Rum’s golden opportunity

With the Authentic Caribbean Rum campaign in full flow last year, golden rum was touted as “the next big thing”. Ask a retailer or bartender about the hottest spirit around, and golden rum would invariably feature top of the list.

Launched in 2008 by the West Indies Rum & Spirits Producers’ Association, the £10 million marketing campaign paved the way for the introduction of a number of brands under the ACR umbrella, including Brugal and Barceló from the Dominican Republic, Chairman’s Reserve from St Lucia and Barbados’ Mount Gilboa.

But as the push draws to a close in the UK, will golden rum’s popularity wane as other rum styles fight for their turn in the spotlight??Leader of the pack“A few years ago golden rum was tipped as ‘the one to watch’ and this is still the case,” believes David Smith, global brand director for Cockspur rum. “Golden rum is performing well in retail and, more tellingly, it is one of only two categories in year-on-year growth in the on-premise.

“Many golden rum brands entered the UK retail market on the back of the WIRSPA programme. Now that this has ended, it is becoming clear who has performed under that programme and engaged both the trade and the consumer. Cockspur is unquestionably one of those brands which has performed very well over the past two years and continues to do so,” he says.

The Nielsen figures certainly show a category in robust health, with golden rum growing 29.9% in value and 27.6% in volume in the year to April 17, 2010.

Compare this to dark rum’s 7.8% value and 7.5% volume growth, and white rum’s 5.6% value and 4.6% volume growth and it’s clear that the golden style is the current darling of the rum category.

“The perception from the consumer is generally that golden is a better rum,” says Hege Sundberg, account manager for incubator brands at Inspirit Brands, which was bought by Global Brands earlier this month.

But while golden rum is “still getting the most attention, the white and dark categories have increased activity to prevent people from switching”, Sundberg believes.

Kathy Roe, senior brand manager for rums and brandy at First Drinks, agrees: “Golden rum is still a very strong performer, with Sailor Jerry Spiced driving growth for the rum category as a whole in the past few years, but we have also seen the popularity of dark rums increasing and this is a trend expected to continue.”?The interest in golden and spiced rum has had a halo effect on white and dark rum, “with sales volume increasing as consumers widen their repertoire in search of new and interesting tastes”, according to Halewood International’s Sue Beck, senior brand manager for Lamb’s. “Golden and spiced rum have opened up the category to a whole sector of new consumers looking for something different,” she says.

Appreciating valueIn the overall take-home rum market, growth is coming from the premium rather than the budget end of the market, according to Barnaby Rodgers, rums brand manager at J Wray & Nephew.

“Consumers are beginning to appreciate value as opposed to simply cost. While discounting is proving to be an immediate solution, this growth tends to be artificial,” he says.

Rum drinkers are becoming less price conscious as financial restrictions are slowly lifted, agrees Helen Tungland, trade marketing executive at Global Brands. “The increasing trend of connoisseurship is fuelling consumers’ desire for premium, authentic brands, as found in the rum category. This has also seen UK consumers trade up from white and golden to dark rums,” she says.

The recent influx of aged dark rums has helped consumers understand that rum is just as complex a spirit as whisky, believes Ben Pick, marketing manager for Pusser’s navy rum, which hails itself as “the single malt of rum”.

“The extra shelf space in supermarkets being given to aged rums at higher price levels would support consumer trends towards rums of higher quality. From our experience of Pusser’s connoisseurs there is likely to be more attention focused on the premium end of the rum spectrum during 2010,” Pick predicts.

But for Cockspur’s Smith, it’s golden rum styles that will benefit from an association with whisky.

“Rum is as diverse as whisky and golden rum particularly so – it’s this category that is driving current growth,” he says.

“Consumers can explore the category and find their favourites, and retailers are making ranging decisions based upon these consumer decisions. How long will it be before a retailer ranges rum by Caribbean island in the same way they range malts?” Smith asks.

All in the mixWhile flavoured and spiced rums play a role in recruiting new drinkers to the category, “the growth opportunity is still in golden rum”, believes Nick Gillett, founder and director of Mangrove, distributor of Santa Teresa Rum from Venezuela.

“The golden style is very customer friendly and great for mixed drinks, so its versatility is a strength,” he says.

But Gillett warns that although consumers want to try mixing rum-based cocktails at home, they don’t want difficult recipes. “Provide simple cocktail ideas and stock the other ingredients,” he advises retailers.

In shops which have limited space for spirits, “rum can get lost among other spirits”, according to Beck. “Retailers can make rum stand out by placing it in direct eye line of customers,” she recommends.

The summer barbecue and World Cup season will be “a prime time for retailers to upsell rum alongside other barbecue products”, Beck predicts.

“At a time when beer will be experiencing growth in sales, retailers have the opportunity to promote rum as an alternative World Cup drink for women, creating cocktail ideas and promotions,” she says.