LUXURY: RUM – Sugar and spice

Luxury sipping golden rum is doing well in the on-trade, spurred on by the UK’s love of the Mojito. Ben Grant asks whether light and dark rums can replicate this success and grow the category at the premium end of the scale

Those who have proclaimed that rum is “on the edge of something special” have incorrectly made this assertion with such regularity that they could be accused of sounding like a broken record. Indeed, the category is rather like one of your favourite old 12” vinyl LPs. You know the one, that timeless classic with the unfortunate great big scratch in it. Alive with history and authenticity, it promises so much – but just when it’s on the cusp of erupting into melodic grandeur, it skips back to the start, leaving you with a rather frustrated sense of missed opportunity. Rum, similarly, boasts the necessary credentials required for greatness in the sales charts, but some invisible barrier always seems to inhibit it from reaching the heights that it clearly has the potential to achieve. But impressive growth at the premium end of the category suggests that maybe, just maybe, the time is finally ripe for rum sales to surge.

The drip-down nature of the spirits trade means that to predict next year’s mainstream success you should take a look at last year’s goings on at the top end of the on-trade, and at the early-adopting style bars where tomorrow’s trends are seeded, rum has been the spirit du jour for some time now. “Rum has had a real shake up, the brands are doing well and there’s lots of room for developing the category,” enthuses Gorgeous Group managing director Robbie Bargh.

Steve Manktelow, beverage manager at the Ignite group, is in agreement, emphasising that the category is getting plenty of interest from bartenders and consumers alike. Bar goers “are opting for drinks with more flavour”, making their selection based “on what it tastes like, not how it’s branded”. He believes that this shift – which ties in with the broader macro-trend towards food and drink with authenticity and character – is good news for the rum trade. Tellingly, he also points out that whereas the norm in recent years has been for spirits lists dominated by top-end vodkas, a growing number of leading bars are tending to eschew the ubiquitous white spirit and opt instead to list a broad selection of rums. And there’s every possibility that this growth will become self-sustaining, as Cruzan brand manager Victoria Jackson explains. “More brands on shelf and more competition means that the category gets more attention, so consumers become more interested.”

Hearing Manktelow and Bargh’s words will be music to the ears of the rum suppliers. For those that work tirelessly to produce a spirit full of distinctive flavours and complex aromas, the runaway success of defiantly neutral vodka has been a bitter pill to swallow. It’s with barely concealed delight, therefore, that J Wray & Nephew UK brand manager James Robertson reports that consumers are finally beginning to display symptoms of “vodka fatigue”.

The most important word in rum’s armoury is “variety” – the broad category incorporates an unrivalled pool of products for consumers to explore. “What other category can offer so much diversity, such a wide spectrum of brands and variants to grapple with?” asks Carl Stephenson, managing director of Elements Eight. While other drinks categories trade on coming from a specific area, for rum quite the opposite is true; it is produced in a plethora of countries around the world, making it an incredibly complex sector. Rather than being spoon fed brand messages, Havana Club brand manager Jo Spencer points out that “more and more consumers are looking for products that have provenance and authenticity”. Not only does rum service this desire, but it is also a category “where consumers want to discover”. The breath of products available means that for the fast-rising segment

of consumers who have a thirst for knowledge, premium rum is a veritable library of opportunity.

The variety inherent within rum isn’t just based on flavour profile and place of origin, it also pertains to the way it can be enjoyed – making it a highly accessible category, and one where there is plenty of room to trade up. “Rum is a very democratic category,”
says Robertson, “consumers can join the category at whatever level they are comfortable – from the simplicity of mixed long drinks to the connoisseur, there’s something for everybody.”

This unparalleled diversity is undoubtedly rum’s greatest asset – but this immense benefit may be something of a double-edged sword. For while it ensures the category has something to offer everybody, it perhaps also means that it appears to be all things to all people – and that’s hardly going to make consumers feel special now, is it?

Making a mint
The growth of the cocktail culture has been significant in the UK on-trade in recent years, and the Mojito has emerged from the pack as the favourite for UK consumers. This has been great news for the golden rum category which, as the Nielsen stats on page 64 indicate, has enjoyed hearty growth in comparison to its light and dark cousins. While the Mojito has played a sterling role in introducing consumers to rum, the brand owners are hoping that this initiation will provide the impetus to discover more about the cocktail’s principle ingredient. “They want to discover the spirit at a different level,” says Cockspur UK brand manager Pauline Clarke. Having been introduced to the spirit in a broader sense through cocktails, they begin to “want to appreciate the individual quality of their specific brand choice”. It’s notable that more and more cocktail lists now refer specifically to which brand of spirit is included in the mix.

Because of the level of diversity within the segment, “people need instruction to understand the complexity and characteristics that the many brands of rum have to offer”, says Cockspur’s Clarke. Fortunately, the suppliers have recognised this, and it’s an area where they have truly excelled themselves in recent years. Cruzan’s Jackson paid close attention to the competition in preparation for the UK launch of the brand last year, and she reports that, “The brands were really proactive in educating the bartenders and giving them the tools to educate the consumer.”

With more and more bartenders seeing the industry as a valid career option there is an incredible thirst for knowledge, and the rum companies stepped in and spent significant budgets quenching this thirst. The number of different brands that have pursued this strategy and invested in training has created a real buzz around the category, and has also ensured that “there is interest away from the mainstream brands” so that more and more bars “are stocking an eclectic range of rums”. Once this loyalty is built among the bartenders, their infectious enthusiasm soon spreads to consumers. So it comes as little surprise when Manktelow reports that “we’re seeing more and more brand call” in the
rum segment.
 
Shades of success
The current movement in the market indicates that the Mojito craze has got more and more drinkers going for gold. But what of the volume drivers of the category, light and dark rum: can they replicate this success at the premium end of the scale? The jury is out for the time being, but a number of brand owners present a pretty compelling case for the imminent rise of their specific
sub-categories. The success of Elements Eight’s Platinum variant indicates a consumer willingness to trade up within the light rum sector if an appropriate offer is made available.

Dark rum, meanwhile, has a tough job on its hands to shake off the gnarled old sea dog image, but United Brands director Rob Preston is confident that Goslings has the potential to secure success at the premium end of the market. “There’s a stigma attached to dark rum, and it has been the least exciting category in the past,” he concedes. In spite of this Goslings commands a £15 price tag but has still managed to generate 400% year-on-year growth suggesting that, if the brand is positioned appropriately, there’s no reason why dark can’t make the step up to luxury status.

The proliferation of aged product has meant that golden rums have found it much easier to justify premium prices – but the question now is, how high can they go? According to Jackson, during the trial period for Cruzan Single Barrel, “many Cognac and single malt drinkers said they see it as a potential after dinner drink”. While Robertson points out that, not only is the quality of the product up to scratch, but “it’s also more accessible for the palate than whisky and Cognac”. Seeing these categories as genuine rivals is remarkably ambitious of the rum suppliers, but such confidence in the quality of the product is surely a positive sign.

There are plenty of reasons to suggest that premium rum has a bright future – but perhaps most encouraging is the fact that the emergence of the category has been so gradual. It’s not the result of heavy discounting or short-term promotional mechanics. “Brand owners have been investing in the category for the last ten years,” says Robertson. “We’re on the cusp of something special right now, but it’s not being triggered by a short-term trend or advertising campaign. It’s the result of a considered long-term strategy.” By this time in 2008 will we be reflecting on the year that, finally, rum realised its premium potential? Or will we still be looking forward to impending greatness, and sounding just like that irritating old broken record?

© db December 2007