Rum Rules

To those of you on the front lines, selling or serving distilled spirits, it comes as no surprise to learn that rum is one of the hottest categories in the industry. Indeed, according to the new Adams Liquor Handbook 2004, rum gained 5.1% in 2003, to more than 19.5 million 9-liter cases nationwide. It is now the second-largest spirits category, comprising 12.3% of all spirits sold in the U.S., trailing only the vodka behemoth (at a 26.2% share of the spirits industry). The category performed even better in the control states, gaining 6.5% in 2003, to 4.17 million mixed cases.


Why is rum shooting up the charts? One likely explanation is that it is a dynamic and diverse spirit with a “fun in the sun” image. Rums are made in exotic places, graced with brilliant hues, rich aromas and captivating flavors. Its approachable taste profile means that there’s no learning curve necessary to enjoy rum. It is a spirit that adapts well to barrel aging and is produced in an intriguing array of styles and types. Rum is also relatively inexpensive, another advantage it enjoys over other premium spirits.


Appleton Estate is featuring this new co-pack.


But the shared attributes that put rum on the map are its mixability and universally popular flavor. “Rum can be used in any cocktail that calls for either whiskey or vodka,” contended Chuck Shive, brand manager for Appleton Estate Jamaica Rum. “Premium rums have a taste and aroma that lifts them above any of the other light liquors when it comes to drink making.”


With the resurgence of the cocktail and strengthening sales of spirits on-premise, the category is a natural beneficiary. “Rum has always been skewed especially strongly toward younger legal age drinkers and the on-premise environment,” observed Reid Massie, marketing manager for Heaven Hill’s Whaler’s Rum. “Traditional on-premise consumers, empowered with more disposable income and knowledge as they mature, are now buying rum at retail outlets as well, further driving overall category sales.”


FLAVOR DRIVES CATEGORY

Undoubtedly the primary driving force behind the category’s extraordinary growth is the popular appeal of flavored rums. Where once there was but a handful of flavored rums, now there are dozens. It’s clear that the rum-craving public has taken to them in a big way. Today, flavored rums account for over 30% of the category’s sales, growing an astonishing 40% over the past 12 months, according to ACNielsen, which tracks sales in supermarkets.


Malibu increased sales by 10.4% in 2003,
breaking the 1 million case mark for the first time.


Ilene Grimes, brand manager for Malibu Caribbean Rum, said that the explosion of flavored rums and vodkas make it perfectly evident that consumers want more variety in their spirits. “Flavored rums will keep the category highly competitive with other spirits by offering consumers the flavor options they desire.”


“The proliferation of flavored rums is also having the positive effect of bringing more attention and vitality to the entire category,” stated Tom Valdes, executive vice president of Todhunter International, importers of Cruzan Rum. “Bartenders are now featuring flavored rums in increasingly more cocktails, which surpass in every respect the tried-and-true rum drinks of the past. You now see bars and restaurants promoting Mango Mojitos, Pineapple Martinis, Banana Cosmopolitans and flavored rum Mimosas. They’re adding excitement to the market.”


“While consumers do bounce around trying new and different drinks, they are consistent in their expectations — they want cocktails that taste great,” observed Paul Francis, brand manager of Bacardi’s flavored rum portfolio. “Flavored rums deliver on this proposition. They offer a viable alternative to vodkas and flavored vodkas. They are drawing more consumers into the category, which in turn is causing our traditional rum business to grow in sales.”


EXPANDING PREMIUM PORTFOLIOS

This flavor explosion has caused most premium brands to expand their range of rums, particularly category leader Bacardi. Following the successful release of Bacardi O and Limon, the company recently expanded their portfolio with the introduction of Bacardi Razz (raspberry), Bacardi Vanila (vanilla) and Bacardi Coco (coconut). Each of the 70 proof rums are made from naturally flavored essences. Their recent product releases include Bacardi Ciclon, a blend of age-old rums infused with tequila and natural lime flavors.

Bacardi’s year-old flavor lineup has played a part in the brand’s 4.4% growth in 2003 to 8.14 million 9-liter cases.


The Bacardi family of flavors has been well received. Their combined impact added 4.4% to the brand’s already sizeable volume in 2003, which stands at more than 8.1 million cases nationwide.


Launched 20 years ago, Malibu Caribbean Rum continues to be the U.S.’s leading brand of coconut-flavored rum, increasing in case sales by 10.6% in 2003. Malibu recently extended it franchise with the introduction of Malibu Mango and Malibu Pineapple Caribbean Rums. Both are made on a base of light- and full-bodied rums that are blended together prior to the addition of natural fruit flavorings.


Grimes noted that the highly recognizable Malibu packaging presents a tremendous competitive advantage when releasing brand extensions. “We tried to stay true to the Malibu bottle while at the same time creating two totally distinct products. The packaging of the new Malibu flavors incorporates the same recognizable logo and bottle shape, only we made the packaging more vibrant and colorful.”


Cruzan recently launched this Mango Rum,
and has had notable success with its portfolio of tropical flavors.


One of the pioneers of the flavored rum category is Cruzan. With the additions of Cruzan Raspberry and Cruzan Mango to the line, the ever-expanding portfolio of flavor now has eight entries. Made in St. Croix in the U.S. Virgin Islands, the 55-proof rums are triple-distilled and aged in oak bourbon barrels between two and three years. After aging, they are filtered to remove any color and natural flavorings are added to create the finished product.


The company is also successfully marketing Cruzan Rum Cream. The light-bodied, 30-proof liqueur uses Irish cream, caramel and vanilla, as well as rum from St. Croix. The Cruzan line of rums is experiencing notable success, increasing sales by 11.8% nationwide in 2003.


TRYING TO STAND OUT

In 2003, Allied Domecq launched Kuya Fusion Rum. Produced by Kahl

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