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Captain Morgan: Super-premium rum category ‘bizarrely underdeveloped’

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By Ben Bouckley+

06-Jan-2014

Better quality spiced rums are growing strongly in markets such as the US and UK, according to WIRSPA (Picture: JensU/Flickr)
Better quality spiced rums are growing strongly in markets such as the US and UK, according to WIRSPA (Picture: JensU/Flickr)

Diageo brand Captain Morgan says it is ‘bizarre how underdeveloped’ the global super-premium rum category is but insists it’s only a matter of time before it catches fire.

Captain Morgan global brand director, Russell Jones, was quoted in the West Indies Rum and Spirits Producers’ Association (WIRSPA) recent report ‘A Decade of Rum’, which analyzes the rum market over the past decade.

IWSR predicts super-premium rum volume will rise 50% by 2017, driven by spiced varieties that have doubled sales in the past 10 years and now account for 8% of the total rum market, and appeal to younger drinkers.

Jones says rum successfully marries the energy of white spirits with the tradition and authenticity of dark. “There is no reason why the super-premium area could not be much larger than it is today. It is not so much a question of ‘will that gradually change’ but rather ‘when is it going to explode?’ he says.

“When the super-premium rum area begins to catch fire it won’t be gradual – it will be pretty quick and dramatic,” Jones adds, in the Just-drinks/IWSR Global Market Review of Rum (May 2013).

‘Maverick’ rum reputation grabs some

WIRSPA says that higher quality rum – driven by global players but also local producers building export sales with better packaging, liquid quality and marketing – is dispelling rum’s reputation as a ‘maverick category’ lacking regulation.

This reputation actually appeals to some, WIRSPA admits, but it insists that standards for authentic Caribbean rum are important, hence its own marque of authenticity regarding provenance and quality.

“We know that consumers are actively looking for products with stories of provenance and quality behind them, and that certainly applies to the cocktail bar,” the report authors write.

Pinpointing trends in important EU markets, WIRSPA notes that Spain is one of the biggest with 3.929m nine-liter case sales per year (IWSR) despite its economic problems.

Premium Dominican rum brands Brugal and Barceló account for over a third of the market, and are still investing in it given potential for future growth, despite predominantly young and economically pressed Spanish drinkers currently trading down to cheaper alternatives or different categories.

UK market acts as showcase…

In the EU’s second-biggest market for rum, Germany, the category is growing as the large brands adopt lifestyle positions, premium positions and invest in sipping rums.

France is dominated by rums from the nation’s overseas territories, but WIRSPA says the category is underdeveloped (only 8% of total spirits), but premium and super-premium rums are growing (36% from 2010-2011) in a market where white rum account for two thirds of 3.108m case sales/ year in 2012.

WIRSPA says the UK has seen a rapid growth in spiced rum sales (21% volume share) over the past five years, with smaller brands helping ignite the category, while a cocktail bar trend (even spreading to pubs) is pushing “bespoke infusions and trendy garnishes”.

The premium off-trade sector is also growing, as consumers trade up at home instead of going out, and despite relatively low consumption vis-à-vis Spain or Germany (2.767m cases in 2012) WIRSPA says the UK remains an important focus for brands by “acting as a showcase for Middle East and Far Eastern markets”.

1 comment (Comments are now closed)

not sure if Captain Morgan

would be defined as "super premium" by anyone's definition, but it's very clear that the rum category is underdeveloped, especially in the US.

look at the development of premium+ ($18-24 per 750ml in vodka and gin:

The #1 vodka is priced around $14 per 750ml (Smirnoff) and #2 vodka is priced around $20 per 750ml (Absolut). Absolut sells roughly half of Smirnoff.

The #1 gin is priced around $14 per 750ml (Seagram's) and #2 gin is priced around $20 per 750ml (Tanqueray). Tanqueray sells roughly half of Seagram's.

The #1 rum is priced around $14 per 750ml (Bacardi) and #2 rum is….

Captain Morgan, priced around $15 per 750ml, is certainly not at that $20 premium+ level.

There is no rum brand comparable to Absolut or Tanqueray in terms of premium pricing AND volume. Perhaps Tanduay Asian Rum will become that brand, or maybe Atlantico, Botran, Brugal, Caliché, Caña Brava, Diplomatico, Matusalem, Mount Gay, or Santa Teresa will be the one to get there eventually.

Super Premium is tough with rum. Zacapa has been the most successful so far, but even they keep dropping price and only sell a drop in the rum bucket. And remembering the flameout by Sidney Frank with Tommy Bahama and LVMH with 10 Cane. My guess is Grey Goose owes a lot to Absolut moving people up the ladder.

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Posted by Cort Kinker
09 January 2014 | 22h37