The Spice Trade

Flavored and spiced rums drive business by promising the beach in a bottle.

Sun, sand and surf — lazy summer days and easy-drinking rum cocktails continue to attract a thirsty, young LDA crowd. Spiced and flavored rums are an easy entry into spirits, say proponents; they’re affordable, eminently mixable, and the spirit’s beachy vibe is approachable and non-pretentious.

Rum claims a considerable portion of the trendy flavored spirits market, shared with vodka and now whiskey. The major players are reinforcing that claim with new spiced and flavored rum introductions supported by astute marketing and promotions.

Sizing Up the Market

Right now it seems that spiced and flavored variants are driving the overall rums category in terms of growth. The major players in this sub-segment are positive about rum’s market opportunities.

“One of the biggest trends in rum is growth in the flavored category,” says Brian Mequet, vice president of marketing at Pernod Ricard, whose portfolio includes Malibu (the best-selling coconut rum).

“Spiced Rum will continue to be a consumption driver as it is a barrel-aged, flavored brown spirit utilized in a variety of cocktails,” says Daniel Kleinman, vice president of rum for Diageo North America. The company’s portfolio includes Captain Morgan, the leader in the spiced rum segment.

“Although rum consumption has been relatively flat over the past year, it continues to be the second-largest spirit category, so the overall outlook is quite positive for brands both large and small,” notes Brendan Lynch, senior director of Rum & Cordials at Beam Suntory. The company’s Cruzan brand includes tropical flavored rums, as well as aged and straight rums. “Flavored rums continue to drive the category,” he adds.

“The standard rum offering may be static, but there is real energy in spiced rum,” says Josh Hafer, communications manager at Heaven Hill Distilleries, Inc. The company’s brands include Admiral Nelson, at about 830,000 cases, and Blackheart, at 75,000 cases and growing after just four years in the market. “We have made a big play in the spiced rum category the last couple of years, and have seen a tremendous amount of success there.”

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Spiced Rum Brands

Retailers report their best-selling rums are spiced or flavored. “Our most popular rum is Captain Morgan Spiced Rum,” affirms Alex Vaughn, liquor associate at Liquor Mart in Boulder, Colorado; that’s followed by Bacardi and Admiral Nelson.

“Rum is selling well; most of the business is still Bacardi and Captain Morgan,” says Jim Guzay, a manager at Minotti Wine & Spirits, with five stores in the Cleveland, Ohio area; the retailer shelves all the spiced and flavored rums together, separate from the straight and aged variants.

“After you get past the Captain Morgan, Admiral Nelson, Sailor Jerry, the Bacardi flavors like Limon,
Peach and Mango, some of the newer flavors sell well,” comments Michael Berkoff, president and CEO of BevMax International, a Connecticut-based group of nine retail stores that
advertise together.

“Rum sales pick up significantly in the summer,” notes Rick Smith, manager of Rum River Wine & Spirits in Ramsey, Minnesota. But, he adds, “Captain Morgan sells well year-round.”

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Leading Brands, Spiced Rum

Rum Runners

Why the interest in the spiced/flavored segment? A number of factors are fueling interest in rum: affordability, an appeal to a key demographic and transitioning from other categories.

“Spiced rum is an affordable luxury,” Hafer says, noting Admiral Nelson’s $12 price tag and Blackheart in the $16 range. “Overall, rum is reasonably priced,” echoes retailer Guzay.

It’s the affordability that wards off any pretentiousness on the part of the consumer when they pick up a bottle of spiced or flavored rum.

“Rum is a drink that appeals to everyone and is free of much of the snobbery or exclusivity that oftentimes is associated with other spirit categories,” notes Kleinman at Diageo. Spiced Rum, he adds, is a recruitment-driving and broadly appealing spirit similar to flavored whiskey.

“Rum is among the most inviting, unpretentious categories in spirits,” confirms Josh Hayes, brand manager for Sailor Jerry.

“The Caribbean and that imagery is one of rum’s greatest strengths, and what differentiates it from the other spirits categories,” says Mequet at Malibu. “Rum is seen as fun and approachable.”

Some consumers are transitioning to spiced and flavored rums from other flavored categories. Rum, say proponents, has the advantage of a strong personality to support those
flavor variations.

“It appears the large blocks of consumers that are leaving the flavored vodka category are shifting to other flavored spirits where the base spirit is not hidden as it is with vodka,” surmises David Farmer, president of Fishbowl Spirits, makers of Blue Chair Bay Rum.  “Flavored whiskies and flavored rums seem to be in the perfect place to capture anyone making the transition.”

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Flavored Rum Brands

Percolating Flavors

Many of the major players have launched new flavors or variants this year. There have also been some innovations in packaging.

New for Bacardi is Bacardi Tangerine Fusion. “Bacardi Flavored Rums are always pushing limits and developing new flavor profiles to meet the changing needs of our consumer,” says Arvind Krishnan, vice president and brand managing director for the rum category. This summer, Bacardi Limón is celebrating its 20th anniversary, with the Turn Up Your Summer series, in conjunction with Bacardi Limónade and iHeartRadio.

Diageo introduced its newest line of flavors—Captain Morgan Pineapple, Coconut and Grapefruit. “Obviously consumers’ palates vary, and our goal is to continue to provide a diversity of options,” says Kleinman. This spring, Blue Chair Bay Rum launched two new flavors–Vanilla Rum and Banana Rum Cream. And in April, Cruzan launched its newest flavor, Blueberry Lemonade. That is the 15th flavored rum for the prolific producer.

Sailor Jerry is sticking to spiced and only spiced. “Unlike most everyone else in the rum category, we’ve not played the ‘flavor game’ by launching fruit flavors, RTDs and some pretty unconventional flavors,” Hayes says. The company did slim down its package with lighter-weight glass to help reduce its carbon footprint.

“Premium variants is an area where we see energy,” Hafer says. That’s the strategy behind Admiral Nelson’s Black Patch Premium Black Spiced Rum. Launched this June, the rum distinguishes itself with a higher proof (94) and the liquid has been filtered through charred white American oak bourbon barrels, which gives it a darker color and robust oaky flavor.

Malibu has been busy with both flavor introductions and new format packaging. “Our traditional flavors are doing well; however, now we are tapping into the confectionary trend,” Mequet says. Malibu’s new flavors are Peaches n’ Cream and Pineapple Upside-Down Cake.

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Leading Brands, Flavored Rum

Beach Blanket Bingo

The romance of rum is laced with nautical tales, palm trees and sandy beaches. Many rum producers take full advantage of these associations in their packaging, promotions and marketing.

“Everyone everywhere has a summer time and there is no better spirit of choice to embrace everything that comes with summer than rum,” Hayes says. The brand references renowned tattooist Norman “Sailor Jerry” Collins with his iconic hula girl on the label. The brand’s 2014 “Outside The Lines” campaign continues this year on TV and online through various partners and social media channels.

“Rum is grounded in its Caribbean roots and when you are drinking rum you are there on your beach vacation,” Hafer says. The Admiral Nelson brand, of course, references naval lore, while the Blackheart label depicts a female pirate with the tagline, “Seductress in a bottle.”  Off-premise, Admiral Nelson plays up its affordability with in-store merchandising, shelf positioning and case stacking. Black Patch builds on that in-store merchandising and opportunities on the shelf. “Those do well in-store and don’t have a lot of external consumer-directed marketing,” he adds.

“Malibu’s image and positioning are about summer, and we’ve been very single-minded about that,” Mequet says. “Malibu delivers iconic summer experiences.” Promotions include the Best Summer Ever program and Malibu Rum Beach House promotion activating all over the country. “Those are great sampling vehicles,” he adds.

In 2015, Blue Chair Bay hit the road with Kenny Chesney and his ‘Big Revival’ tour. As the “Official Spirit of No Shoes Nation” and The Big Revival Tour, Blue Chair Bay will be on the road in full-force, hosting the Blue Chair Bay Tailgate Experience pouring specialty cocktails. In addition, the brand is participating in several major events such as Live on the Green (Nashville), Tales of the Cocktail (New Orleans) and Rock the South (Alabama).

The Future for Flavors

“I think spiced rums are well-positioned in the market and continue to be relevant to consumers,” says Mequet at Pernod Ricard. “Where Malibu sits in the rum space, we are in a really good spot,” he adds.

“Trends go in cycles,” says Farmer of Blue Chair Bay
Rum, philosophically.  “American whiskey is enjoying a renaissance and flavors are playing a big part in that. Tequila upgraded its image and reached for the super-premiums.  Now it’s rum’s time to take center stage.  If the quality is in the bottle, especially for flavored rums, they can scoop up some market share.” BD

Thomas Henry Strenk is a Brooklyn-based freelance writer with over 20 years experience covering the beverage and restaurant industries. In his small apartment-turned-alchemist-den, he homebrews beer kombucha, and concocts his own bitters and infusions.

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