Maple syrup inc.: Vermont’s maple syrup tradition goes high tech, high finance

In the past decade, the Vermont maple syrup industry has boomed, bringing outside investors, private equity firms, and a host of new challenges and opportunities to the Green Mountain State.

On the rugged western slopes of Vermont’s Mt. Mansfield, a web of plastic tubing connects some 71,000 tree taps to one of the frontiers of Vermont’s rapidly changing maple syrup industry.

For weeks now, sap has been flowing through these tubes into 10 tanks, each holding 7,000 gallons, at the Runamok Maple sugarhouse, a block of a building that looks more like a small factory than the shedlike shacks of New England lore. Multimillion-dollar equipment – reverse osmosis machines, a steam-powered evaporator, ­iPhone-connected monitoring systems – hums along next to inventory ready to be shipped around the world. Workers package up sleek bottles holding cardamom-infused and pecan wood-smoked maple syrup – two of about a dozen flavors that Runamok’s owners Eric and Laura Sorkin have developed in the two years since they ditched bulk syrup production and started this artisanal, direct-to-consumer business.

The Sorkins have been upending conventions here since they started sugaring a decade ago, a few years after they quit jobs in Washington, D.C., to farm in Vermont. Back then they jolted locals with the size of their operation, deciding to jump into sugaring with 28,000 taps, an outrageously large number at the time.

“The most charitable way to put it is that we were a curiosity,” Mr. Sorkin says with a laugh. “There were a lot of people who were not expecting it to work out.”

But since then, rather than playing the role of “flatlanders who had more money than sense,” as Eric puts it, he and his wife have emerged as key players in what has become the big business of maple syrup. Armed with a sleek internet presence, contemporary packaging, and a product tasty enough to land on Oprah Winfrey’s “favorite things” list, the Sorkins have helped dramatically change what was until about 20 years ago an agricultural practice fundamentally unchanged since the 1800s. 

And they are not alone. In the past decade, the Vermont maple syrup industry has boomed, bringing outside investors, private equity firms, and a host of new challenges and opportunities to the Green Mountain State. Many longtime farmers who once sugared as a way to make some cash in winter now have year-round operations with soaring syrup output, but also increasing capital expenses and debt. Technology and weather are changing, allowing the short maple sugar season to start earlier and end later. Meanwhile, the long shadow of Quebec – the world’s dominant maple syrup producer, whose prices and quantities are set by an OPEC-like federation – is ever present. 

The story of the Sorkins, and of their neighbors in the snow-draped mountains of central and northern Vermont, however, is not just about maple syrup, one of the world’s last wild harvested foods and a cultural icon of the Northeast. Rather, it is in many ways the tale of global agriculture writ small. For here, beyond the reach of cellphone reception or tarred roads, the one-time mom-and-pop sugaring operations are increasingly beholden to international exchange rates, global commodity trading, world food trends, other countries’ regulations, and a noticeably changing climate. 

What happens over the next few years here, say those involved in maple sugaring, matters not only in the relatively small latitudinal swath of North America where maple trees grow. Rather, it gives insight into the challenges and opportunities facing farmers around the world.

***

The Sorkins moved to Vermont to start a vegetable garden. Eric had been working as a lawyer and Laura as an environmental activist in Washington. But she was also a trained chef and was eager to get out of the office and grow food. Eric, as he puts it, was eager to follow Laura wherever she went. So they ended up here, in the town of Cambridge (pop. 3,600), with a mountainside plot and an old farmhouse with holes in the roof. They cleared land and built a greenhouse, and for about eight years they grew vegetables. But over time they tired of the operations side of the business and started looking for something new. Soon, they turned their attention to the trees around them.

Maple syrup is one of the world’s more fickle agricultural products. It is the golden brown remains of sugar maple sap after water is removed, the mixture is heated (but not too fast, or else the sap might burn), and the sugary remains are forced through a filter. These trees grow primarily in the “sugar belt,” which includes much of the Northeastern United States, some of the Upper Midwest, and southern Canada. 

Maple sap “flows” during those times of the year when the weather creeps above freezing during the day and dips below it at night. During this season, explains Joshua Rapp, a forest ecologist at Harvard Forest, a research area managed by Harvard University, the vessels within the tree’s trunk that carry water from the ground remain full – there are no leaves to take the water or transpire it to the atmosphere. At night, when the temperature dips beneath 32 degrees F., that water flows from these internal pipes into adjacent, chamber-like air pockets and freezes. This creates more space within the vessels, which in turn creates a vacuum effect, sucking up more water from the ground. In the morning, when that frozen water in the internal chambers thaws, it flows back into the already-full vessels, pushing what’s there back toward the ground. 

Maple producers intercept this downward-flowing maple sap. To do this, they drill holes into the tree’s trunk – a process that is still done by hand – and insert a collection device. “If you put a hole in the tree the water comes out of that hole,” Mr. Rapp says. “The water that’s falling back down the tree was frozen the night before.”

For generations, this falling sap was diverted into a spout inserted into the tap hole, which led to a metal bucket. The process depended on gravity. More recently, though, producers have turned to tubing and attached vacuum systems, which pull the sap out of the tree more quickly. 

Although tubing reduces the hassle of collecting and emptying thousands of buckets, it also introduces its own challenges. A pinprick-sized hole somewhere within the vast web of plastic can disrupt an entire vacuum system. Maple producers have been known to spend days trudging through snow-blanketed forests, looking for the spot where a tube may have been damaged by a moose, a downed tree limb, or an errant cross-country skier. “It’s a ludicrous way of making food,” Eric says.

When the Sorkins first mentioned their plan to start tapping the thousands of maple trees they had on their property, most longtime Vermonters cautioned them to go slowly. They should start with a few hundred taps, perhaps. Maybe a thousand. But after crunching numbers, the Sorkins decided to go with 28,000 – which overnight would make them the largest producer in the state. The locals took bets on how soon they would go out of business. 

At least, Eric recalls, it was easy to find a builder for the sugar shack. It was 2008, the height of the financial crisis. They broke ground in September and started with their large sugaring operation in January of the next year. It worked. 

During the financial crisis, oil prices had spiked, which in turn sent the Canadian dollar to one of its strongest showings against the US dollar in decades. Because the price of bulk syrup is largely tied to prices set by producers in Quebec, which still supplies 70 percent of the world’s maple syrup, that meant Americans were getting more per gallon for their syrup than they had in years. At a time when world markets were tanking, maple syrup was booming.

This, says University of Vermont economist Arthur Woolf, caught the attention of investors looking for anywhere they might make a profit. Outsiders, including some private equity firms, began buying up sugar shacks and woodlands. 

“There’s a lot of money that’s pouring into maple in Vermont,” Mr. Woolf says. “Twenty years ago, maybe even 10 years ago, this was something dairy farmers did. Things were slow in the winter so they’d tap some trees and they’d make some extra money.... Nowadays it is a full-time thing, with people buying thousands of acres of land, putting up tens of thousands of taps.”

In 2015, for instance, Sweet Tree Holdings, part of the portfolio of Connecticut-based Wood Creek Capital Management, a hedge fund firm, bought the former Ethan Allen furniture factory in the town of Island Pond, Vt. Sweet Tree installed four massive steam boilers at the plant, tapped 200,000 sugar maple trees, and promised to bore holes in 550,000 more, according to The Maple News and other publications – a move that quickly made it the largest maple syrup processor in the world.

But the growth does not just come from outsiders. “There’s not so much a shift as there is an addition,” says Matt Gordon, executive director of the Vermont Maple Sugar Makers’ Association. “It’s a lot of the same people.... There are still a great many sugarmakers in Vermont who are multi-generational; their families have been sugaring since the time of Ethan Allen.”

These farmers, too, Mr. Gordon and others say, are looking bigger – investing in new equipment and buying or leasing more land. This is one reason there hasn’t been much acrimony between old maple families and newcomers. Everyone is going big, there is enough land to go around, and more companies with big operations just mean more jobs for locals with experience in the woods.

By 2015, the number of taps in Vermont had increased to around 4.55 million from
2 million in the early 2000s, according to the US Department of Agriculture. In 2017 it was 5.41 million. That meant that Vermont was producing in 2017 nearly 2 million gallons of syrup – up from 460,000 gallons in 2000, according to the New England Agricultural Statistics Services.

The Sorkins’ 28,000 taps, which stunned people a decade ago, “would be completely unremarkable today,” Gordon says.

***

This worries Dave Folino. For 40 years he has worked in the forests on the Lake Champlain side of the Green Mountains, not far from the ski resorts of Mad River Glen and Sugarbush. He still has the same sugar shack, although he has built onto it, bit by bit, as his operation grew from a hobby with a few dozen trees to the 15,000 or so taps he and his wife, Sue, have today.

Mr. Folino’s Hillsboro Sugarworks is unusual in that it sells directly to consumers. The vast majority of sugarmakers in Vermont are in a commodities market – they grade their syrup, put it into drums, and then bring the product to one of the region’s few large packers, which combine the syrup and resell it to retailers or food processors. These firms then incorporate it into everything from salad dressings to maple candy. 

As the maple syrup industry skyrocketed, Folino noticed that many of his fellow sugarmakers seemed to be adopting the same strategy as the state’s dairy farmers – producing more syrup when the bulk price is high, because the return is so good, but then also producing more when the price drops to make up for the lower income per unit. This has become even easier to do with the advent of maple-producing technology – both the tubing and vacuum systems, which let producers get more sap from each tap, but also reverse osmosis, a process that removes most of the water from sap before it is heated. This dramatically reduces the time and fuel it takes to boil sap into syrup.

Last year, Folino wrote an article for the trade publication The Maple News, warning the industry not to follow the path of the dairy farmers. “Each side of the cycle drives increased milk production, and every round of low and high prices pushes farmers toward bigger farms with larger herds and supposedly greater economies of scale, but more debt,” he wrote. “Recently I’ve begun to worry that maple producers may be falling into the same trap.” 

The article got attention throughout the maple belt. “I’m known for it now,” he says. “I’ll go to a meeting and they’ll say, ‘Don’t let Dave in! He’ll just tell us don’t add cows.’ ”

Folino says that he is trying to start a movement. And while he gives a short laugh when he says this, he is also totally serious. He’d love to get other maple producers to focus on marketing themselves directly to consumers, rather than relying on a bulk market. He’d also like syrupmakers to start talking about how and whether to restrict yields. He says he knows this last point isn’t going to get much traction here. 

“We like to think of ourselves as big free market people,” he says. “But really, we’re freeloading off Quebec.”

***

Indeed, Quebec is the elephant in the sugar shack of Vermont maple sugaring. There, the Federation of Quebec Maple Syrup Producers regulates, with the backing of the Quebec government, the production and sale of all maple syrup in the province. 

That means that most of Quebec’s 13,500 maple producers must sell their product directly to the federation, which then resells it. The federation sets quotas for how much a farm is allowed to produce any given year (there are exceptions for very small producers), and also negotiates the price of syrup with a council of buyers. Because of the dominance of the Quebec maple industry – in 2016 the province produced more than 11 million gallons of syrup – the federation’s decisions impact producers everywhere.

The federation also maintains a well-guarded “Global Strategic Maple Syrup Reserve,” with hundreds of thousands of gallons, to counter any market fluctuations in maple syrup pricing, much like the US maintains a strategic petroleum reserve (except that a barrel of maple syrup is worth about 16 times as much as a barrel of crude, selling at just over $1,000 to oil’s approximately $65). 

In 2012, this Canadian maple reserve became the focus of one of the world’s more brazen agricultural heists: the theft of some 3,000 tons of syrup, valued around $13 million. Authorities later arrested 26 people in connection with the caper.

Although there have been Quebec producers who have chafed under what they see as the federation’s strong-arm tactics, such as using law enforcement and harsh fines to ensure producers are complying with quotas, overall the system has benefited most maple sugarmakers, including those in Vermont, says Woolf, the economist.

“The losers in all of this are the consumers,” Woolf says. “If there was a normal market situation, the price would be a lot lower than it is. If the federation disappeared, the Vermont market would decrease; Quebec’s would increase.” 

Folino agrees. “We are kind of free riders,” he says. “We are benefiting from the restraint and expense of the federation. If they let syrup flood the market, it would collapse.”

Rather than classic supply and demand, then, foreign exchange rates with Canada have some of the strongest effects on US maple syrup prices. And this, says Luiz Amaral, global manager for global forest watch commodities at the World Resources Institute, is characteristic for all sorts of agricultural sectors. Currency changes in London, for instance, affect the price of basic raw materials that in turn impact a coffee grower in Nicaragua. 

“This much more connected world affects the risks and opportunities farmers have,” Mr. Amaral says. “Their job isn’t just producing and producing more effectively. I often say the most important plot for agricultural producers measures three by three yards – it’s their office.”

***

This year the sap at Runamok and elsewhere in Vermont started flowing in earnest in early February. Nearly 8,000 gallons an hour coursed through the spaghetti-
like tubing, into the massive sterile holding tanks, and then into the reverse osmosis machinery that begins to remove the water. A decade ago, this wouldn’t have happened until March.

“The spring season is moving earlier and earlier,” says Tim Perkins, director of the University of Vermont Proctor Maple Research Center.

Because of new sugaring technology, such as the tubing and vacuum systems, this climactic shift hasn’t caused much hardship, Mr. Perkins and others say.

Still, scientists are working to understand what sort of impacts changing weather might have on maple forests. Ecologist Rapp at Harvard Forest, for instance, is part of the Acer Climate and Socio-
Ecological Research Network, a collaboration of researchers exploring everything from the chemical composition of sap to the way producers are responding to climate change. They have already found that the maple sugar range is shifting northward – a slow-moving trend that nevertheless will impact future generations of sugarers. 

“Our sites in Virginia we expect to be in dire straits,” Rapp says.

The researcher has also found that the average temperature in March not only indicates the peak of the maple syrup season but the overall amount of sap collected. In other words, the most sap is collected during a season when the average March temperature is around 32 degrees F., regardless of whether the season starts early or late.

“It was surprising to me,” he says.

Rapp and his colleagues have also discovered a correlation between the temperature in July and the sugar content of sap collected in the spring. A hotter July means sap with a lower sugar content.

On the ground, some sugarers, like Folino, are noticing other impacts of climate change. There has been an increase in erratic, violent weather: wind storms that have decimated sugarbushes and torrential rains that have caused mudslides through forests. 

“There are already huge effects,” he says.

***

The most common worry among sugarmakers, though, remains the amount of syrup flooding the market, which puts downward pressure on prices. This is one reason that producers like the Sorkins are looking for new ways to differentiate themselves. Last year, they worked out a deal to buy the maple candy operations of Bascom Maple Farms, one of the largest maple syrup wholesalers in the US.

The Sorkins are also managing the logistics of moving Runamok into a bigger space. Recently, they purchased a 55,000-square-foot factory in the nearby town of Franklin that once produced tiles for the game Scrabble. “We hope that accommodates some growth,” Eric says. “We’ve spilled out of this place.”

In the meantime, he and Laura and other colleagues continue to brainstorm the next best flavor. They already have perfected their Makrut Lime-Leaf Infused Maple Syrup (“out of this world over coconut ice cream,” he says) and Ginger Root Infused Maple Syrup. Wasabi syrup was a disaster, but they found what they believe is the perfect amount of heat with their Merquén Infused Maple Syrup, flavored with spices from Chile.

“Maple,” he says, tasting one of their recent creations. “It’s an incredible product.”