All for Rum and Rum for All

Mojitos. Caipirinhas. Mai Tais. Cachacas. Rum is a spirit as popular in cocktails as it is on the shelf, conjuring the tropics, beaches, summer and tiki bars regardless of the season. “With rum, traditionally, there is a lot more play factor,” says Josh Hayes, senior brand manager, Malibu. “Rum tends to come from a more fun place.” And that smell you get when opening a bottle of rum, that tropical scent, transports you to the islands.

But there’s no fooling around when it comes to this spirit, the second largest behind vodka.

“Rum, in general, has a very bright future. Bartenders love it as it is so versatile — so mixable — in cocktails. It also has a lot more personality and character than many other spirits categories,” say Kevin Oglesby, brand director-Bacardi Rums, and Kelly Adams, brand director for Flavored Rums.

It has such a bright future that the category is buzzing on all fronts. Puerto Rico’s Destilería Serralles, which produces the premium rum brand Don Q, is increasing its rum production in the next three years. Bacardi Limited has begun an environmental initiative that includes recycling the water used to produce its rum. Don Q itself is undergoing a packaging redesign. Malibu is experimenting with different packaging formats and sponsoring a summer concert tour.

“According to a report from Distilled Spirits Council released in February, rum has increased nationally in both volume and revenue each year since 2010,” explains Tom Herbst, vice president of marketing, Rums, for Diageo North America. “A key contributor to this growth is because distillers — including us — have experimented with innovative spices and flavors.”

But the focus isn’t solely on the category’s biggest brands. That growth stems from the smaller labels, too. “Smaller players, like us, will likely continue to see significant growth as we bring new excitement and high-quality offerings to the category,” says Brendan Lynch, senior director of Rum & Cordials, for Beam Suntory.

With the category growing as a whole, it’s still far from reaching an end point. “Rum has a lot of room to grow,” Hayes says. It’s far from reaching a saturation level with consumers.

 

Spiced Success

“The rum category continues to offer a high-quality spirit–now including new innovations and flavor extensions,” Herbst says. “In the last three years alone, there have been nearly 60 new entrants in the Spiced Rum category — a competitive trend we don’t foresee changing anytime in the near future.”

Diageo’s answer: honoring Captain Morgan with the brand’s latest expression. Released in May, Captain Morgan 1671 is a limited-edition commemorative blended spiced rum, whose name is intended to honor the historic Panamanian battle where Captain Henry Morgan raided Fort Lorenzo and ultimately captured it. “Captain Morgan 1671 Spiced Rum is our way of paying homage to our brand’s namesake and the date he lost his treasured flagship,” Herbst says.

That commemoration even appears in the product’s packaging: a jug designed in 17th century styling. At 70 proof, the 750 ml bottle retails for $19.99.

Admiral Nelson Rum has only been part of the Heaven Hill Distilleries’ family since 2011, but that’s all the more reason its packaging received a makeover last year. “We have seen an opportunity to elevate the brand, make it a little bit more premium in feel for the consumer,” says Hannah Venhoff, brand manager for Heaven Hill’s rums. The new bold, clean style makes it distinguishable on the shelf and matches its recognition as the second largest spiced rum and one of the top 10 rums in terms of overall case sales.

That nautical styling appeals to spiced rum consumers as it echoes throughout the segment. “Calico Jack is very nautical-focused with an edgy pirate, which resonates strongly among spiced rum consumers,” Lynch says.

Positioned as Beam Suntory’s primary player among spiced rum, the brand has unveiled a new look. “We also recently updated our Calico Jack packaging to not only play up the nautical element of the brand, but also elevate the brand’s overall look on shelf,” Lynch says.

While Admiral Nelson is a major value player in the spiced rum segment, Heaven Hill’s other rum, Blackheart, appeals to a more premium-minded crowd. “We have continuously seen incredible growth with this brand year over year,” Venhoff says. “We were up about 19% nationally in 2013 and we continue to see that volume growing.”

 

New Venture

Captain Morgan made a name for itself as a leader among spiced rums. “We introduced a limited-edition Sherry Oak Finish Spiced Rum last year, our first ever White Rum earlier this year and now a limited edition 1671 Commemorative Blend Spiced Rum,” Herbst says. “Consumers have responded extremely well to these variants, which makes us very optimistic about the future.”

In February, the brand released its first white rum, Captain Morgan White Rum that is 80 proof and the 750 ml bottle retails for $15.99. It is also available in 50 ml, 200 ml, a 375 ml flask, 1 liter and 1.75 liters. “Captain Morgan White Rum — Diageo’s largest innovation to date — launched in January and can be purchased throughout the U.S. Our marketing efforts for Captain Morgan White Rum began in February,” Herbst explains. Diageo has supported the launch with a print ad in Sports Illustrated’s 50th Anniversary Swimsuit Edition as well as television and online advertisements, point of sale materials, and digital extensions.

 

Flavor Factor

Category leader Bacardi is no stranger to flavored rums. The company revolutionized the category nearly 20 years ago when it launched the first flavored rum, Bacardi Limon. The newest addition to its flavored rum portfolio, Mango Fusion, was introduced in April as a one-of-a-kind flavor that fuses mango with orange. “It offers a light mango flavor with a recognizable hint of orange that creates an unforgettable taste experience,” said Kelly Adams, brand director for Flavored Rums.

The release has been supported by national digital media as well as sampling and promotion in the on- and off-premise venues. Available in 50 ml, 200 ml, 375 ml, 750 ml, 1 liter and 1.75 liter sizes, the 750 ml bottle retails for $14.99.

With 22 expressions, including 13 flavors, already under its label, Beam’s Cruzan Rum managed to add yet another innovation. “We’re focusing our message on our authenticity as a high-quality rum rather than trying to position ourselves as a vodka or bourbon — a trend we’ve noticed,” Lynch says.

In March the brand announced the release of Cruzan Peach Rum, which is made with tropical rainwater and high-quality molasses, and has a suggested retail price of $14.99 (per 750 ml bottle). “The release of Cruzan Peach complements our line up of flavored rums perfectly, offering consumers a well-rounded array of 14 authentic flavors to suit any mood, occasion or palate,” Lynch says.

With a flavor that shouts out to summer regardless of the actual season, the new flavor sticks to Cruzan’s “Don’t Hurry” lifestyle, the brand’s digital campaign first introduced in 2013. “This year, we’re bringing the island mindset off the island closer to where fans live,” Lynch explains. “As part of the campaign we’ve created a series of videos to show consumers the importance of bringing ‘The Don’t Hurry’ into their daily lives. These videos, which will run online throughout 2014, showcase the importance of slowing down and celebrating everyday moments.”

 

Celebrity Connections

Fifteen years after bringing his Cabo Wabo line to the tequila category, musician Sammy Hagar tried his hand at the rum category. He brought his “act local” philosophy to what became Sammy’s Beach Bar Rum, a premium silver rum made from two-year-old Maui-grown sugar cane that’s only filtered once and distilled once. At 80 proof, the 750 ml bottle has a suggested retail price of $21.99.

“We’re on a real roll right now — we’re doing an awful lot,” says Stephen Kauffman, president of Sammy’s Beach Bar Rum. The brand has been on the market for a few years, except now it’s on the verge of going national, in part thanks to a new partnership between the brand and Imperial Brands. In February, Imperial Brands, which is the U.S. importer and marketer of Sobieski Vodka, announced that they would be taking on the sales responsibility in the U.S. and Canada for the premium silver rum. Kauffman says that includes dealing with the distributors, marketing, advertising, public relations and point-of-sale.

Up next for the brand is a broader rollout of its macadamia nut-infused rum, Sammy’s Beach Bar Rum Red Head, named after Hagar’s fans who call themselves the Red Heads. The 70-proof rum embodies these super fans down to its red hue, a color it gets using fruits and vegetables. “It’s really the only macadamia nut product out there,” Kauffman says. “It’s almost like a liqueur more than a rum when you taste it.”

Kauffman expects retailers and on-premise locations across the country to have Red Head available by July. Its suggested retail price is $24.99.

Sammy Hagar isn’t the only celebrity — and musician — with ties to the rum category. Multi-platinum singer-songwriter Kenny Chesney created Blue Chair Bay Rum, a company that’s been touted as one of the fastest growing companies among wine and spirits. The brand only launched last year, but it’s already collecting accolades for its 40 percent ABV white rum. In addition to the brand’s white, coconut and coconut spiced flavors, banana joined the mix in June 2014, and like the coconut and coconut spiced iterations it contains 26.5% ABV.

Blue Chair Bay Rum is available nationwide, and it is using the spring and summer of 2014 to hit 25 U.S. cities on its “Nowhere to Be But Here Tour.”

“This tour is part ‘thank you’ to our great fans who made Blue Chair Bay Rum the fastest growing new company launch in the history of wine and spirits, and part “welcome’ to those ready to discover what made it so,” said Mark Montgomery, ceo of Fishbowl Sprits, parent company of Blue Chair Bay Rum.

Meanwhile, Malibu is using a summer tour as a sampling opportunity. After partnering with Maroon 5 on their concert tour last summer, the brand launched its “Best Summer Ever” campaign that coincides with a presenting sponsorship of OneRepublic’s Native summer tour. Hayes explains that the sponsorship allows the brand to really engage with its consumers. “We’re more connected to consumers than we ever have been,” Hayes says.

 

Eye on Innovation

Malibu is one brand that is always innovating. “We have our innovation plan for the next four years already figured out,” Hayes explains. Last year saw the introduction eight different products to its portfolio, including two dessert-flavored expressions, Malibu Sundae and Malibu Swirl. Malibu kicked off 2014 with its latest innovation, Malibu Rum Sparkler, which combines Malibu rum and coconut water. Infused with bubbles and available in coconut and peach flavors, Malibu Rum Sparkler is 22 proof and available in 750 ml bottles with a suggested retail price of $16.99. Its packaging is also a first for the brand: a bottle that looks like a champagne bottle, corked and wrapped in colorful foil.

Like last summer where the new products were supported by a digital and social media marketing plan and retail activation, Malibu Rum Sparkler’s launch has been supported by digital and social activations as well as a through a series of off-premise sampling events with retailers.

The rum category has its own Real McCoy: a rum that pays homage to Prohibition-era rum runner Bill McCoy. The Real McCoy brand follows Bill McCoy’s dedication to delivering the finest rum, and it’s produced with no artificial flavors, colors or perfumes added. First launching with a five-year aged expression in January 2013, The Real McCoy released a three-year aged and 12-year aged in November 2013 to award-winning success. The product can be found on the East Coast in Connecticut, Florida, Massachusetts, New Jersey, upstate New York and Rhode Island. The bottle recently underwent a new look to its cap. As the sipping rum ages more, the price goes up with the three-year retailing for $19.99, the five-year at $28.99, and the 12-year at $44.99.

 

New Partnerships

In June, Flor de Caña rum announced a partnership with distiller and distributor William Grant & Sons. Through this partnership, William Grant & Sons becomes the exclusive distributor of these Nicaraguan slow-aged single-estate rums in the U.S. “We are hearing more and more talk in the trade about the anticipated growth in aged rums — from bartenders and retailers,” said Jonathan Yusen, president and managing director, William Grant & Sons USA. “According to IWSR, premium rums are expected to grow at twice the rate of the overall spirits category, so there is certainly upside to the category. Of course, we’d like to think that Flor de Caña will be driving a good portion of that growth, encouraging people to fall in love once again with this wonderful category.”

Flor de Caña’s portfolio consists of Extra Seco 4, Anejo Oro 4, 5 Anejo Clasico, Gran Reserva 7, Centenario 12, Centenario 18 and Centenario 25. Bottles range in price from roughly $18 to $50 and will be available in the states by the end of 2014. To celebrate its global growth, Flor de Caña has new packaging that celebrates the rum’s heritage and craftsmanship.

William Grant & Sons also distills and distributes Sailor Jerry Spiced rum, a top-selling spiced rum, which has shown a steady increase in case sales over the past several years.

 

Push to Premium

“Increasingly, we’re seeing a demand for premiumization within the category, which has proven to be a growth opportunity for Bacardi,” says Kevin Oglesby, brand director-Bacardi Rums. Bacardi’s answer to premiumization was the November 2013 introduction of the Facundo Rum Collection, a set of four sipping rums. This limited release is sourced from the Bacardi Family’s Private Reserves, and the rums are handcrafted and aged in the tropics for up to 23 years, creating some of the most extraordinary rums ever publicly shared.

“The response from both consumers and critics alike has been remarkable; in fact, Facundo Exquisito just received a 2014 Double Gold medal for Best Extra-Aged Rum in the prestigious San Francisco World Spirits Competition,” Oglesby says.

The four expressions range in price from $45 to $250 and come in bottles modeled in the Art Deco style. Neo is a white rum aged up to eight years, Eximo is a blend of medium- to full-bodied rums aged at least 10 years, Exquisto is a blend of medium- to high-bodied rums aged seven to 23 years, and Paraiso is a blend of rums aged up to 23 years and then finished in French XO casks. The collection is so rare it’s initial release only included select retailers and high-end restaurants in the Miami area and New York City.

Although the price tag may not be as expensive, the Cruzan Distiller’s Collection was created with a similar premise in mind: superpremium, blended aged rums. Unveiled last September, the Collection includes Cruzan Estate Diamond Dark Rum, Cruzan Estate Diamond Light Rum, and Cruzan Single Barrel Rum. All three products are available nationwide with the Estate Diamond labels retailing for $19.99 per 750 ml bottle and the Single Barrel retailing for $29.99 per 750 ml bottle.

For its part, Patron released Pyrat XO Reserve Rum a few years ago as a superpremium sipping rum, part of a high-end niche that has expanded its footprint during the past few years.

 

Unusual Rum Suspects

The Caribbean might be the obvious rum producing part of the world. But it’s not the only spot where the U.S. draws from for its imported rums.

Tanduay, a company founded in the Philippines in 1854 and currently the world’s second largest rum producer, has two expressions that hit the U.S. a year ago. Tanduay Silver and Tanduay Gold are produced by Tanduay Distillers, Inc., and can be found in Connecticut and Florida. As of June, Athens Distributors has expanded distribution to Tennessee, while Southern Wine and Spirits will be bringing Tanduay Asian Rum to Illinois in July. Both the Silver and Gold expressions retail for $19.99 (750 ml bottles) and have garnered awards at the 2014 Rum Renaissance and San Francisco World Spirits Competition.

Screech Rum honors a tradition that dates back to the old seafaring days when Newfoundland sent ships full of salt cod to Jamaica and received cask-aged rum in return. In the present day, Screech Rum is distilled and barrel-aged in Jamaica, then bottled by Rock Spirits in Newfoundland, creating an 80 proof spirit that has scored high in spirits competitions.

Rock Spirits recently partnered with M.S. Walker, making the company the exclusive U.S. distributor for Screech Rum’s products. The new partnership brings an updated label design to Screech’s bottles that celebrates its nautical heritage and two new flavors. Joining Screech Rum, an 80 proof product that retails in the 750 ml size for $18.99, are Screech Honey Rum, an oak-aged Jamaican rum, and Screech Spiced Rum, a blend of four- to eight-year aged Demerara Rum and natural spices, and imported from Guyana. Both new flavors are 70 proof and retail for $19.99 in the 750 ml size.

 

Diversification

In 2012, E&J Gallo entered the rum category with Shellback Caribbean Rum, and The Wine Group launched FlipFlop rum. Palm Bay International has Dos Maderas Rum, which includes the triple cask-aged Dos Maderas PX.

Last summer, Terlato Wine Group forayed into spirits with its Artisan Spirits portfolio first launching a vodka and gin. In November, Terlato announced the addition of Don Pancho Origenes to its portfolio, a luxury rum produced by legendary Cuban master rum distiller Francisco “Don Pancho” Fernandez at his Las Cabras Distillery in Panama. Don Pancho has already rolled into select markets with the limited-quantity 30-year retailing for $425 and the 18-year retailing for $90. Terlato expects an 8-year-old rum to eventually follow. “This is a connoisseur’s rum, meant to be enjoyed as a fine spirit,” said William A. Terlato, Terlato Wines’ CEO. “We know that luxury whisky aficionados are exploring other brown spirits — and Don Pancho superpremium rums will soon be on their radar.”

Trinchero Family Estates is just the latest wine company to introduce a rum. Its spirits division, TNS Brands, which launched in 2012, added Sugar Island Rum, the spirits division’s first in-house product innovation, in September 2013. Sugar Island Rum is available in spiced (92 proof) and coconut (42 proof) expressions and both 750 ml bottles retail for $18.99.

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