When trying to describe the rum market today, the correct question to ask is, ‘Which rum?’
With classic white rum, it’s business as usual, the basic and most popular style of the sugar cane spirit holding its own in the marketplace. In the world of flavored rums, new iterations and combinations continue to arrive, mimicking what’s has been going on for some time in the vodka category and enlivening drinks and drink-making possibilities. Considered either a subset of flavors or a sub-category all its own, when it comes to spiced rum, attention is being paid to a new world of tweaks, especially in terms of higher proof and higher price, with continued brand extensions and introductions expected as the style grows in popularity. Finally, for aged and superpremium rums, long promoted by spirit fans as the next big thing, it’s still a waiting game, mostly.
The results in terms of sales among the leading rum brands were generally positive last year; according to numbers gathered by the Beverage Information Group for 2012, the category overall was up 2.1%. Category leader Bacardi inched up 0.5% to more than 9.5 million cases, while leading spiced rum Captain Morgan grew 1.2% to hit more than 5.5 million cases. Malibu grew 2.1% to 1.78 million cases, fourth place Castillo dropped 4% to 849,000 cases, while Cruzan, now the sixth largest rum brand, grew 7.9% to 782,000 cases. Spiced rums Admiral Nelson (up 10.3% to 800,000 cases and fifth place) and Sailor Jerry (up 10% to 734,000 cases) showed the biggest gains among the top ten rum brands.
Also surging last year: Calico Jack from Beam Global, a mid-priced flavored line that gained more than 13% last year to 340,000 cases. Don Q Rums, from Serralles USA, have also seen impressive sales, growing by about 11% in 2012 to 243,000 cases. Don Q’s line includes its mid-priced Cristal, Gold and Anejo expressions, flavored versions of Lime, Coconut and Mojito, and the ultra-premium-priced Grand Anejo. Don Q also released Caliche last year, a superpremium white rum aged up to four years, resulting in a smooth, velvety character with flavors of citrus and vanilla. Serralles USA also markets BlackBeard, launched in 2011, a 43% abv rum with Caribbean spices vanilla, nutmeg and cinnamon with tropical fruit. Another spiced entry, Kraken, jumped by 50% to 225,000 cases, while creamy RumChata surged to 365,000 cases.
Spice, Flavors Growing
Despite some efforts to premiumize and upgrade the image of rum in the same way as has been successfully achieved with tequila, gin and other spirit categories, it’s been the growth in popularity of spiced and flavored rums that has continued to drive the category and attract the attention of major suppliers for the last few years. Today, the brand news, especially from those big players with deep pockets, continues to be flavor innovation. For example, Pernod-Ricard’s Malibu in the first part of this year released a slew of new line extensions and branded beverages, including the first known rum entries into the so called confectionary flavored spirits niche. Diageo, owner of leading spiced rum Captain Morgan, announced a line extension of its own, this time the limited release Sherry cask-finished Captain Morgan, following last year’s successful launch of Captain Morgan Black, a higher-proof, more molasses flavored style. Meanwhile, Cruzan has recently added Passion Fruit and Key Lime to their 13-item flavor portfolio, and follows up shortly with Cruzan Velvet Cinn, a spiced/cream rum meant for cold weather sipping. Flavors get the attention, but they aren’t all Cruzan and other brands have been developing: this fall, the Beam Global-owned US Virgin Island-produced brand intends to roll out its Distiller’s Collection, with Cruzan Estate Diamond Light Rum and Estate Diamond Dark Rum joining Cruzan Single Barrel in the portfolio. Other recent line extensions not associated with flavors include Mount Gay’s launch of Black Barrel, finished in charred bourbon barrels and made with a higher proportion of double distillates for a balance of flavors that company says includes wood, pepper and spice. Rhum Clément, perhaps the best-known rhum agricole sold in the U.S., recently increased its expressions to include a 6-year-old and a 10-year-old, and soon the company will add a white rum made from a single-variety of sugar cane, and a single cask rum aged in French oak for eight years.
And then there are the newcomers to the category: Shellback white and spiced rums this year entered the expanding spirit portfolio of Gallo; and there’s another celebrity-backed spirit, this one Blue Chair Rum from country singer Kenny Chesney, launched in 32 markets in three expressions: white, coconut and coconut spiced.
Category leader Bacardi is fully committed to the new flavor push, with the new Pineapple Fusion joining last summer’s additions, Wolf Berry and Black Razz, in their flavored rum portfolio. But spiced rum’s increasing importance got the company’s attention some time ago, says Toby Whitmoyer, vp and brand director, rum category, Bacardi USA. ‘We’re the rum category leader, and in the last 20 years spiced as a segment has taken on a bigger and bigger piece to fuel the growth of the segment. Our many trade partners have been looking to us to enter the segment, as the spiced rum category has gotten a lot more intense in the last five years as others entered. We spent a number of years developing the next level, bringing polish and refinement and liquid credentials to spiced rum.’
Whitmoyer describes Bacardi’s spiced entry Oakheart as smokier and less sweet than most spiced rums, ‘more mature,’ as he puts it, and the brand aims for a more sophisticated consumer, one as interested in sipping as mixing. ‘Consumers are looking for brands with authenticity and back stories, and slightly more sophisticated and polished offerings,’ he says.
The new Captain Morgan limited edition Sherry Oak Finish finish is one example of the way spiced rum is stretching into new territory and aiming for more complexity in flavor, with notes of oak, sherry, vanilla, caramel, dark cherry and cocoa with a slight floral undertone, according to the company. An example on a different part of the expanding spiced spectrum is the new Malibu Island Spiced, which adds vanilla and cinnamon to the Malibu coconut base, and offers an added twist ‘ sweetened with Truvia, it arrives at 70 calories per serving, considered the industry’s first low-calorie spiced rum, as well as an entrant into the ‘skinny’ beverage alcohol craze. Ken Reilly, category marketing director of Sailor Jerry for William Grant & Sons, says as consumers discover that spiced rums aren’t one size fits all, they are more often shopping and sampling different brands and extensions, which he thinks will be beneficial for all brands. Additionally, while the industry might segregate spiced rums, consumers in general consider them as simply another type of dark rum, he says, bringing spiced rums into the realm of whiskies and other brown spirits in terms of occasion consumption. For Sailor Jerry, which has identified and targeted sub-cultures for promotions and marketing (including the tattoo, and military and hot rod communities) building associations within those groups while focusing on the higher proof (46% alcohol by volume) and higher price point, has been successful approach year after year.
Promotional Minds
In the midst of the big summer rum selling season, a number of new marketing campaigns are currently in place to spur on sampling. Cruzan’s focusing on inviting rum fans to embrace the spirit of Cruzan, by visiting the island of ‘The Don’t Hurry.’ The campaign is launching with the introduction of an official ‘tourism’ video for The Don’t Hurry, as well as an integrated marketing program that will continue throughout 2013. The campaign includes PR and retail extensions, digital and social media support, local market advertising and a national sampling tour.
Bacardi this spring introduced new marketing campaign, ‘Vivimos,’ in celebration of the brand’s storied origins in Cuba. The new campaign is meant to drive consumer awareness and excitement while reinforcing the brand’s heritage at a time when authenticity and masculinity are key themes among target consumers, according to the company, with a focus on the rum’s founder Don Facundo.
Following the Bacardi 150th anniversary celebration in 2012, ‘Vivimos’ builds on consumer curiosity and the momentum surrounding the brand heritage. The integrated marketing campaign launched on May 20, Cuban Independence Day, with a national rollout that includes cable TV, outdoor placements, experiential, digital activation and on and off-premise programming.
For Malibu, the attention is all those new iterations, as well as a redesigned version of the iconic white bottle. Among Malibu’s recent announcements was the launch of two dessert-flavored rums: Malibu Sundae, combining the brand’s signature coconut with the flavor of chocolate ice cream, and Malibu Swirl, a blend of coconut, strawberries and cream. Confectionary flavors have become over the last two years big players in the flavored spirit field, up by some accounts more than 50% last year.
‘We are excited to be entering the growing confectionary segment,’ said Lisa McCann, brand director for Malibu. Pernod Ricard USA, ‘It is where we expect to see significant growth going forward. Malibu Sundae and Malibu Swirl are set to capitalize on this growth and deliver two entirely new ways to experience the brand.’
Also new: Ready to Drink Malibu cocktails in 200ml cans, and two new selections in its family of 1.75L premixed cocktail pouches. The Malibu Cans (5% abv) combine Malibu with three mixers: Pineapple, Cranberry and Cola in single serve and 4-packs. Joining the Malibu cocktail pouch family are Malibu Blue Hawaiian and Malibu Pina Colada Light, joining Tropical Sea Breeze, Rum Punch, Caribbean Cosmo Light and Tropical Mojito.
Older and Richer
While commercial focus has lingered on the growth of flavored and spiced, serious rums are still being marketed. Whitmoyer notes the current on-premise trend toward brown spirits is revealing itself across all dark rums. ‘We’re number one in dark rum as well, and the dark side of our port is doing quite nicely ‘ we’re seeing solid growth across the board on all.’ Those brands ‘ including brands that do well in Mexico and also in strong Mexican-American U.S. markets like Bacardi Solera and Añejo, and Bacardi 8 and Reserva Limitada ‘ are generating new interest across the board, he says.
Gary Ross, director of rums and cordials at Beam Global, says aged rums offer potential for growth for brands like Cruzan, partially the basis for the expansion of the Distiller’s Collection. ‘There have been some brands that have made some good headway at the higher end, and as Cruzan has always been positioned as a quality brand, we feel we have a reputation for aged rums and that there is definitely an opportunity there.’
Katherine Lewis, brand manager for Appleton rums, points out that the opportunities for better rums these days lie in tapping in to the aged brown spirit consumer, who appreciates aged tequila, single malt Scotch and bourbon. ‘Such consumers drink aged, premium brands not just for the taste but for it says about them, [and we] will speak to them with a message that emphasizes liquid quality and premium lifestyle.’ She notes there’s a handicap in the off-premise knowledge of rums, where training has not kept pace with that of other brown spirits. ‘It’s difficult to truly educate the way you can on premise via training. You can train retail staff but most retail environments are not staffed with personally equipped to hand-sell. Securing acclaim is critical so it can be shared at the point-of-sale with the consumer. Sampling also is an option, however, it’s tricky to do tastefully so more thought is required than if you are sampling a rum mixed as a Mojito or Rum and Coke,’ she says.
Of course, not all premium and up rums are dark, but even those with a lighter hue have found it difficult to expand the U.S. palate much. Moet Hennessey’s 10 Cane is a prime example. The brand recently shifted production from Trinidad to Barbados, amid claims by previous producer Angostura that it declined to renew its contract because the premium rum was not generating sufficient business. Barbados’s Foursquare Rum Distillery will now handle the distilling, blending and bottling for 10 Cane going forward. Introduced as white rum in 2005, 10 Cane was reformulated in 2011 with a more golden color and a price point lowered 15% to 25%. More traditional rums, full-flavored rums are still working the narrow but growing niche. Venezulean rum Santa Teresa’s solera method superpremium entry is positioned as a sipping rum with cocktail potential, according to commercial director Henrique Vollmer. Later this year the brand launching a ‘Sip a Nightcap’ cocktail competition for bartenders, spotlighting Santa Teresa ‘1796’ as a contemplative and relaxing late-night sipper and a base spirit for nightcap-style cocktails. According to Alex Mejido, vice president of Blend Wine & Spirits, US agent for Venezuela’s Diplomatico rum, rums that can compete in the general brown spirits arena have a golden opportunity today, and like other brands, Diplomatico is counting on a recently-launched bartender competition to boost its image here. ‘I see a significant rise in the bourbon and brown spirits in general. The consumer is more intrigued that ever with age of a product, for rum and smaller artisan brands. It is the right time for us.’
