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Rum Giants Bacardi And Captain Morgan Double Down On Millennial Appeal

July 5, 2016

Despite attempts to fuel volume growth and jumpstart premiumization trends, the rum category has failed to make meaningful progress in the U.S. market, declining by 1.8% to 23 million cases last year, according to Impact Databank. Leading players Bacardi and Captain Morgan have struggled, collectively shedding more than a million cases since 2010, even as the overall U.S. spirits market grew by nearly 20 million cases during the same period.

After years of lackluster results, Bacardi and Captain Morgan’s combined share of the rum category has fallen from over 65% a decade ago to around 57% in 2015. Still, with the two brands continuing to account for a solid majority of rum consumption, their performance largely determines the direction of the overall category. Brand owners Bacardi and Diageo North America are now focused heavily on reversing their brands’ declines with a raft of new initiatives.

Bacardi, which slipped 2.7% to 7.1 million cases in the U.S. last year, has ramped up emphasis on the core brand, recently unveiling a $25 million campaign targeting millennial consumers and the “party occasion.” Running under the tagline “There’s Nothing in the Way,” the push marks the brand’s largest-ever promotional spend. Bacardi is also looking to attract young LDA consumers with its recent launch of new Grapefruit and Raspberry flavor extensions, and it has backed its Oakheart spiced rum offshoot with a millennial-targeted campaign, titled “All In, All Heart.”

Mauricio Bermudez, brand director for Bacardi rum in North America, tells SND that connecting with the younger set is crucial to the future of the brand. “Light and flavored rums are still relevant among millennials, especially as an entry into the category,” he explains. “These consumers favor easily mixable spirits.”

Second-ranked rum brand Captain Morgan has also been losing ground, posting a 4.5% volume decline to 6.2 million cases last year. Under pressure from a bevy of spiced rum newcomers, Captain Morgan is taking a different tack with its recent launch of Captain Morgan Cannon Blast. A 35%-abv blend of rum, citrus and chipotle and jalapeño pepper, the new entry is targeted toward shot consumption, going up against popular shot-focused brands such as Fireball.

Matt Bruhn, Diageo’s senior vice president, release brands, says that, like Bacardi, Captain Morgan is angling for a renewed role in consumers’ party plans. “Cannon Blast is our re-introduction into the shot occasion, which represents a shift in the brand’s approach as we focus on Millennial recruitment to build back our leadership as the number-one party spirit,” he says. —Christina Jelski

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