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Bacardi Targets Cognac, Whisky Drinkers With Premium Portfolio Revamp

April 3, 2018

Bacardi is looking to bring more consumers into the high-end rum category with a major revamp of its upscale range. The rum giant has added two new premium offerings—Bacardi Añejo Cuatro and Gran Reserva Diez—to the portfolio of its flagship brand. According to Bacardi, the move is expected to tap nascent trading-up trends within the U.S. rum category, which, thus far, has premiumized at a far slower pace than other spirits segments like Tequila and whisk(e)y.

“It’s no secret that rum has been on the decline for the past 10 years. But where we’re seeing growth is within the premium side of the category,” says Bacardi vice president Ned Duggan. “There’s massive opportunity, as rum is the final spirits category whose volume remains predominantly within the standard segment. Only 15% of the value of the rum category is at the premium-plus level.”

The newly launched Bacardi Añejo Cuatro and Gran Reserva Diez retail at $20 and $40 a 750-ml., respectively. They join Bacardi’s existing Gran Reserva Limitada ($100) and Reserva Ocho ($30) labels, with the latter also receiving a packaging update as part of the portfolio refresh. Reserva Ocho has a current U.S. volume of roughly 30,000 cases, while Gran Reserva Limitada sells between 500 to 1,000 cases annually. The revamped portfolio will be targeted toward existing spirits consumers in the 25- to 34-year-old age range, with a focus on metropolitan areas and people who already consume Cognac and whiskies.

Bacardi’s core portfolio, which includes its Superior, Gold, Black, and flavored rums, retails in the $15 range and accounts for the vast majority of the brand’s business. The brand also plays in the luxury rum space with its Facundo Rum Collection, a range of aged sipping rums introduced in 2013. The Facundo Rum Collection lineup features four expressions—Neo, Eximo, Exquisito, and Paraiso—priced at $45 to $250.

Far and away the largest rum brand in the U.S., Bacardi has faced an uphill battle in the market of late. The franchise slipped by 4% to 6.7 million cases last year, according to Impact Databank. The overall rum category was down 1.5% to just under 22.5 million cases.

Bacardi isn’t alone in sensing a new opportunity to premiumize the rum market. Proximo’s The Kraken (around $20) continues to advance, nearing 400,000 cases on 4% growth in 2017. Likewise, the five leading super-premium rum brands in the U.S. (retailing at $25 and above)—Maison Ferrand’s Plantation, Diageo’s Ron Zacapa, Destilerías Unidas S.A.’s Diplomatico, Shaw-Ross’s Pusser’s, and Bacardi portfoliomate Pyrat—collectively rose 29% last year to 204,000 cases.—Christina Jelski

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