Stateways July-August 2011

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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As the summer continues to heat up, rum producers are slaking consumers’ thirst with cool products and cooler programs. By Michael Sherer I t’s been nearly a hundred years since rum-runners plied the azure waters of the Caribbean between Bimini and Florida. Today, more rum is running than ever — legally now, of course — from various ports of call to the U.S. Last year, more than 25.5 million 9- liter cases of rum were sold in the U.S., a 2.2% increase over 2009. And this year the numbers look even better. The rum category should see continued steady growth in the foreseeable future for several reasons. The economic recovery, as slow as it’s been, bodes well for both the industry and the rum category. Like many other spirits categories, consumers are becoming more educated about rum and discovering new uses for it. And rum producers are introducing new products and pro- grams designed to boost sales and bring new drinkers to the category. At the same time, economic and social trends of the past several years have brought changes to the category. Savvy producers are adapting to the shifting winds and meeting the challenges head-on. “All spirits categories are slowly coming out of the recession,” said Toby Whitmoyer, vice president, StateWays s s July/August 2011 brand managing director at Bacardi USA, “giving us cautious optimism. We see sequential improvement this year, but slow. The on-premise market in particu- lar won’t be gangbusters, but it will certainly be better than last year.” Activity within the rum category, however, is anything but slow. Some segments are experiencing significant growth, though individual brands within segments may be The newly introduced Malibu Black features a higher proof level (70 proof) than the popular Malibu brand. trending up or down depending. “The big players aren’t moving much,” said Lisa McCann, brand direc- tor for Malibu. “The category is really being driven by value brands and the high-end right now.” “Last year the category was up a cou- ple of points, and we saw less discount- ing, which is a good sign,” said Greg Levine, brand manager for Coruba at Kobrand. “A lot of the growth that has occurred is in the spiced rum segment.” Movement within the category 35

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