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Blame It On The Mojito

tastes profiles of tequila, single malts and every other
spirit have grown more complex, and prices have soared,
consumers have grown more sophisticated and picky about what
they drink and buy, regardless of category. Where five years
ago an $8O to $1OO bottle of tequila or scotch may have sat
on a store shelf gathering dust, today the demand for such
ultra luxe products is fierce. Such “premiumization”, as
this trend is known, is one factor that has primed the
market for increased sales of high quality rum. From 2OO4 to
2OO5 rum sales in the United States grew 6% and trail only
vodka. Flavored rums and the resurgence of classic cocktails
are also driving rum’s popularity. “There are definitely
changes. Signs seem to point to a future of what’s happened
to vodka and is happening with tequila. Given
premiumization, everyone is enjoying rum in all kinds of
venues,” says Todd Schuessler, Brand Manager for Mount Gay
rum at Remy Cointreau USA. “Some people like to sip single
malts and Cognac, and rum is starting to appeal to them.
It’s not only for cocktails, but nice to sip as well,” he
observes. “With the higher-end rums now coming into light,
consumers who would reach for a Cognac or other spirit are
looking at rums that appeal to their palate,” he says.

Three main
factors are driving rum, he concludes. First, “Every time
you turn around there seems to be a new rum flavor coming
out.” Next comes what Schuessler calls the “trading up
factor” where consumers ask, “What’s the top shelf brand?”
Third, but significant, is the popularity of the Mojito. “If
you look at how rum is consumed, it’s just increasing.
Classic cocktails are back with a vengeance, along with new
twists on popular cocktails, switching the key ingredient
with rum.” Then again, he notes, products such as Mount
Gay’s Extra Old rum, aged between 12 and 17 years, offer the
kind of bold flavors that appeal to enthusiasts of single
malt, Cognac and other brown spirits enjoyed for

“Americans are
demanding authentic, sophisticated, hand-crafted cocktails,
which is why we’re hearing more and more bartenders and
restaurant managers tell us that rum sales are increasing.
From the Mojito to the Daiquiri to rum and cola, it’s all
about genuine, premium cocktails,” says Laura Baddish,
spokeswoman for Bacardi. “The rum category is growing
because consumers crave flavorful drinks, which is why we’re
seeing Bacardi sales continue to increase. The Mojito is one
reason for the growth of rum; another reason is the
discovery that drinks like rum and diet cola contain no
carbohydrates and no sugar. Classic cocktails like the
hand-shaken Daiquiris and [other rum cocktails] are
rising in popularity at trendy lounges in places like
Boston, London and New York,” she notes. “As the spirits
industry becomes increasingly cluttered and competitive,
we’re hearing more that our distributors are looking to
focus on the most valuable products in their portfolios,
especially brands that offer sustainable growth year after
year,” she says.

Adds Brandy
Toth, Division Marketing Manager for Bacardi Brands in New
England: “Over the last two years the Mojito has had a huge
influence bringing people into rum. We embraced the Mojito
early and were featured in the film “Miami Vice”, which drew
a lot of attention.” Unlike the Cosmopolitan, which many
brands adopted as their own, Bacardi launched an integrated
print and television advertising campaign in an attempt to
link the brand with the drink. “Last summer, we saw double
digit growth for Bacardi rums and flavors – we’ve seen great
success on-premise with Bacardi flavors. In Massachusetts,
rum’s annual growth rate is about nine and a half percent,
which matches tequila, she says. “People are demanding
premium luxury brands, such as [Bacardi-owned] Grey
Goose vodka, and learning more about what’s in their glass,”
Toth says. To help draw consumers into the category, “We are
looking at rum education as a big part of our brand. We
offer rum training to bartenders and account staff, and have
a traveling brand ambassador who conducts staff and consumer
training,” she says. Taking advantage of Mojito madness,
Excelsior in Boston set up a muddling bar last summer to
allow guests to design their own cocktails. “We had a good
relationship with Bacardi and thought we’d do this,” says
Candace Smith, Excelsior’s bar manager. “We took fresh
fruit, mint and basil, along with the different Bacardi
flavored rums, Sapphire gin and Grey Goose vodka and allowed
guests to create their own cocktails,” she explains. With
guidance from a bartender, guests chose from the ingredients
displayed and watched their drink get muddled and mixed in
front of them. “It was very successful and people expect us
to do it again,” she says, noting the muddling bar will
probably open again in July.

One of the
leading flavored rums, category heavyweight Captain Morgan
Spiced Rum, has seen double-digit growth every year since
1992. “There’s a trending toward drinking spirits in
general, and with that, more sophistication among consumers.
Spirits have entered the repertoire of peoples’
consumption,” says Diageo spokesman Greg Leonard. Driving
the brand’s success is largely the result of heavy
advertising on cable television, event sponsorships and bar
nights at numerous accounts. The latter feature “Captain
Morgan” in the flesh, leading consumers in a contest or
game. Increased numbers of legal age consumers and their
desire for a white rum alternative also fuel growth, he
says. Looking to cash in on the growing ultra-premium
category, Diageo last year launched Oronoco, a white
Brazilian rum that sells for about $35, in a handful of
markets. Leonard comments, “We figured there is space for
that ultra-premium drinking experience. Consumers are
traveling more frequently to rum-producing countries and
they want to enjoy rum they taste there when they get

And speaking of
flavored rum, Malibu remains the coconut rum leader with a
6O percent market share and a growth rate of over 82 percent
in sales volume during the past 1O years. “Malibu is one of
the fastest growing and most dynamic brands in the rum
segment and the overall spirits category,” says company
spokeswoman Liz Benyon. “Malibu has earned impact’s Hot
Brand and adams’ Growth Brand awards for several years
running and is considered to be a very vibrant and youthful
brand.” To keep the brand fresh, Pernod Ricard plans to
launch new packaging for the Malibu product line this March,
The pineapple, mango and passion fruit flavored rums will be
bottled in the same signature white bottle as the coconut
rum. Along with this, the company plans to unveil “a new
drinks strategy” to spur consumer interest in the brand, she
says. “The continuing popularity of all things cocktail
remains a key driver of the increased consumption of
distilled spirits and rum is no exception. Rum has
definitely benefited from the cocktail renaissance. It is
versatile and mixable and has become a key ingredient in
many contemporary cocktail selections. Interest in things
Latin and tropical has also helped spur demand for rum-based
cocktails. While vodka is often touted as the seamless
mixer, rum is favored when it comes to sensual flavors,
aromas and golden colors,” she continues.

Not all rums are
focusing on flavors. “I’m starting to see flavors slow down
in favor of a return to the parent vodka or rum,” observes
Joe Murray, Brand Director for Appleton Rum at Brown Forman.
The brand is growing by about 14 percent a year, he says.
“I’d like to think that in 24 months amber rum will be more
popular, first in soda or on the rocks,” he says. Still,
“Rum is seen as fun and people don’t mind putting rum in a
blender. Even though some people want rum to be a luxury
beverage, I don’t think it’s ready for $35 a bottle yet,” he
remarks, noting “We see the $24 to $34 bottle of aged dark
rum being the next evolution.” This, Murray emphasizes, “is
where we’re hanging our hat as far as the next big thing. We
want to take the lead but can’t do it by ourselves.” As far
as competition, “Ron Zacapa and Goslings are our
competitors,” he says.

One approach
Murray says he believes in is trying to steal a page from
Johnnie Walker scotch by marketing 8-, 12- and 21-year-old
rums and highlighting their differences. “When our parents
drank, they had scotch in the fall and gin in the summer.
Now, some drinks might be tequila, some vodka,” he says,
explaining, “We’re not better than anybody else, we’re just
different. Someday we’ll go toe to toe, but right now it’s
us against the premiumization of the other categories.”
Consumers look at costly rums now and ask why they should
spend so much. “They’ve swallowed that pill on Goose, on
Patron. It’s just a matter of educating them,” Murray says.
Appleton’s new advertising strategy is nearly done and
should go public in March or April, he remarks, adding it
will first focus on the trade with estate rums, then target
consumers in the Fall. “We’ll go back to old school tastings
in restaurants and stores to taste consumers on rum, and get
away from promotions. We’ll try to change the way they think
of rum. It’s not just for frozen drinks. We’re more bourbon
or scotch, in the amber category,” he exclaims.

“The rum
category is going to continue to explode and become even
more competitive,” says Malcolm Gosling, President and CEO
of Gosling-Castle Partners, the US marketing company for
Gosling’s Rum, noting that rum sales are expected to grow
through 2O15. Even though the majority sold now is flavored
rum, Gosling says consumers are increasingly interested in
and are buying more premium-level and aged rums. “Consumers
are not looking for a tasteless product,” he states. It
doesn’t matter if people first enter the category by
drinking flavored rums as long as they enter the category,
he adds. “As consumers mature, it’s anticipated that they
will try premium products,” he continues, referring to rums
such as Gosling’s Black Seal and Old Rum, and other high-end
brands. “If you were one of the brands there at the onset
you will be positioned correctly, enabling you to withstand
the market entries that undoubtedly will come,” he

“When you’re in
this segment, the proof has to be in the bottle. People have
to say ‘This really is an outstanding product’,” says
Gosling. “You can have all the ads you want, but the best
sales tool is getting it into the consumer’s mouth,” he
explains. “Gosling’s is growing at a very healthy rate, but
we’re way behind the major brands,” he says. This is due
partly because Gosling’s started exporting outside of
Bermuda in the 198Os, and because it’s not a well brand
aiming for high volume at discount prices, he explains.
“Boston is a primary market for Gosling’s,” he adds,
stressing the importance of training account staff. Print
and outdoor advertisements along with event sponsorships are
also in the mix.

“Rum is on fire.
Largely speaking, if you’re the type of person that looks
for flavorful, exotic items, you’ll look for that in other
things. It’s all about intensity of flavor, quality and
smoothness,” says Joe DeTrolio, Manager for Rum Runner Wine
& Spirits in Mansfield. “I’m seeing more demand from
customers asking me to bring in unique rums, such as Zaya
and Pyrat Pistol. I fill customer demand, buy an extra
bottle and it flies off the shelf. Without any publicity or
discount, customers grab them. They say ‘I saw this online.
Can you get it?’ They have no idea what it’s like but they
want to buy it,” he says.

“There is no
question the category is in a good place to take off,” notes
Tom Tesauro, Massachusetts Manager for On-Premise with
Fortune Brands, which handles Cruzan rum, a brand that grew
almost 21% in 2OO5. “We’ve done a good job of educating
consumers in other categories. People are clearly drinking
better. Rum is primed to follow,” he says, pointing to the
“explosion” of imported vodkas. “You go from a discovery
brand to mainstream. It’s happening in a big way with
tequila. The thought of paying $3O for a 75Oml bottle of
tequila 15 years ago would have occurred to very few
consumers. Today, it’s different. I think the same thing
will happen to rum,” he says. “Now, consumers are so much
more aware of and educated about products. I think rum is on
the verge of being discovered,” he says. What’s needed for
rum to make the leap to widespread acceptance is both trade
and consumer education, says Tesauro. “We really have to
work both avenues and explain the differences, the aging
process and regional variations in rum.” He predicts this
outreach will accelerate dramatically this year, especially
for Cruzan’s Single Barrel Estate rum, but less so with the
brand’s flavored rums.

“With Cruzan, we
knew we had a winner. The rum category is one of the
fastest-growing and we wanted one that fit our company,”
says Jeffrey Moran, spokesman for Absolut Spirits Co., which
owns Cruzan. “Cruzan hit the mark. It was a great brand with
great growth potential and we felt strongly that the brand
was on the right track. With Mojitos being on fire, we think
that they’ve helped people open up to rum. That, along with
the overall premiumization of spirits and people’s present
tendency to indulge in ‘great’ cocktails have helped fuel
this growth,” he says.

“We’re going to
actively market the portfolio via advertising, public
relations, on-premise promotions, and trade
awareness/education to ensure that everyone knows why and
how they should be enjoying this terrific rum brand,” Moran

consumers is the real key, in retail where legal and in the
on-premise channel,” says Bill Dabbelt, Vice President of
Sales and Marketing for White Rock Distilleries, whose rum
brands include Barbarossa and Cabana Bay. “We believe the
rum category is growing because today’s consumer is looking
for good tasting products and Rum definitely fits that
profile. Rum is very versatile and mixes extremely well. The
premium upper end of the rum category is being enhanced by
all the excellent upscale rums entering the market.” he
points out. From 2OO4 to 2OO5 Cabana Bay sales fell 11
percent, while Barbarossa’s increased by 33 percent. Dabbelt
says this was due mainly to changing Cabana Bay’s name from
its original name of Cabana Boy, pulling back all marketing
of the brand during the transition. Despite the company’s
intention of attracting female consumers to the brand,
Cabana Boy generated great appeal among gay consumers. “It
ended up being controversial, so we decided to make changes
to a more neutral concept,” he explains.

Nearly two years
ago Moet Hennessy USA spent millions of dollars to launch 1O
Cane, which it hailed as the first luxury light rum in a
category lacking such a niche. A 75Oml bottle retails for
$35 to $41. “Convincing buyers of the value of the rum and
that 1O Cane really does make a better cocktail was one of
our biggest challenges, but I think we have overcome that
hurdle. By getting the word out about the taste of 1O Cane
and that the care with which it is produced is the reason
why it tastes better than other light rums, our customers
have a better understanding of our positioning as a luxury
rum,” says Rob Bryans, Vice President/Marketing for 1O Cane
at Moet Hennessy. “Creating awareness and a keen
understanding of a new rum is no easy task. We accomplished
this by educating journalists, the trade and the public
through tastings and advertising. Customers are beginning to
understand that the best rum cocktails start with the best
rum and the freshest ingredients,” he continues.

“Consumers are
experiencing ‘vodka fatigue’, and many are moving to rum, or
at least experimenting with rum. The popularity of the
Mojito is a key driver, but let’s not forget that the most
popular rum drink is still rum and Coke. Creative
mixologists around the country are helping to propel the rum
category by introducing new consumers with discriminating
palates to rum, especially light luxury rums like 1O Cane,”
Bryans states. “When dealing with a lower quality spirit,
the goal is to minimize the poor flavor by covering it up
with a mixer. The smooth texture of 1O Cane, along with its
appealing flavor profile, is the perfect base spirit for
cocktails,” he says. “Rum is growing at a rate of 5.5%,
faster than vodka. Flavored rum and high-end rums are
driving the growth,” he remarks.

“We see a return
to the classic cocktail and less emphasis on frozen
frou-frou cocktails. With all of the wonderful fresh
ingredients that are now available in most parts of the
country, it is easy to make a simple classic Daiquiri,
rather than the frozen version. Fresh lime juice is not
difficult to obtain and it is very easy to make simple
syrup. Bartenders today are getting very creative,
concocting all kinds of delicious syrups and infusions just
like great bartenders did in the 19th century. More and more
bars and restaurants are serving the Mojito and we feel that
its success will continue to grow in 2OO7, therefore rum as
a category will continue to grow,” says Bryans. “Rum is
suffering from a poor image,” he continues. “Consumers like
the taste of the product, but not the image associated with
frozen drinks and spring break. At the same time, rum is
synonymous with relaxing by a pool during a Caribbean
vacation, good times and lively gatherings. We tend to drink
rum when we go away for a vacation, but go back to vodka
when we get back home. 1O Cane is single-handedly recrafting
the image of rum to one of relaxation and luxury to appeal
to a more sophisticated level of consumer that may not be
drinking rum at the present time. We are communicating this
new message on a daily basis.”

“Over the past
year, the rum category has continued to advance
significantly and there’s every indication that this growth
will continue in the coming year. At the high-end where
Pyrat competes, new entrants into the category continue at
higher and higher price points, including those selling for
several hundred dollars per bottle,” comments Matt Carroll,
Brand Manager for Pyrat rum at Patron Spirits. “Flavored
line extensions have helped drive the category, but
certainly there’s no doubt that the Mojito has contributed
significantly to rum’s popularity and growth. As a matter of
fact, many industry experts are predicting that the Mojito
will become the next margarita,” he says, a trend that may
already be occurring.

“In the summer
to early fall we sell more Mojitos than anything else, even
margaritas,” says Stephen Clark, a bartender at Cuffs in
Jurys Hotel Boston. “In the winter, they still sell well.
People love to watch them being made and then they order
one. With people traveling to Bermuda, we also get a lot of
call for Dark ‘n Stormys,” he says. For the occasional
customer asking for a smooth rum they can sip on, Clark
often suggests Pyrat XO.

“The rum segment
is doing extremely well, advancing by over 1.2 million cases
in 2OO5, eclipsing the 22 million case mark in the US,
second only to tequila for growth rate. Preliminary sales
data indicate an even higher level of growth for 2OO6,” says
Carroll. “The Pyrat rum line is up 1O5 percent over 2OO5.
This is one of the top growth rates for ultra-premium rum in
the US Pyrat ‘Pistol’, which represents a small segment of
the total Pyrat line, was up 11% over last year in the US,”
he notes. As for flavors, Carroll allows their importance
for attracting people to the rum category. As their taste
for rum grows more sophisticated, “People begin to recognize
and appreciate ultra-premium rums like Pyrat,” he states,
adding that this class of rum is, “similar to single malts
and tequilas in that it is a barrel-aged

“A similar event
occurs with our tequila, Patron. It’s seen being promoted by
celebrities in movies, television, music and media of every
sort. Our brands, both Patron and Pyrat, are an affordable
luxury,” he says. For the moment, “Most of our marketing
efforts for Pyrat rums are geared around trade programs. We
are trying to build enough distribution to warrant
traditional consumer advertising. “I’m a big fan of consumer
events,” says Mount Gay’s Schuessler, pointing to the Aspen
Food & Wine Festival. “Events like that are key for any
brand to educate consumers on a one to one basis.” Sailors
are Mount Gay’s primary target consumer, he notes, pointing
to the company’s sponsorship of Key West Race Week and other

The majority of
the budget is used on value-added packaging and consumer
event sampling, Carroll remarks, explaining “With Pyrat we
have a real opportunity to educate consumers. Rum is
traditionally mixed with fruit juices or cola, but Pyrat’s
taste profile is entirely different than the white rum that
many consumers are used to. With the ultra-premium rum
category, these products are much better suited to be served
straight up or on the rocks to sip and savor.”

As for the trend
toward premiumization, Dabbelt says, “Any rum marketer
looking to appeal their brand to the premium tequila or
single malt consumers needs to be aware of product
differentiation, origination of product, packaging and, of
course, premium pricing. To succeed at the high end of the
category, rum products need all these elements to succeed.”
Adds Schuessler: “I think it’s a gradual turning point we’ve
been on. All things lead to that.” Dabbelt cautions,
however, “It is important to remember that rum with cola
still remains the leading cocktail made with rum for decades
now, including silver rum, spiced rum and, to some extent,
coconut rum too.”

All signs point
to rum as a category poised for a sharp sales spike. As
always, smart marketing, product training and an
understanding of target consumers are among the factors that
could prove pivotal to rum’s continued success.