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Impact Databank: Rum Giants Bacardi, Captain Morgan Lose Ground, But Aim For Revival

February 2, 2016

The U.S. spirits market’s top 25 spirits brands achieved solid growth in 2015, but the same can’t be said for the market’s leading rum brands.

Bacardi (-0.8% to 7.2 million cases) and Captain Morgan (-0.5% to 6.4 million cases)—the market’s second- and third-largest spirits brands, respectively—both lost ground in 2015. In fact, the duo is now smaller than it was five years ago, even as the overall spirits market has grown by nearly 20 million cases during that time. While Bacardi and Captain Morgan continue to dominate the U.S. rum market with a combined share of more than 60%, what little excitement the category has generated in recent years has come from upstarts like Admiral Nelson’s, Cruzan, Sailor Jerry and The Kraken.

Still, Bacardi USA and Diageo North America aren’t sitting back while their flagship rum brands struggle. Late last year, Bacardi launched a new ad campaign aimed at reviving its trademark brand. Featuring the tagline “Nothing in the Way,” the new campaign is said to represent the brand’s largest-ever promotional spend, with the U.S. outlay estimated at upwards of $25 million. Targeted toward consumers within the LDA to 25 age range, the campaign includes TV and digital spots and aims to reestablish Bacardi’s presence within what the company calls the “party occasion.”

“This campaign starts the journey of Bacardi owning specific consumption occasions,” says Fabio Di Giammarco, global vice president for Bacardi rum. “When Millennials shop for spirits, it’s mainly for the party occasion. This is the brand’s way of putting its (message) on the table in a contemporary, modern way, in an area and occasion that we should have never left.”

Bacardi is also undertaking a new effort in the spiced rum category, backing its Oakheart offshoot with a campaign intended to steal share from the dominant Captain. Oakheart’s new positioning is entitled “All In, All Heart,” and is aimed at millennial male consumers. The push emphasizes male camaraderie and exhorts target consumers in key markets to “bench the captain” and join the “Brotherhood of Oakheart.”

Introduced in 2011, Bacardi Oakheart ($15 a 750-ml.) has made inroads in the spiced segment—nearing the 200,000-case mark in recent years—but remains a relatively small player, while brands like Sailor Jerry and The Kraken are also presenting stiff competition in the spiced category.

Meanwhile Diageo has fired a shot at fast-rising Fireball with the launch of Captain Morgan Cannon Blast—a 35%-abv blend of rum, Caribbean citrus and chipotle and jalepeño pepper designed for shot consumption. That play helped Captain Morgan achieve a 2% net sales rise in the six months through December in the U.S. market—which accounts for nearly two-thirds of the brand’s global sales.

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