeals to upscale whiskey consumers while staying true to its heritage.

Innovating Within Tradition

While NDPL is expanding into new product lines, including whiskey and vodka, it remains committed to preserving the traditional methods that have defined its success. Blending remains a manual process, ensuring that each product meets the company’s rigorous quality standards. Lamichhane emphasises that innovation at NDPL does not come at the cost of tradition, noting that the blending and spice infusion processes that have defined Khukri XXX Rum and Khukri Spiced Rum remain unchanged.

The company’s plant has undergone upgrades to improve quality, to maintain consistency, capacity and efficiency, while still respecting traditional production methods. Packaging has been automated, but the careful manual blending process ensures that each bottle maintains the unique flavor profile that has made Khukri Rum a household name in Nepal.

While expanding the rum portfolio, the company has also ventured into whiskey and vodka. NDPL's diversification efforts are in progress, but the main focus of the company remains on perfecting products within each category. Beyond rum, NDPL’s portfolio includes Nude Vodka and Aristocrat Whiskey. Likewise, the company has speciality rums like Khukri Spice, Khukri White and Coronation.

Challenges and Opportunities

The domestic liquor market has faced considerable challenges in the past two years due to the economic slowdown. The decline in patronage of hotels and restaurants has adversely impacted liquor sales, prompting NDPL to rethink its approach. "The entire liquor industry has struggled because of the economic downturn," explained Lamichhane. "We have seen an over 20% CAGR degrowth over the past two years”.

New regulations introduced two years ago allowed rum to be aged in smaller, specialised casks, opening up fresh opportunities for luxury rum production. However, controlling the aging process remains a challenge due to factors like temperature and humidity, which can influence the rum’s flavor profile. Despite these obstacles, NDPL’s unwavering commitment to quality ensures that only the best barrels are chosen for production.

The company is also navigating the aftereffects of the COVID-19 pandemic, which delayed export growth and disrupted production schedules. Nevertheless, Lamichhane remains optimistic, now that NDPL exports to over 16 countries with ample room for growth in international markets especially in countries with a large Nepali diaspora.

Khukri Rum has long been established in markets like Japan, South Korea, parts of Europe, the US and Middle East. NDPL is looking to widen its footprint and is working on multiple fronts to achieve this objective and place Nepal in the global alcohol industry.

By blending traditional methods with modern innovation, NDPL is elevating Nepali rum to new heights and ensuring that its legacy as a symbol of Nepali craftsmanship endures. As Lamichhane sums it up, “With the Cask Series, we’ve preserved the Khukri essence while appealing to new consumers with a higher price point and a distinctive offering.”

(This report was originally published in   January 2025 issue   of New Business Age Magazine.)