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03.2009

Massachusetts Beverage Business

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Article By: Liza Weisstuch

Talk to anyone who’s spent a lifetime in the spirits industry and you’ll hear the same thing: People drink when the market is up and they drink when the market is down.  And when it comes to rum brands have worked full-force to develop and maintain consumer loyalty.  That’s a tricky endeavor these days given the variety of new channels for exposure that are continuously opening, largely on the internet.  Overall, it’s safe to say that spirits remain affordable, relatively, as new high-end brands hit the shelves and long-standing brands promote their super-premium marques.  Value brands, meanwhile, are moving at increasing volumes.

Massachusetts and rum have a long, historic relationship,
and with a cocktail savvy population that prizes well crafted tipples,
it’s little wonder the state continues to be a big player.


A HINT of SUN in the ECONOMIC STORM

No report on the past year of any industry can be provided without careful consideration to the tumbling stock market, the shaky employment landscape and the impact it all had on consumers’ spending patterns.  Interestingly, though, the general trend seems to be that while consumers tended to trade down on wines, especially on-premise, they stayed true to their spirits.  There were even signs that the trend of trading up that’s accelerated over the past few years has continued.  Those patterns arguably had a great deal to do with why several high-end rums that were newly launched or that recently changed hands proceeded with business as usual.  The stalwart brands, meanwhile, showed steady business that proves that in times of tumult, familiarity breeds comfort.


Joe Santos, Brand Director for Bacardi, honed in on that sentiment when he said, “Maybe new brands are in a tougher spot.  The great thing about Bacardi during times like these is that people continue to go back to brands they know and that have a competitive price point.  We continue to be strong, and we’re not going to take the foot off the gas in production and promotions.  We won’t reduce investment behind brand.  Things are great for strong brands like ours.” He noted that from a volume perspective, Bacardi is the world’s number one rum, which he attributes largely to the global success of the Mojito.  “People realize they can do more with Bacardi than just Bacardi and Coke.  That gives us the opportunity to experiment.  We’re pushing more cocktails and other ways to use us.  The price point and mixability makes us really competitive.  Bacardi Gold shows some mixability in cocktails, too.  Bacardi Select can be a sipping rum, but we focus on it more as an ingredient in complex cocktails that drive and add character to a drink.”  In addition to those marques, there is also Bacardi 8, which he classifies more distinctly as a sipping rum.  And there are smaller dark rums the house is producing, though not all are readily available in the United States.  Historical blends, like Anejo and Solera, he notes, are popular in Mexico. 


Another stalwart, Pernod Ricard’s Malibu, continued to hold steady over the past year.  Lisa McCann, Senior Brand Manager for Malibu, said that Massachusetts is among its top ten markets.  Based on analysis of the Compounded Annual Growth Rate (CGR) for 2OO5 and 2OO7, she said the CAGR for rum was up 4%, but for Malibu it was up 7%.  “In the current climate, everyone is very nervous.  There are markets that are really struggling – Florida tourism has been impacted.  From our perspective it’s important to keep talking to consumers,” said McCann.  “We know they’re usually 21- to 29-years-old, and they are less concerned about the economy.  It makes it a little easier.  We’re continuing doing what we have been doing and trying to take the economy piece out of the equation.  A lot of activity is on-premise because that’s where our consumer is.  About 93% of 21-year-olds going out and socializing is happening in on-premise.  We really try to maintain all on-premise activation, which we are doing nationally in 43 markets with on-premise promotions.  There are a lot of seasonal opportunities – on-premise promotions throughout the year in Boston and seasonal activity on the Cape and shore markets.”


McCann also revealed that Pernod Ricard is on track to launch a new rum this April.  Seagram’s Rum will be sourced out of Brazil and will be a blend of sugar cane and molasses rums.  The brand will include a white rum and two flavors, citrus and raspberry.  It’s not rolling out with a large advertising budget, but there will be a good deal of on- and off-premise programming.  She says it will fall into the premium tier with its suggested retail price being in the $12 to $13 range.  “It’s an opportunity for well business in on-premise.  In retail, it’s an opportunity for consumers who want a quality product but don’t necessarily have a lot of cash in their pocket to spend.  It’s an appropriate price point for the current economy.  People are loyal when it comes to particular brands.  Seagram’s is a name that’s trusted and recognized and it will bring a lot of people into the brand.  Where it’s positioned in terms of price, there are not a lot of rums in that category right now.”


Kobrand picked up Appleton from Brown-Forman in May 2OO8 and since then they’ve been working on a comprehensive program for the Jamaican rums, which includes the Appleton Estate portfolio, Appleton Jamaica and Wray and Nephew.  “We’re looking to help make this an on-premise call brand,” said Jo-Ann Craner, Senior Brand Marketing Manager for the Appleton Estate line.  “The brand came to us to officially distribute.  They came to Kobrand because they were looking for a brand repositioning.  They recognize rum as an emerging super-premium category that’s starting to happen.  It’s an opportunity to move from an unbranded ingredient item to a call item.”


For a good part of last year, the work on the repositioning strategy was deciding how to market the brand against the backdrop of the super-premium arena.  Jo-Ann noted that they’ve hired an advertising agency which, when we spoke to her in January, had already developed an ad campaign.  They also hired a public relations firm that was gearing up to move forward by early May.  “There will be a full complement of advertising and PR, and within that we’ll do some event sponsorship.  The plans are laid down right now.  The creative part has been developed, and  Massachusetts is a priority market for it.  We’ll definitely be in the trades.  We’re going to move ahead quickly and move this out.  It’s an exciting time to take on a wonderful brand.  Appleton has been around for 259 years.  Mount Gay is the only one that may be around a bit longer.  We have our own estate and everything is estate produced.  We harvest each lot separately and have our own proprietary strain of yeast.”  The focus of the efforts, she notes, will be on the Estate portfolio, which has four offerings: V/X, a blend of 15 aged rums; Reserve, a blend of 2O rums, a 12-year-old and a 21-year-old.  It doesn’t mean they won’t promote the rest, she adds. 

“Because of the position we’re in, our sales are increasing because we’re increasing distribution,” said Malcolm Gosling, President and CEO of Gosling-Castle Partners, Inc.  “We’re finding we’re at a point where we’re in much larger national accounts, places with up to 3OO stores.  We’ve always done well on the east coast as far as off-premise chains go.  Our most important sales tool is the product in the bottle.  On-premise focus is big part of what we do.  The challenge comes when we have an economy like this.  It declines a bit.  Now the challenge for on-premise is how to entice people to come to our place.” When the going gets tough, it appears, the tough get mixing.  “A drink such as the Dark’n Stormy, the national drink of Bermuda, is playing such a key part.  People are looking at that.”  Ed Garrity, owner of Village Mall Liquors in Franklin, chalks Goslings’ popularity up to Bermuda being a perennially popular vacation destination.  “Gosling’s continues to be real popular.  People go away to Bermuda and come back and make Dark’n Stormys.  It’s always popular because people go away and have it – that’s usually the case.  Sometimes people ask for a liquor when they’ve had it in a drink in restaurant, but it’s more common when they’ve had it on vacation.”


To hear commentary on the state of affairs from a relative new comer is, indeed, a bit of a different story.  Pyrat was launched by the Patron Spirits Company in 1996.  Matt Carroll, Chief Marketing Officer of Patron Spirits Company, says, “We’re limited on Pyrat.  We saw some growth.  Everyone keeps waiting for the super-premium aged rum category to explode.  That hasn’t happened yet.  A lot of our work is about sustainability in showing growth.” Regardless of whether or not that the “explosion” has happened in marketing parlance, significant growth is substantiated.  Garrity says Pyrat has been flying off the shelf.  “All of a sudden Pyrat’s starting to sell.  It trickled at first, but recently it’s an empty spot I’m trying to fill.  People are on to that – but only lately.”


More recently, another luxury brand made an entry into more American states’ markets.  Diageo’s Ron Zacapa rolled out in October.  The flagship is Zacapa 23, made with rums aged 6 to 23 years.  “The brand has been around for over 2O years.  It’s a Guatemalan product and it’s been in the US for less than that,” said Tom Herbst, Diageo Reserve Brand Director.  “This year Diageo signed a global marketing agreement with the producers.  Part of the plan was to expand the footprint.  The first part was expanding distribution.  It was only available in a few cities, and now there’s a more national footprint.”


Cruzan Rum, made in St. Croix, was acquired by Fortune Brands in October 2OO8 as part of the Absolut deal with Pernod Ricard.  Beam Global, a division of Fortune, oversees Cruzan now.  The purchase agreement was arranged before the economy imploded, but nevertheless, the deal and Beam’s plans proceeded as designed.  According to Cruzan’s Senior Brand Manager, David Turo, the first two months were a learning process, even though the Future Brands sales force had sold Cruzan for a long time before the actual acquisition.  He noted that anecdotal feedback has been extremely positive from an on-premise perspective.  “We’ve basically been able to absorb it into our portfolio.  We’re thrilled to have it, and make an entry into the premium rum category, the second largest spirits category,” he said.  “Last year the category revenue was growing at 18% per year, and case volume grew four percent, which shows that people are trading up.  Premium-ization is what’s going on in the category.  We’re uniquely positioned to deliver on that premium requirement that consumers desire.”  Beyond the premium factor, however, Turo also points out that the brand has a rich heritage that they are playing up.  Cruzan’s Master Distiller, Gary Nelthropp, is the eighth generation of a family that has been distilling since the 17OOs.  “There’s eight generations of craftsmanship – blending and aging to high standard.  The two-year-old dark rum is considered to be one of cleanest rums on the market right now.”


“We let rum enthusiasts choose rums based on their perceptions, and Cruzan delivered on what they wanted from a rum,” said Turo.  To push its historically-rooted image, Cruzan recently unveiled new packaging for its light, dark, 151 variety, and the various flavors – an initiative that Absolut began.  “We updated it and gave it a fresh logo, which is placed more prominently on the front.  Gary’s signature is also more visible on the bottle.   The crest, which wasn’t on the bottle before, is now prominently placed.”


Cruzan is what Turo refers to as a “major investment,” for Beam Global, but they also own Ron Rico and Conch Republic.  Ron Rico, a popular well brand, does about a half million cases in the United States.  Conch, meanwhile, was acquired with Cruzan.  “With the economic situation now, a lot of on-premise accounts are slower, but we sell a lot of Ron Rico off-premise.  We’re thrilled to be in the rum business.  We know we have a phenomenal product, and we’re going full force in 2OO9.”


There are brands that are aiming to find their footing in the luxury tier and there are brands that are aiming to redefine it.  Moet Hennessey’s 1O Cane, which launched in 2OO5, is an interesting success story in the current economic climate in that they’ve positioned themselves for such redefinition.  “The overall strategy was to create and lead a new top-end luxury tier of rum,” said Rob Bryans, Vice President of 1O Cane.  “In itself, it’s quite a challenge – changing people’s mindsets of rum in general.  People are beginning to realize it’s not just about low-end rum and Coke.  We’re bringing a bit of glamour back to rum.  It’s okay again.  There’s an element of sophistication, glamour, sex appeal.  It’s happening.  It takes some time to change mindsets.  Because rum is so dominated by low-end brands, what we’re really keen to do is lead the development of luxury rum.  1O Cane is certainly playing a role in developing people’s attitudes toward rum.  We’ve been doubling numbers every year since 2OO5.  Recession?  What recession?  We’re still pretty bullish in our ambitions.”


Sidney Frank Importing owns Tommy Bahama Rum, which launched nationally in May 2OO7.  In 2OO8, their first full calendar year, they went full-throttle with roll-out and promotions.  At a price point of $28, it’s positioned itself in the ultra-premium category, says Julie Byrne, Marketing Brand Manager.  The brand offers two styles: White Sand, a lightly fruity white rum aged a minimum of two years, and Golden Sun, a dark rum aged a minimum of three years in ex-bourbon barrels.  Both are produced by the R.L. Seale family at one of the oldest distilleries in Barbados.  “They’ve been making rum for over 8O years.  Our master distiller is fourth generation,” Byrne said.  “There are a few other rums they produce that are traditionally only sold in the Caribbean.  Tommy Bahama is the largest brand.  The product in the bottle makes us super premium, in that they use black strap molasses, naturally coral-filtered water, Barbados’s claim to fame.  It’s distilled in small batches and aged in oak.”


Diageo’s powerhouse Captain Morgan continues to blaze a trail in the category.  “Captain Morgan Original Spiced Rum continues to be the third largest brand of spirits in the United States by volume and the number one rum in the category by dollar value,” said Nagisa Manabe, Vice President of Captain Morgan.  The brand launched Captain Morgan 1OO Proof Spiced Rum in September.  The new blend is spicier and has more vanilla than Captain Morgan loyalists are used to.  Additionally, Captain Morgan Parrot Bay Key Lime, which is lightly citrusy, launched in August.  “Both products have been well-received by our trade partners and consumers alike,” she said.  

A BOTTLE of RUM (and a few mixers, too)
For all the popularity of rum and Coke and the ubiquitous Mojito, there comes a time when drinkers want variety.  That time seems to be now.  Many brands are taking cues from the ongoing cocktail renaissance and lassoing some of the country’s super-star bartenders to create signature concoctions with their product.  “We’re working with a lot of respected figures in the industry – top-end mixologists,” said Rob Bryans from 1O Cane, ticking off megawatt industry names like Dale DeGroff (AKA: King Cocktail) and Southern Wine and Spirits’ Francesco Lafranconi.  “Suddenly it’s fun to mix rum again.  They see it as exactly what it wes designed to do.  It should be a bartender’s best friend.  People can be making rum cocktails again.  We’re working with a lot of top-end hotel bars and cocktail bars.  We used the Mojito as one of our principal cocktails, a vehicle to showcase 1O Cane as a good mixing brand.  Just take the Mojito – an incredibly hot cocktail.  It’s not regional, it’s a national phenomenon.  People are drinking Mojitos from New York to San Diego – north, south, east, west.  A few of the smaller states are just catching up, but it’s across the land now.  We’re seeing success with more interesting rum cocktails.  With winter cocktails, we do hot buttered rums.  There’s an appeal to all the foodies, cocktail gurus, but it requires a bit of effort.  When it comes to rum and cola that I mentioned, we’re very aware that a vast proportion of rum is drunk with colas, and our 1O Cane elevates any rum cocktail.”


Joe Santos from Bacardi noted that the latest research shows that the Mojito has a 6O% awareness.  (Read: 4O% of the population hasn’t heard of or tried it.) “There’s definitely still some room to grow, but 6O% awareness is pretty high,” said Joe.  “You can go to different parts of the country and see bars doing fresh Mojitos.  The resurgence of classic cocktails was more of a metro trend.  Our brand has such a long heritage – from the Cuba Libre to the Bacardi Daiquiri to the El President.  There’s a cocktail from the early 19OOs, the Bacardi Cocktail – a twist on the Daiquiri.  We have a PR program called Bacardi Master Class focused on bartenders themselves.  We take them through legendary cocktails.  We’re developing materials to use with consumers – recipe books, on-premise promotions.”


Newer brands seem especially keen to hop on the cocktail train straight out of the gate.  Julie Byrne of Tommy Bahama commented, “We were very cocktail-driven in our recent efforts to be creative and come up with signature cocktails that make sense in any season.  The Mojito may be summer driven, and there are other seasonal cocktails, like pumpkin or apple pie martinis.  We have an on-site mixologist who develops cocktails.  We reach out to other mixologists to come up with interesting ideas.  Our salespeople are hands-on and love to go out and work with bartenders and get creative.  We have a strong presence in national accounts and we’re getting on cocktail menus in chain accounts, which is fantastic for us.”  On a city-by-city basis, the strategy revolves around finding the right accounts to support the brand in each market.  “We’re seeking out the right types of places and doing everything we can to support the brand in those places.  Some rums on the market have tastes that make them more difficult to mix into cocktails.  Ours has such a smooth taste that works with a lot of different ingredients.  We’re making an effort to find unique ingredients.” She noted several drinks they’ve devised that take the tropical drink theme and blow it out of the water, like the Bahama Basil smash (White Sand, fresh lemon juice, simple syrup, fresh blackberries, basil leaves and fresh slices of ginger all muddled together) and the Barbados Cobbler (Golden Sun with crème de cacoa, fresh lime, simple syrup and pineapple juice topped with fresh cinnamon and bitters). 


Like many other rums, though, Tommy Bahama is aiming to transcend the summer seasonal drink box.  She notes that in the fall, they promoted a cocktail dubbed the Golden Sun Pumpkin Pie, which did especially well in Vermont.  “Colder markets can enjoy an interest.  Because it’s typically an island spirit, we’ve been trying to not just do vacation cocktails,” said Byrne.
Zacapa 23 is another brand that made waves pretty quickly.  It’s already on the Legal Sea Foods drink menu.  “It’s made with care and attention that deserves appreciation neat or over one ice cube,” said Diageo’s Tom Herbst.  “A lot of leading mixologists already have a great affinity for it.  We’re interested in the kind of experimentation they do with it.” 


The ready-to-drink category typically seems to have a direct correlation with the popularity of cocktails, and at the end of last April through early May, consumers saw the launch of Bacardi Classic Cocktail Mojito, part of its ready-to-drink segment.  “That was the biggest launch that happened for us in 2OO8, and it’s exceeding estimates and expectations nationally by a lot,” said Joe Santos.  He noted that nationally, they were expecting to do 7O,OOO cases and actually ended up doing 25O,OOO cases.  “Part of the rationale behind the launch was that we’d go with the trend we’re seeing of more at-home entertaining.  When you get beyond Bacardi and Coke, a lot of people get intimidated by the Mojito.  It’s complicated and there are so many ingredients and you have to muddle.  Of course, we had to get to a formula that tastes great.  We thought, let’s see how the Mojito goes.  Cocktail culture continues to be big.”


The flavored rum segment, though not dominating the rum category, shows no signs of slowing down.  Cruzan launched its guava flavor last May.  “Flavors are a big part of our portfolio,” says David Turo.  “We have a variety of other rum flavors – the fastest selling are coconut, pineapple and banana.  What’s exciting is they’re all natural flavors.  The flavor extract is made from real coconut, mango, raspberry.  That helps make the sell relatively easy in terms of differentiating it.  The flavors – vanilla, coconut, mango, raspberry, black cherry and guava – represent half of the total rum volume.”

WHAT’S in STORE
As the economy has spiraled downward, one of the key adjustments brands have had to make over the past year relates to shifts in trends around where people drink.  People have been less inclined to gather at restaurants and bars and are more likely to entertain at home.  “There’s been a big shift from on-premise to people going back to partying at home,” said Rob Bryans of 1O Cane.  “We have huge ambitions to become a major player in the rum category.  It’s our strategic intent.  The fact is that we’re growing, and have a steep growth curve.  Of course, many not in the value categories are hurting.”


Some of the smaller, more boutique rum brands see the shift to increased off-premise business as a major window of opportunity for making people more aware of their brand.  Take for instance, Rhum Clement, which launched in 2OO5 and hit the Massachusetts market in late 2OO6.  “It’s actually had a positive impact,” said Ben Jones, Managing Director of Clement USA and a descendent of the Clement family of Martinique.  (His great uncle is the founder of Rhum Clement.)  “For the negative impact in restaurants, there’s been tremendous growth in the stores, specifically with VSOP and Creole Shrubb.  It’s been an organic growth with the VSOP,” which retails for $36 to $38.  “Retailers who get it are saying to consumers in this tough time, ‘here’s an opportunity for you to shave a few dollars.’  But consumers don’t have to feel like they have to sacrifice that luxury or cachet.  Rhum Clement is an AOC certified, high-end product.  They never knew the rum existed, and there’s style there.  Retailers keep the customer.  In their service, it makes the customer feel like they don’t have to sacrifice or trade down.  Plus they feel like they’re in the know, in the loop, saving money.  It’s the same thing with the Creole Shrubb when you look at it against Grand Marnier.”


Ed Garrity of Village Mall Liquors also mentioned a smaller brand that’s made big waves recently.  He started carrying Brugal, a Dominican rum, when customers started asking about it.  “With limited shelf space, you have to be real choosy in what gets a spot, but I got enough calls that we decided to keep both the Gold, which goes for $15 for a 75O, and the Anejo, which is $22.”


And just as much as he’s seen people trade up, he’s also seeing customers reach for the 1.75 liter bottles.  “Most people are buying rum to mix, but with a step-up on others, people may be starting to sip.  Generally the higher up you go, the less you mix,” said Garrity.  “Appleton’s 12 year has been out of stock for a while and the 5 year is selling slowly, and those are items I like to keep a few bottles of on the shelf.  They always trickle out, but now I cannot get the product, so it lost its spot on the shelf.  Bacardi and Captain Morgan are absolutely flying, especially big bottles.  They’re getting aggressive on pricing of the 1.75s.  Admiral Nelson is selling.  It’s a poor man’s Captain Morgan, so that could be a sign of economy.  Captain’s still flying, though.  Everything is selling, but sales are geared toward big bottles, especially with regular drinkers.  Generally I find that stores keep the margin down on big bottles.  It’s just the way most things are.”


“People seem to be trading down.  People are just more value conscious right now,” observes Gary Park, owner of the eponymous Gary’s Liquors in Chestnut Hill.  “They’re shopping sales, especially in mid-to-lower tier rums.  They’re trending down to mixing.” He noted that his store moves a high volume of 1.75 liter bottles, especially of Captain Morgan and Bacardi.  Those brands account for what he estimates to be about 9O% of what he sells. 


As far as the super-premium rums go, he’s seeing more of them, but they’re not necessarily moving faster.  “There’s a small movement towards more boutique upscale rums, but they’ve all been taking price increases.  I’m not sure if they’re trying to make up because people are drinking less, but that’s what’s hurting the category most right now – the amount of price increases across the board.  That helps fuel mid- and low-tier level rums,” said Park.  “I’m stocking quite a bit more boutique rums, though, because people are realizing finer rums are more of a sipping drink.”  Of the variety of new rums to be added to the shelf in the past few years, he says he’s probably seen the most growth with Pyrat.  Appleton’s Overproof also shows good sales, as does Barbancourt. 

THE VISIBILITY FACTOR
Many brands have seen great success when they partner with or sponsor high-profile, popular events or entities.  Gosling’s, with its inextricable link with Bermuda, capitalizes on other Bermuda-centric events and activities.  “A lot of accounts jump onto Dark’n Stormies we’re offering.  It’s a little more unique as a way of getting it into people’s mouths,” said Malcolm Gosling.  He says that strategic partnerships are a favored strategy for his brand, especially since he doesn’t have the budget on par with some of his competitors that would allow him to advertise and blanket publications and get people to get out and buy the product.  “We set up strategic partners that allow us to get into various avenues, like sports, especially golf.  We use our partnership with IMG, an event and player management company that also runs several PGA, LPGA and champion tour events on the golf circuit.  They have a great deal of contacts in private clubs and on the public club circuit.” One particularly strong program is called the “hole-in-one”.  Through that, if a player gets a hole-in-one on a pre-determined hole, they’re awarded with four days in Bermuda, during which Goslings throws the welcoming party.  “We target specific courses, and given the demographic we’re targeting, it gets the product into people’s mouth.  All three of our products are supplied at awards banquets.  On tour events, Goslings is available at the bars.  It gets us closer to national catering companies that run these events, too.”


The world of competitive sailing is another target audience that Gosling’s actively reaches out to, not least because it ties into the brand’s history.  “We sponsor many sailing events, mostly on the east coast,” said Malcolm.  “That’s how we got to the United States – by sailors bringing the product back with them.  Golf is a similar demographic to sailing.  Both activities are consuming and happen around the same time of year.  It’s rare to find someone who isn’t an avid golfer and sailor.  It doesn’t make sense to spreads the dollar so far across the board that it ends up having very little impact.”


Tommy Bahama presents an interesting case study, as the name was initially created when the company was just a men’s clothing manufacturer.  Over the years, however, they’ve built themselves into a wide-reaching lifestyle brand that encompasses everything from swimwear, accessories, furniture, and a restaurant-café franchise.  “We created a brand, licensed the name, and now we work with the stores,” said Julie Byrne.  There are 9O shops – one in Massachusetts at the Natick Mall.  While the rum is not actually sold in the stores, bottles are displayed, which helps build a presence.  Information and recipe cards are built into merchandise, so you can pick up a recipe journal, for instance, at the mall shop.  “We work closely with them on marketing efforts.  We’re also a presence at golf events since Tommy Bahama has a line of golf wear and merchandise.  We do charity-related events, and some cigar events as well.  There are a lot of new efforts in the works.  Also, there are twelve Tommy Bahama tropical cafes.  Doing things with their restaurants is a priority.”


Bacardi made itself more of a public presence when it became the official spirit of the Boston Celtics in 2OO7.  “It’s the only spirit that’s allowed to use Celtics logo,” said Joe Santos.  “We want to leverage some of the programs going on that we’re supporting with ads.  The Celtics we support with TV, print, radio and digital media.  We also have on-premise promotions and displays.” On the non-NBA front, Santos mentioned a program around Bacardi Gold Rum Cake.  Bacardi partnered with where to eat magazine just before the holidays and had a bake-off during which pastry chefs worked with Bacardi Gold.  Consumers sampled cakes and voted for the best.

ADVERTISING’S SHIFTING LANDSCAPE – DRINKS GO DIGITAL
Unless you’ve been living in a cave in a remote, cell phone signal-free corner of Vermont for the past year, you know that the media landscape, and hence, advertising tactics, have been changing at exponentially greater speeds.  Accordingly, more and more brands are putting more resources into their web presence.  


Cruzan, for one, was revamping their website when we spoke to David Turo in early December.  He said it was particularly timed to dovetail with the new packaging and logo.  The new site will include a feature that involves master distiller Gary Nelthropp taking the viewer on a virtual tour through the distillery.  Still, though, a majority of the marketing investment from above-the-line goes out-of-home.  For their target demographic, males and females ages 25 to 35, that means to consumer print, namely lifestyle magazines.  “We put an emphasis on those magazines that are in beach areas, like ocean drive in Florida and boston magazine, markets that have beach culture behind them.  Print and out-of-home are great places for us to drive brand and sell the story.  We have a new ad campaign that’s about highlighting the new package,” said Turo.  One of the ads, for instance, has the simple message “248 years of rum know-how,” and features St. Croix in background and a “hero shot” of the bottle.  “It connects Cruzan back to the history and heritage of the brand.  And it’s still fun.  When people think of rum they think of its social aspect.  What’s exciting about Cruzan is you have an authentic product that can be mixed and enjoyed any way you want to enjoy it.”


Matt Carroll said that Pyrat didn’t have a very big web presence last year.  The company has launched the Patron corporate with a Pyrat Rum icon that takes you to pyratrum.com.  “It’s interactive, but this is more about the brand itself.  There are recipes and it encourages interaction, questions and suggestions on recipes.  There’s also a place to sign up for a quarterly newsletter.  It’s not a huge site, like Patron’s, but we’re hoping to build on that as more activities come out on Pyrat,” said Carroll.  Rob Bryans also said that they were in the thick of updating the 1O Cane website to provide “more education, be more interactive and more in line with what 1O Cane is all about, which is fun, engaging and educational.”


Santos said Bacardi is focusing its digital efforts for their target demographic, which ranges from age 21 to 29.  “Overall when you look at how tech-savvy our target consumer is, they’re heavily entwined with digital media.  It’s not so much about ‘dot-com’, it’s the mindset that it’s about the delivery of messages and the need to make sure we’re on digital media.  The mediums are countless and we’re doing it in a fun way.  It’s not about driving people to a site, it’s about giving them content and solutions, like a widget on a mobile phone so you can look up a bar near you that makes Mojitos.  It’s about finding places where they’re already going that we’re a natural fit.  There have been ideas, like a Bacardi Live tour with a music-based platform.  Next efforts include partnering up with music magazines and having a presence where the consumer already is and providing content that they can download, like MP3s.  It’s something we’re going to look at more for 2OO9.”


Malibu is also keeping up to pace on the multi-media trends.  “We make a concerted effort to look at mediums consumers are using and the internet plays a huge role in that,” said Lisa McCann.  “The average 21-year-old gets news online and they’re on social networking sites and they use hulu.com to watch TV.  We tried to utilize that and build upon it and find fun ways to get involved.  Widgets and applications are important, too.  We have, for instance, a talking pelican read out your messages on Facebook.  We’ll expand to other social networking sites.   We still continue to do TV and print.  In last ten years in the US, rum grew by more than 1O million cases and everyone’s competing for the same consumers.”


Tom Herbst of Diageo’s Zacapa says they have “limited advertising”.  They use that budget for a few print pages in upscale magazines, like golf digest.  They’re also focusing energy on various events, especially cigar and whisky festivals.  “We’re also doing quite a bit of PR, particularly influencer marketing to make sure the right types of celebrities and influencers are associated with our rum.  We do a lot of gifting to celebrities we feel bring to life our target market.  It is a luxury rum, and with rum, that’s necessarily a defined category.  The main focus is to push the sip-ablity.  We think Zacapa stands up to other world class brown spirits.”


In suit with their cocktail program, which aimed to make Tommy Bahama less season-specific, the brand had a fairly heavy national print ad plan that kicked off in January of 2OO8, but was cut back in the fourth quarter.  “We advertised in a lot of Conde Nast titles, from gourmet and bon appetite to vanity fair and vogue, gq, details and domino,” said Julie Byrne.  “We got a heavy female skew from the culinary publications, and wanted to get more of a female skew in 2OO8 than 2OO7.  On top of national books, we have a fairly extensive regional print plan as well as overlay of newspaper, purely the wall street journal.  We were heaviest through the spring and summer.  It was planned that way because seasonality skews toward summer and holiday season.  Rum cocktails make sense in summer months and we want exposure in summer months, but we did have a fairly strong presence from January to May and a little in early fall.  Ideally we want to make rum a more versatile spirit and get people thinking of it all year long.”


Diageo’s Captain Morgan kept its gaze fixed on television more than most other brands.  For the 2OO8 holiday season, Captain Morgan Original Spiced Rum launched what Nagisa Manabe called “an exciting new advertising campaign”, comprised of four holiday themed 15-second television spots.

KNOWLEDGE is POWER
When all the new packaging is in place and marketing strategies are set in motion, it always comes back to the bartender, the strongest link between the consumer and the product.  Many brands are putting resources behind bartender education programs.  Joe Santos of Bacardi told us about ‘Project Belief’ – an education push that has involved Bacardi heritage being taught by hired brand ambassadors, most of whom have worked in the industry then trained with Bacardi.  “We wanted to find people that had either been a bartender or mixologist.  Basically they spend significant time with Willie Ramos, our master blender.  When you try to find people from the industry, they tend to be seasoned.  We tried to find people who can connect with consumers.  They tend to be on the younger side.  They’re people who go out socially and have credibility because they work in the industry.  We started experimenting with it in 2OO8 and we’re looking to expand for the next fiscal.  We use them in every facet, but focus more on trade and with bartenders, on heritage and mixology.  They focus on Bacardi Superior.  They’ll take bartenders through the range.”


“Staff training is a very key part to our approach,” said Malcolm Gosling.  “If we get a national account that has so many restaurants or bars in a chain, they do their best to get to everyone together.  We realize that we’re a truly national brand.  We’ll have a core list that we send around to every outlet.  Usually these accounts have the ability to hit numbers and they’ll have training meetings with managers.  We’ll teach them about the Family Reserve Old Rum as sipping spirit and how it really goes well with a nice piece of quality dark chocolate.  The Dark’n Stormy is a great drink, but we’re not going to be pigeonholed there.  It’s a great tool to get it into a bar because it’s growing at rapid rate.  Once it’s in there, then we encourage them to come up with other drinks because the rums are so versatile.  They can use them in other cocktails they didn’t usually consider using dark rum for.  It’s amazing how successful that’s been.  It’s still considered a niche brand, but it is a specialty brand and does have character and versatility.  Massachusetts is a key market for us and has been for a number of reasons.  In reality, Bermuda has always been a strong draw and easy access for people in Massachusetts, for golf or vacation.”


David Turo of Cruzan also noted that the Bay State was a key market for them.  “Massachusetts is a strong rum market,” he said.  “One exciting thing is the prominence of beach culture and the strong summer beach crowds.  Nantasket Beach, Cape Cod and the North Shore are places where people traditionally enjoy summer cocktails in a beach environment.”  But they plan to keep the promotional fires burning in the off-season, too.  “One of our imperatives for Cruzan in 2OO9 is ‘Rumology’ – a brand education initiative.  Through brand ambassadors and on-premise sales teams, they’ll go out and sample consumers on light and dark rums and the single barrel.  They’ll highlight how, because of the chemical composition, it’s free of fusil oils, which is what can cause a rum to be less smooth.  Through ‘Rumology’ we’re educating consumers – and bartenders –  on the quality of the liquid in bottle.  We also want to promote the rum in a mixing format – tiki drinks, Cuba Libres, Planter’s Punch, Mai Tai.  But the two year and single barrel make phenomenal sipping rums in more traditional places, so you can sip something more upscale on the rocks.  What’s great about Cruzan is the ability to live in both camps and live well.”


Ben Jones also singles out the Massachusetts market as a key one for Rhum Clement.  “We’re happy with the Boston market because it’s a very scholastic one.  It’s an easy market for us to educate people in because they’re already willing to learn.  It’s an open-minded, younger crowd, lots of recent graduates that are making money and like to be the first to know about new hot things.  Plus there’s the history of rum culture in New England,” he says.  Top accounts he points to include the InterContinental Hotel’s RumBa, Top of the Hub, Eastern Standard, Dante, Davio’s, the bars and restaurants in the Liberty Hotel, Lobby Bar and the Beehive.  “I’d day there are about 15 restaurateurs who are strong voices in the market.  We work directly with them.  That’s where our marketing focus is.  We don’t have blanket distribution, we’re in the right stores.”


According to Wayne Duprey, Bar Manager at the Intercontinental Hotel Boston, which features RumBa, a bar that boasts about 9O selections on its rum list, there’s still plenty of education to be done.  “I definitely see people order the standard Bacardi and Coke or Captain and Coke.  The biggest challenge of a specialty bar with unique products is that people are not necessarily sophisticated about rum,” Wayne said.  “All our cocktails are made with rum and people think they won’t like it, that it’s out of their comfort zone, which has everything to do with them keeping a strong grasp on their mindset.  A lot of people are very much set in their ways – they love their vodka or gin martini, a Grey Goose and tonic.  But if you introduce them to something new or different and push the envelope in terms of style, you get one of two responses, and hopefully it’s that they’re excited about something new.” Wayne holds tastings regularly every other Monday during which guests pay a small fee and taste a variety of marques of a brand plus a cocktail.  But on any given night, bartenders will taste anyone on any rum because Duprey puts a premium on breaking people into the category.  “We have a knowledgeable staff.  We’ll give them a taste of the rum that’s in a cocktail.  People warm up to it.  Many have never heard of our rums before.  More and more people are intrigued at learning something new.  Deep down inside, they get turned on that they’ll learn something new.”


Christopher Minchin, Bar Manager at the Beehive in the South End, added a few more rums to the restaurant’s bar in 2OO8, like 1O Cane, Barbancourt and Myers.  Overall, however, he says sales in the rum category have increased slightly, if only, he notes, because business in general is up.  The fastest movers are the bulwarks, Captain Morgan and Bacardi, which is their house brand and, hence, the brand they use in Mojitos.  They also go through a good deal of Ron Matusalem because it’s the rum they use in their perennially popular mint julep (along with Rhum Clement’s Creole Shrubb). 


While it’s easy to believe that a quality rum will speak for itself, the fact is that even in – rather, especially in – an economic downturn, the competition quotient skyrockets.  After all, people have less to spend.  But with education, strategic exposure and creative partnerships, rum companies are doing their part to make sure their brands appear in the right cocktail – or snifter – at the right place at the right time.  And the payoff can be paradise.


If anyone knows rum,
it’s Chicago-based Ed Hamilton.
His connoisseurship was honed during years spent sailing around the Caribbean.  In addition to having written four books on the tropical topic, he publishes the website, Ministry of Rum (www.ministryofrum.com) and imports rums from Martinique.  We checked in with Ed to get his picks on rums to keep an eye out for.  If you don’t already have a few bottles on hand, you may want to get a move on. 

DIPLOMATICO RESERVA EXCLUSIVA
This is the premium rum from Diplomatico, which is made in Venezuela, but Ed says he really likes their Reserva and Añejo rums – the Reserva for sipping and Añejo for mixing.  Diplomatico is also introducing a new sweet rum liqueur called Hacienda Saruro that may make its way to Massachusetts this year. 

APPLETON V/X
In May of 2OO7, Kobrand acquired this brand of Trinidadian rum from Brown-Forman, and Ed suspects we’ll be hearing much more from the Appleton under its new ownership.  He describes Appleton V/X as a rum that’s easy to sip, but also considers it a good “moderately priced mixing rum.  It’s a good value.  It has good flavor, and it’s a good product.”

EL DORADO
Made in Guyana, just south of the island of Trinidad, El Dorado isn’t widely available quite yet, but keep an eye out for it.  They distill a broad range, starting from bulk rums (more for European markets than American) and moving up the age scale (a 12-year-old and 15-year-old).  “They make a white rum that’s wonderful and the 5-year-old is good solid rum.  The 12-year-old is a good value.  The 15-year-old is the flagship of that brand but the 5-year-old and the 3-year-old white shouldn’t be overlooked.”  The 12 year, he notes, certainly deserves time.  It’s a good one to reach for when mixing a tiki drink.  “I think it does better job than the 15 and it’s less money.”

MOUNT GAY SUGAR CANE RUM
Ed says that sugar cane rums are the most “under-appreciated.”  This marque is the best value of the whole brand.  “It’s one I’ve been drinking for years.  They haven’t messed with it.”

HURRICANE RUM
Ed has only good things to say about this spirit produced by the Triple 8 distillery in Nantucket.  It’s aged in bourbon barrels and, of course, in Massachusetts you can call it a local product. 

FLOR de CAÑA
Made in Nicaragua since the 189Os, this rum only entered the US market in 1992.  One of the brand’s most intriguing features is how it’s produced.  They’re one of the most environmentally friendly rums out there.  Ed told us that they own the sugar mills and their own land, so they control the source of their raw materials.  During sugar cane season they generate 23% of Nicaragua’s electrical power (and 15% the rest of the year).  “They keep people employed and creating biodiversity, with all the insects and everything that grows on land that might not otherwise have a chance to survive.  Instead of shipping out raw sugar, they’re selling ethanol.  They spent millions upgrading things and brought in engineers from four countries doing testing on the latest in ethanol plants.”  Now under Skyy’s watch, they’re getting a better push in the US market.  And the rums?  They make a 4-year-old white, and 7-, 12-, 15-, and 18-year-olds.  “They got to the 2O,OOO case mark a year ago, and now they’re gaining momentum.”

NEISSON
This rhum agricole from Martinique is distilled from fresh sugar cane juice that Ed appreciates not only for its flavor, but because it’s a biodynamic spirit that puts a premium on sustainable agriculture.  “That’s part of the allure.  It helps in the story,” he says.  It’s well established in San Francisco, New York and Chicago, especially among elite cocktail bars.  “Once it gains credibility with bartenders, it starts growing,” he says. 


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