StateWays - July/August 2015

StateWays is the only magazine exclusively covering the control state system within the beverage alcohol industry, with annual updates from liquor control commissions and alcohol control boards and yearly fiscal reporting from control jurisdictions

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27 StateWays ■ ■ July/August 2015 and needs," says Arvind Krishnan, vice president and brand managing director for the rum category at Bacardi U.S.A. Some industry observers think that rum's rise has been some- what hobbled by its fanciful reputation, but that is changing. "Rum is no longer about pirates, tropical beaches and tiki; that image is shifting. Rum today is more about the craft aspect," says Marlana Persson, marketing coor- dinator for Niche Import Co. The New Jersey supplier was recently ac- quired by the Dutch group Marussia Beverages, which brought with it the Mezan label of aged rums. Niche also imports Stroh, an over-proof rum from Austria. "Rum has a party reputation," adds John Eason, COO & executive vice president at Serrallés USA, whose fl agship is the Don Q brand. "What's so exciting to see is that consumers are graduat- ing from those occasions and discovering its elegance." "Pirates or beachside, that's where the category has been. But now we are starting to see brands talking about rum in a differ- ent way - talking about the production process, the impact of tropical aging, the terroir," says Andrew Floor, vice president of marketing for dark spirits at Campari America. The company's portfolio includes venerable brands Appleton Estates, Wray & Nephew and Coruba. Growing in the Right Direction Compared to other spirits segments, rum's expansion has been less than robust; however, it seems the category is moving in the right direction. "Although rum consumption has been relatively fl at over the past year, it continues to be the second-largest spirit category, behind only vodka, so the overall outlook is quite positive for brands large and small," says Brendan Lynch, senior director of rum and cordials at Beam Suntory. Mid-sized players, like Cruzan, expect continued notable growth, he adds. According to the Distilled Spirits Council (DISCUS), the rum category overall was down 1.5% in volume last year at 25 million 9-liter cases, while revenues were nearly fl at at -0.8%, totaling $2.4 billion. Signifi cantly, super-premium rum grew gangbusters, nearly 10% by volume and 12% in revenues. Greg Cohen, VP of Corporate Communications at Patrón Spir- its, is heartened by this evidence of premiumization. "We'll likely see a similar trend this year, with ultra-premium brands like Pyrat outpacing the category," he predicts. Patrón markets the Pyrat Cask 1623 and Pyrat XO Reserve labels. Volume has consistently grown every year, says Cohen, as more trade and consumers discover the brand. "Rum is continuing to perform well and attract new con- sumers to the category each day. This is especially true in the ultra-premium tier, where people are learning to appreciate the nuances and complexities in quality sipping rums such as a brand like Zacapa Rum," says Daniel Kleinman, vice president of rum for Diageo North America. Study in Brown Many rum experts believe that there are lessons to be learned and tactics to take from brown spirits, especially the red-hot whiskey category. Indeed, there are many parallels in fl avors and aromas that can be drawn between barrel-aged rum and whiskey. When enthusiasts have had their fi ll of Bourbon and LEADING BRANDS OF RUM (Thousands 9-Liter Cases) 12/13 Brand Supplier 2013 2014 % Chg Bacardi Bacardi USA 7,831 7,452 -4.8% Captain Morgan* Diageo 5,730 5,755 0.4% Malibu Pernod Ricard USA 1,886 1,845 -2.2% Admiral Nelson Heaven Hill Brands 820 836 2.0% Cruzan Rum Beam Suntory 741 750 1.2% Sailor Jerry William Grant & Sons 733 738 0.7% Castillo Bacardi USA 777 722 -7.1% The Kraken Proximo Spirits 325 424 30.5% Captain Morgan's Parrot Bay Diageo 390 355 -9.0% Ronrico Beam Suntory 377 342 -9.3% Total Leading Brands 19,610 19,219 -2.0% Others 7,220 7,211 -0.1% Total Rum 26,830 26,430 -1.5% (p) Preliminary. (*) Excludes Parrot Bay. Source: Handbook Advance 2015 Rum has variety greater than just about any other spirit, ranging in character from white to gold to dark. RUM

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