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Rum Marketers Renew Premiumization Efforts, Emphasizing Brown Spirits Link

July 30, 2012

Despite its status as the second-largest spirits category in the U.S., rum has long fought an uphill battle in its efforts to entice consumers up the pricing ladder. But the category has continued to grow through the difficult economic period—adding nearly 4 million cases since 2005—and the strong performance of spiced, higher-proof and aged rums is presenting new opportunities to nurture a more upscale image.

“Of all the categories, rum is the least premiumized,” says Russell Jones, Diageo’s global brand director for Captain Morgan. “But at its best rum brings the tradition and authenticity of Scotch married with the vibrancy of vodka. I’d fully expect us to duplicate what we’ve seen within Scotch, within vodka and to a certain extent within gin, and see more authentic and more ultra-premium rums. We intend to be a part of that.” The recent rollout of Captain Morgan Black, a higher-proof (47.3% abv), higher-priced ($22 a bottle) extension, is part of Diageo’s strategy to attack the super-premium rum segment where fast-rising high-proof upstarts like William Grant & Sons’ Sailor Jerry and Proximo’s The Kraken have lately proliferated.

Rémy Cointreau-marketed Mount Gay has taken a similar tack, unveiling a 100-proof Black Eclipse variant ($25) last year. “Higher-proof and dark rums are resonating with consumers and mixologists,” says Glen Tibbits, global vice president, marketing for Mount Gay. “Super-premium rums tend to be aged, brown spirits consumed as sippers, and not just for cocktails such as the Mojito and other rum-based classics. Current rum consumption trends mirror those of other brown spirits, particularly whiskey.”

Among those playing up the authenticity of aged rums are Appleton Estate (handled by Kobrand) and Flor de Caña (Campari America). “We’ve shifted a lot of our focus and resources toward building our Grand Reserve 7-year-old, which is priced at about $20 a bottle,” says Samuel Fitch, Flor de Caña’s regional manager for North America. “Value over volume became the dominant theme for us in 2011. For 2012, our sales are up 20% versus last year.”

 

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