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Cream Competition: RumChata’s Rise Slows While Baileys Continues To Struggle

October 19, 2015

With the holiday season fast approaching, RumChata continues to steal share in the cream liqueur category from longtime leader Baileys. After earning its third consecutive Impact “Hot Brand” on the strength of a 17.4% advance to 540,000 cases in the U.S. in 2014, RumChata is again expanding this year. However, its rise appears to be slowing.

The 13.5% abv RumChata grew by 12.5% for the 52 weeks ending October 4 in IRI channels. But it was up only 3% in control states through the first eight months of 2015, according to NABCA.

Pewaukee, Wisconsin-based Agave Loco Brands, which markets RumChata, is hoping its new alliance with Brown-Forman accelerates the brand’s growth. In recent weeks, Brown-Forman and Agave Loco forged an alliance under which RumChata is being co-marketed with Jack Daniel’s Tennessee Honey and—in an attempt to steal some of Fireball’s thunder—Jack Daniel’s Tennessee Fire. The year-long campaign encourages mixing RumChata with each of the two Jack Daniel’s products. Bartenders often mix RumChata with Fireball for what’s called the “Cinnamon Toast Crunch” shot.

RumChata became the market’s second-leading cream liqueur brand in 2013, overtaking established players like Carolans and E&J Cask & Cream. Still, Baileys (17% abv) continues to hold a commanding lead in the cream liqueur category. The Diageo brand’s sales are roughly twice the size of RumChata’s in both control states and IRI channels.

However, Baileys continues to struggle in the U.S. market. The brand has been flat or down every year since 2007, and during that time, its annual sales have fallen by nearly 20%. Baileys was essentially flat in control states through August, but down nearly 5% in IRI channels for the 52 weeks ending October 4.

At around $25 a 750-ml., Baileys generally retails for around $1-$2 more than RumChata, although the rivals are priced roughly parallel to each other in some markets.

 

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