WHITE SPIRITS – RUM: The white direction

The rum category is in decline, with only golden rum showing any growth. However, white rum brands are showing promise by fighting Bacardi on grounds of quality rather than price, writes Alice Lascelles

All the signs would suggest that rum is in rude health. The last 12 months have seen the arrival of a raft of new upmarket rum bars, including Artesian and Mahiki, the Mojito is the biggest-selling cocktail in the UK, and, this October, London hosted RumFest 2007, the first-ever rum festival in Europe. Yet a closer look at the figures tells a different story. Only golden rum, which accounts for a mere tenth of the market, has managed to put in any significant growth, with off-trade sales leaping 28% in the last year.

White rum, meanwhile, is in decline on every front. Down 2% in the off-trade, and 10% in the on-trade, it is putting a major drag on the total rum market, where it accounts for more than two-thirds of sales.

So where does the problem lie? In a word, Bacardi. With around 90% of the UK white rum market under its belt, it more or less is the UK white rum market. Which is great for Bacardi, but not so good for the category when you realise that most people drink it without even knowing it’s a rum. “The number of people who still come in and ask for a Bacardi and Coke,” laments Richard Woods, manager of rum bar chain El Floridita. “I’ll say to them, ‘We don’t have Bacardi Carta Blanca but we have Bacardi 8.’ And they’ll still say, ‘I don’t want rum, I want Bacardi’.”

It’s a positioning which has helped Bacardi become one of the biggest brand-calls in the world, capable of stealing market share not only from other rum brands, but from other white spirits as well.

But Bacardi’s failure to connect with its roots as a rum is now coming back to haunt it, as consumers in search of a heritage fix turn to golden and dark rums instead. “In the top-end on-trade the big challenge in perception is that white rum is inferior to gold and dark rum – people see gold and dark as having more heritage,” admits Bacardi’s UK marketing director Liam Newton. “So we have a long-term commitment to enhancing perceptions of white rum and how it’s made. It’s a big job we’ve got to do on behalf of the whole white rum category.”

Earlier this year, Bacardi made its first step in this direction by dropping the (“meaningless”, according to Newton) “Carta Blanca” tag in favour of “Superior”, a classification created by 19th century Spanish rum-makers for their higher-quality rums.

In vodka’s footsteps
A new campaign entitled Building Belief has also been launched in the on-trade to communicate Bacardi’s Cuban roots to a generation of sceptical bartenders, with the emphasis on Cuba’s Mojito cocktail.

“Is there life beyond Bacardi and Coke? We hope there is,” says Newton, citing the Made to Mix campaign which also took place this summer as part of the brand’s biggest-ever on-trade push. The promotion offered music festival-goers the chance to win prizes if they tried Bacardi with one of three new mixers – cranberry, orange or ginger ale. “The vodka category has done a very good job of communicating its versatility, and that’s something we can learn from,” says Newton.

One area in which Bacardi possibly followed vodka a step too far, however, was in the flavours department, with the launch of raspberry and apple variants last year. “It’s fair to say it’s not been performing up to expectations and we’ve been reviewing the launch in the last 12 months,” admits Newton, who nonetheless maintains that student sampling will continue to take place.

Which brings us on to the question of choice, or the lack of it. The Bacardi behemoth has left other brands precious little breathing room, forcing some, such as Havana Club, to abandon the sector altogether. In fact, so keen are they to distance themselves from the white rum category, they refused to be interviewed for this piece. Those that remain – including the iconic Wray & Nephew Overproof, best described as the Marmite of the rum world, and its stablemate Appleton – survive largely thanks to a strategy of keeping it real, combined with a loyal following of rum aficionados and Jamaican ex-pats.

“Put it like this,” says Allen Daly, manager of Soho spirit merchant Gerry’s, “I have about 170 rums here but only about 15 or 20 are white. It’s a very difficult category as there are only about three or four really good quality ones, the rest are basically just a neutral spirit for mixing. We sell a lot of rum but most people come in here looking for sipping rums.”

One white rum which is trying to change this is St Lucian newcomer Elements 8, one of a handful of white rums that Daly singles out for praise. Created by Andreas Redlefson and Carl Stephenson, both longstanding players in the rum trade, Elements 8 Platinum and Gold combine the production values of a top-quality rum with the packaging, positioning and price point, £30, of a luxury vodka.

“It is radically different, and when we launched a lot of people said, ‘That’s not rum packaging’,” says Redlefson. “Some people say we’re just apeing vodka but it was more a case of looking at a range of brands we liked, and aiming for a New York/London, bourbon drinking, cocktail bar kind of feel.”

And the approach seems to be working. Eighteen months in and Elements 8 is now the best-selling rum in Selfridges, with listings in pretty much every major rum bar in the UK, all achieved on a minimal marketing budget. “Instead of advertising, we’ve focused on more below-the-line activity,” says Redlefson, “working with bartenders, sponsoring events, running cocktail competitions. For the bottle sale market we’re also looking at collaborating with a top-end mixer such as Fever Tree.”

And while the brand won’t be giving Bacardi sleepless nights just yet – sales in Elements 8’s key markets (Germany, France, Scandanavia, Australia and the UK) currently stand at around 4,000 cases, with 95% of this in the on-trade – sales have still outstripped the company’s first year projections by 50%.

White rum newcomers
Certainly Redlefson is not oblivious to the fact that Sidney Frank, the company that created Grey Goose, recently launched a new pair of luxury rums in the US which look remarkably similar. “I would consider it [Tommy Bahama] a testament to our success,” he remarks.

Last September also saw LVMH launch a luxury white rum called 10 Cane, priced at a whopping £37. Made in Trinidad from pressed sugar cane, rather than molasses like most rums, it is the first product that the company has ever created from scratch, according to senior brand manager Charles-Edouard Delelis-Fanien. So far it has kept a surprisingly low profile, apparently as part of a “seeding” programme, which has so far only seen it reach a handful of top bars, and Selfridges.

But Ian Burrell, organiser of RumFest 2007 and manager of London rum shack Cottons, suggests that the low profile is more a result of having seriously misjudged the market. “It’s a beautiful product, but perhaps they forgot about the liquid?” he ponders. “When it launched they sent a very beautiful rep round here who proceeded to tell us about how to make the ultimate rum and coke with it. I was like, ‘Sweetheart, at that price that ain’t gonna happen!’“

Possibly a more realistic proposition is a new white rum from El Dorado, which hits the UK in February. Created in partnership with Inspirit Brands, the new Guyanan rum will aim to plug the price gap between Bacardi and Elements 8. “We’d like to think of it as an aspirational pouring brand,” says Inspirit’s sales and marketing director, Stuart Ekins. “I think there’s a huge market for people trading up there. I think the problem so far has been that other white rum brands such as Appleton have been trying to fight Bacardi purely on price – whereas what we really need is people fighting Bacardi on quality.”

Ekins continues: “For us white rum is what’s most important – for all the small growth you see in golden and dark rums, white rum is what really drives the category. And the decline we’re seeing at the moment is at the cheaper end I think – the white rum category is currently driven by cheaper brands. So there’s definitely more work to be done.”

© db November 2007