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Innovation Spices Up Rum Category, As Upstarts And Established Brands Add Flavor

June 25, 2013

Innovation is providing a bounce to the U.S. rum market, as the success of a raft of flavor extensions, spiced upstarts and high-proof entries are offsetting relatively soft results for the category’s most established core offerings. Rum shipments increased by 1.5% to 25.9 million nine-liter cases in 2012, according to Impact Databank, while depletions of the top 10 brands advanced by an aggregate 1.7% to nearly 22 million cases (including flavors).

Category leader Bacardi eked out a 0.5% bump to 9.54 million cases, but its spiced Oakheart spinoff is rising sharply. Launched in 2011, Oakheart marked the first major mainstream spiced entry for Bacardi, which already had both sub-premium (Castillo Spiced) and super-premium (Seven Tiki) spiced offerings, though either had yet to build a large presence. Last year, Oakheart was up nearly 20% to hit 171,000 cases. Additionally, Bacardi has remained active within the flavored rum segment, adding Bacardi Pineapple Fusion ($14.99 a 750-ml.) to its lineup in February.

Captain Morgan, which has basically defined spiced rum in the U.S. market since its launch more than three decades ago, last year extended one of the most impressive upswings in industry history. The Diageo brand tacked on another 95,000 cases to reach 6.35 million cases. Last year, the franchise introduced Captain Morgan Black ($22 a 750-ml.), a higher-proof and higher-price extension designed to appeal to brown spirits drinkers.

Perhaps no brand in the U.S. spirits market has innovated as adroitly in recent years as Pernod Ricard’s Malibu, which rose by 7.2% to more than 1.8 million cases in the U.S. in 2012, largely because of new product activity. In 2011, the Pernod Ricard brand introduced Malibu Black ($16 a 750-ml.), a higher-proof, male-targeted rum, and in 2012, the brand rolled out Malibu Red ($19 a 750-ml.), a rum and Tequila hybrid. After a relatively brief time on the market, both expressions have surpassed the 100,000-case-mark. This year, Malibu continued its new product push with the launch of low-calorie Malibu Island Spiced and Malibu Cans, a new ready-to-drink cocktail range. The brand also debuted its first-ever dessert-inspired flavored offerings, Malibu Swirl and Malibu Sundae ($14.99 a 750-ml.).

Besides Malibu, the U.S. rum market’s biggest gainers in 2012 included spiced rums Admiral Nelson from Heaven Hill Distilleries (+10.3% to 800,000 cases) and William Grant & Sons’ Sailor Jerry (+6.8% to 710,000 cases), as well as Proximo Spirits’ Kraken, a high-proof (47% abv) product that jumped by 50% to 225,000 cases. It certainly appears that innovation is changing the face of the U.S. rum market.

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