Sweet Deal: A Giant Sugaring Operation Banks on Maple 

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• Hannah Palmer Egan
• Workers monitor and test the syrup at Sweet Tree's Island Pond plant

A young man stood expectantly in front of an evaporator, his face illuminated by the orange glow coming from the steel contraption that boils maple sap down into syrup. After checking and rechecking to see if the syrup was ready, he opened a valve, releasing a rush of sweet-smelling, golden liquid into a container.

"Oh, that's fancy!" he said with a wide grin that made his rosy cheeks look like apples.

Another dude ran up, in Carhartts and a plaid shirt. "Is it ready? Oh, ho ho! It is ready?"

Rosy Cheeks just smiled.

Their boss, Joe Russo, yelled from across the room: "Is it ready?"

"It's ready!" hollered Rosy Cheeks.

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• Hannah Palmer Egan
• Sweet Tree's Island Pond plant

"OK," said Russo, approaching the evaporator. He plunged a dipper into the cooling syrup, swirled the pale amber liquid in the pan and brought it up to his face. "You don't even have to taste it," he said, breathing deeply. "You can smell it." Satisfied, he handed the dipper to the guy in the plaid shirt, who leaned in for a taste.

"Oh, yeah!" he said, smacking his lips after a sip.

The same giddiness overtakes Vermont sugar makers every spring as the first sap turns to syrup. But this particular scene played out not in some backyard sugar shack but in a factory, where the human interaction was accompanied by the rhythmic clanking of machinery and the occasional hiss of steam exiting the labyrinthine system of plumbing and piping.

The evaporator alone cost a cool quarter million dollars — and it's one of four inside the former Ethan Allen furniture plant in Island Pond. Once a symbol of local enterprise, that plant now serves as the base of operations for Connecticut-based Sweet Tree Holdings 1, LLC, which bought the building last April for about $700,000. Sweet Tree is one of many assets held by Wood Creek Capital Management, an investment arm of Massachusetts Mutual Life Insurance Company.

In the last two years, Sweet Tree has spent about $5.5 million to purchase 7,000 acres of remote maple forest in the northeast corner of Vermont's Northeast Kingdom. In the past several months, workers installed 100,000 taps on a parcel in Warren's Gore. When the spring sap run ends, the company plans to add another 150,000 in Avery's Gore, according to Wood Creek managing director Bob Saul, who is in charge of the Sweet Tree operation.

That would make it the largest single maple producer in the U.S. — bigger than the current record holder, Green Mountain Mainlines in Fletcher, which drew sap from 130,000 taps last year, according to the annual trade magazine The Official United States Maple Syrup Almanac. Vermont produces more maple syrup than any other U.S. state — a quantity valued at $49 million in 2013.

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• Hannah Palmer Egan
• Sweet Tree's Island Pond plant

Facts are harder to come by about what Sweet Tree plans to do with the syrup it harvests. No one — not Saul, or maple operation manager Russo, or Sweet Tree chief financial officer Michael Argyelan — will get specific, except to say the syrup won't be sold locally, or even necessarily in liquid form. All three men said they intend to convert it into branded, value-added products, which will be sold worldwide in high-end markets. Some — perhaps all — of the manufacturing will take place on-site at the Island Pond plant.

"It's actually an aphrodisiac," Argyelan said jokingly of his plans for the raw maple. When pressed, the CFO, who is a trained chemist, said he's having products tested in South Carolina. A recent Associated Press story suggested the company could be brewing a fructose-free maple alternative to southern sweet tea.

"Probably in the next three or four months we'll know what we're doing," Argyelan said. "Right now, everything's just going into drums until we decide how to use it."

Not surprisingly, this mega maple operation is the talk of the town — or, more accurately, of Essex County.

"I hear they're putting in a million taps," said a patron at Chez Pidgeon, a friendly roadside watering hole on Route 114 in Norton.

"They say they want to be the biggest maple producer in the world," added another.

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• Hannah Palmer Egan
• Joe Russo

Would that spell gloom or boom for Vermont's indigenous maple producers, which have traditionally been mom-and-pop operations?

"We were just talking about it, actually," said April Lemay, owner of April's Maple in Canaan. Fifteen miles northeast of the Sweet Tree sugar bush, she taps about 15,000 trees on land her family has sugared for generations. "Our hope is that they'll educate a consumer market that wouldn't otherwise know about maple products."

In other words, she hopes that Sweet Tree will grow the market, not flood the existing one. "We're not built to compete with somebody like that," Lemay said. "The market for us is very different. It's much more about local and the people passing through, who buy into a small brand and buy into the business, not into the conglomerate."

Matt Gordon, executive director of the Vermont Maple Sugar Makers Association, said other producers share Lemay's concerns. "I think there's trepidation in the industry as a whole: Are we making too much syrup? We've seen growth really take off in the last few years, but history is full of examples of production rapidly growing and then things falling out."

Modern Maple

The Sweet Tree maple property stretches for about three miles along Route 114 north of Island Pond. From the road, passersby can see sap lines, strung taut between the trees, and a few shipping containers, which serve as pump houses. Aside from these, there's little indication of the operation's industrial size.

Here and there, small roads lead into the maple bush, which is scattered with yellow birch and softwood trees. In mid-March, the woods were still insulated with several feet of snow, but at waist level, a web of blue and white tubing connected the maples, fanning out in every direction as far as the eye could see. Against the snow, the trees and an ashen sky, the blue sap lines looked electric.

Standing in the middle of it is surreal, but other than scale, this operation is not unusual: Vermont maple is growing — and evolving — at an unprecedented pace.

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• Hannah Palmer Egan
• Sweet Tree's sugarbush in Warren's Gore

According to Henry Marckres, chief of consumer protection and maple specialist at the Vermont Agency of Agriculture, Food & Markets, the number of maple taps throughout the state has grown by 400 percent in a single decade. In 2004, Marckres said, "We estimated there were a million taps in Vermont. By 2014 there were almost 4.27 million taps. There's going to be over five million this year."

And the taps are more productive than ever before. "Back in 2004, the goal was to get a quart of syrup per tap," said Marckres. "Now the goal is to get a half gallon per tap. So you've got five times the number of taps, and twice the production per tap."

The difference is technology: This is not your grandpappy's horse-drawn sap-bucket operation.

Today's taps are smaller than the old ones, but the plastic lines that replaced the old-school buckets now connect to vacuum-powered pumps that pull the juice from the tree.

"Hardly anybody collects sap with buckets now," said Tim Wilmot, extension maple specialist at the University of Vermont's Proctor Maple Research Center. "You just cannot get a decent amount of sap without the vacuum."

Wilmot said most large operations also pre-process the sap in reverse-osmosis machines, which remove up to 75 percent of the water. The concentrated liquid takes less time and fuel to evaporate. With the increased efficiency, sugar makers can tap bigger tracts of land.

Every drop of the world's maple syrup supply comes from hardwoods in a narrow swath of North America, extending from the Great Lakes to the Canadian Maritimes. But, according to Gordon, only a tiny fraction of the trees in those areas have been tapped. In Vermont, it's roughly 5 percent, "and that's a high percentage compared to New York or Michigan or elsewhere," he said. "So the growth could be phenomenal, but we're not sure if we can grow the market in proportion ... so we don't create an oversupply."

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• Hannah Palmer Egan
• Joe Russo in the Sweet Tree boiler room

So far, consumer demand has grown apace with increasing supply, and the price of the product has remained relatively stable. Syrup currently sells for around $25 per gallon wholesale and retails for a lucrative $50. Québec and the maple-producing New England states recently agreed to standardize the quality-control process, which forced Vermont to adopt a wordier system of "grading" syrup. "Fancy" is now "Grade A Golden Color with Delicate Taste." Grade B is "Grade A Dark with Robust Taste."

Economic logic suggests that if there were a way to increase demand for syrup, the price would hold steady or even rise. But historically, the state of Vermont has had limited success in marketing liquid maple to cultures that don't eat pancakes or French toast. And while Vermont families may consume maple by the gallon, the average per capita annual consumption in the United States hovers around a measly three ounces — roughly a quarter of a cup.

Tapping into new overseas markets and rolling out value-added products that position maple as a healthy, natural alternative to refined sweeteners could be two ways to grow international demand.

Another factor that could drive up the price of syrup is climate change, which is pushing the maple band farther north. Maple producers in Vermont are already seeing the effects: On average, sugaring now begins eight days earlier and ends 11 days sooner than it did 40 years ago. All it takes is a freak warm spell in March or April to bring the sugaring season to an abrupt halt.

From a U.S. investor's point of view, the coldest, highest locations in Vermont's northeast corner may look like some of the last sweet spots to maximize its potential. "It's sugar-maple carnage down here," Saul said of southern New England, where the freeze-thaw cycle can cause the trees to crack, he explained, exposing them to blights and insect hazards. That hasn't been an issue in frigid Essex County, where the winters remain reliably cold.

Forest Assets

Sweet Tree is not alone in its quest to make money from maple. But it's not every day that an out-of-state company snaps up large tracts of Vermont land, hires dozens of people and taps 100,000 trees in its first season. "It certainly seems like it's a first — for Vermont and probably for maple syrup," said Gordon.

It's also the first from-scratch maple operation to commodify syrup not as an end in itself, but as part of an investment portfolio. Wood Creek Capital, and ultimately MassMutual, bank on long-term, predictable returns.

Sweet Tree is betting as much on Vermont's value as a lifestyle brand as it is on the maple syrup itself, Saul said. "We chose Vermont because it's pre-branded," he said. "Thank you very much, state of Vermont, for having the best brand of any state."

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• Hannah Palmer Egan
• Unfiltered syrup from the March 17 boil

And, in an increasingly food-obsessed world, the asset manager sees maple as a resource on the rise. "It's becoming an ingredient in more and more products," Saul said. "It's gaining more of a purchase on the public and food-consuming public's mental state ... Every cooking show has some maple component."

Sweet-toothed consumers can now buy everything from bourbon to energy goo made with the stuff. The ski-racing Cochran family recently started selling a version of the latter called UnTapped from their Slopeside Syrup store in Richmond — and at Burlington's Outdoor Gear Exchange. Last week, the UK-based Guardian ran a story about the product, headlined "Is maple syrup the new athletic superfuel?"

Maple is also gaining ground in previously unexplored markets. "You have this global awakening going on," Saul said. "There's a lot of syrup being sold in Japan, in Saudi Arabia, in Europe." Gordon confirmed anecdotal evidence from local maple exporters of growing interest in Japan and China. "Also, in Oceania: Australia and New Zealand. Europe isn't growing quite as fast," he said.

Vermont is well equipped to supply that international demand, and many of its most productive maple forests are located in the northern counties. Woodlands cover most of the Northeast Kingdom, and that's particularly true in Essex County, which is home to around 6,000 full-time residents — fewer than 10 people per square mile.

Here, land is often traded among timber companies in thousand-acre plots, and much of it is conserved in perpetuity under the Forest Legacy Program. Such lands are privately owned but subject to oversight from the Department of Forests, Parks and Recreation. They can be used for forestry, agriculture or recreation but never developed.

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• Hannah Palmer Egan
• Sweet Tree workers in front of the evaporator

Sweet Tree's properties in Warren's and Avery's Gores are "legacy lands," previously used for timber harvest. To put the land into "current use" as a sugar bush — and enjoy the significant tax savings that come with keeping the land undeveloped — Sweet Tree must create a long-term forest management plan that complies with the forestry department's guidelines.

With changes sweeping the maple industry, Vermont forestry commissioner Michael Snyder said he's had to reconsider how maple forests are managed. With input from the maple community, he recently modernized the "current use" framework for sugar bushes monitored by the forestry department to encourage long-term forest viability. Clearing out everything but the maple trees, for example, is not permitted, and understory flora and debris must be left to decompose.

The new guidelines, Snyder hopes, will help preserve maple as a Vermont product. "We have a shared interest in the health of the land and the sustainability of this really awesome product, which is a hallmark of Vermont. We need to take care of the forests so they can continue to provide sap and continue to provide forest."

"Even if all you care about is sap," Snyder added, "it's in your interest to protect forest health. We want people to find new ways to make money from the land, but we want to make sure we get it right."

So far, Snyder said, he's optimistic that the Sweet Tree properties are in good hands. "I think they're paying attention and doing a good job. I haven't done a lot of inspecting out there personally, but my sense of it is, it's off to a good start."

Director Saul has been managing long-term woodland investments since the 1990s and lives on 250 acres of farmland in western Massachusetts. Maple operation manager Russo runs his own sugar bush in Belvidere — 50,000 taps strong — and has been boiling maple for nearly five decades. The two have hired a couple of dozen experienced local woodsmen to handle the tapping operation.

Snyder conceded that maintaining open public recreational access, which is required by the legacy easement, could be a struggle. "I'm kind of curious how people who want to travel across the land, hiking, hunting, skiing — whatever it is — how are they going to experience this?" he said, referring to the network of blue tap lines that snakes through the Sweet Tree sugar bush. Even with his extensive maple and forestry background, Snyder said those lines still take him aback. "When I see all this plastic, this wall of tubing along 114, it takes my breath away. Then I think, Actually, this is good."

"This is very near and dear to me," the commissioner said — referring to the working landscape as a whole. "These trees provide the scenic backdrop to the community — the natural infrastructure for recreation and clean air and water. But nobody pays for these things; timber and sap are the only things that pay their way. These other things are wonderful, and they have real value to Vermont, but they're not bringing landowners any money."

Native Economy

When Ethan Allen Global left Island Pond in 2001, it took more than 120 jobs with it. The Connecticut-based furniture chain still has a manufacturing plant in nearby Orleans — it's named after a Green Mountain hero, after all.

Plans to put a wood-pellet plant in the old factory fell through years ago, but when Wood Creek bought the property in 2014, it inherited a ready stream of qualified workers — "people with exceptional work ethic, who are anxious to work hard and who want to work outdoors," as Saul put it. As an asset manager, he specializes in agriculture and forest-based investments, which often require physical labor performed outdoors. Finding folks who are willing to do that kind of work can be a challenge elsewhere in the country.

That's not the case in Island Pond. At the moment, Sweet Tree employs 24 full-time workers. Saul said he plans to hire up to 20 more this summer, once tree tapping starts up again. The company ran help-wanted ads in the local papers, but Saul said most of his employees came in through word of mouth — and people are still stopping by the former Ethan Allen plant looking for work.

In a conversation in February, Brighton town administrator Joel Cope said that despite lingering unease about industrial maple in the community, it may be a good match for Island Pond, a town he describes as "hard up for business."

"We're not in line for clean electronics factories or anything like that," said Cope. "This fits. We have wood."

Now that the operation's up and running, some skeptics seem to be embracing the economic boost. "I've gotta be honest: I'm not against it; I'm just concerned," said one local, sipping a whiskey with water at Chez Pidgeon last Tuesday. "But it has brought a lot of employment to people in this area that have been starving. Since Ethan Allen — I mean, it's not totally gone, but there's not much left around here anymore."

Even small producer Lemay said she welcomes the big company. "It brings jobs to the area, which is wonderful. I know a lot of the guys that work there. For someone who's part of a small community — and trying to create jobs ... it's good to see that type of economic development."

People are definitely watching Sweet Tree — and not just in investment circles. "It's early in the game," said Snyder, noting that the company has barely even started its first sap run. The commissioner may not have fully inspected the operation, but it's definitely on his radar. "I spend a lot of my time up there," he said, "so I have an eye on it."

Will Big Maple be a safer bet than a fickle furniture brand that evokes a Vermont patriot who was born in Connecticut? Future sugaring seasons will tell. Until nature turns the tables, ag investors like Sweet Tree are going with the flow.