A rum with a view

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It may not be in Wetherspoons, but Bacardi has its sights firmly set on the number one spot in the white spirits sector. Ben McFarland reports.There...

It may not be in Wetherspoons, but Bacardi has its sights firmly set on the number one spot in the white spirits sector. Ben McFarland reports.

There was a right royal rum rumpus earlier this summer when JD Wetherspoon announced it was to de-list Bacardi in favour of a lesser-known rival.

The dispute between perhaps the industry's hardest bargain-driving pub company and the UK's most ubiquitous spirit epitomised the perennial margin-driven struggle between retailer and supplier. However, with each side claiming its own moral and financial victory, it remains unclear who dances to who's tune.

In this instance, Wetherspoon claimed that the decision to sever ties with Bacardi rum was taken as part of a nationwide initiative designed to introduce more premium spirits behind its bars.

Not surprisingly, Bacardi's account differs and the rum maker claims it was the renowned margin-chasing at Wetherspoon - the company that put the "bar" into barter - which prevented a successful agreement.

"It was a decision based entirely on price," said John Burke, Bacardi's marketing controller. "We got to a position in the negotiations where it wanted to purchase Bacardi rum for a price that frankly we weren't willing to sell it for. If it's a premium brand we've got to sell it at a premium price."

Bacardi's replacement at Wetherspoon is Havana Club and owner Pernod Ricard has launched a white Anejo rum specifically for the mainstream sector. However, to usurp Bacardi from its position as the number one brand in a white rum market worth £160m will require a Herculean effort on the part of the young pretender.

In this year's Publican Market Report, 97 per cent of respondents stocked Bacardi Carta Blanca.

Such is its dominance in the white rum sector, however, Bacardi has bigger fish to fry in the overall white spirit market. Its sights are set firmly on Smirnoff vodka and its position as the favourite spirit among the key 18 to 24-year-old male and female drinker.

"We're going great guns in the white rum sector, " added John. "But we took a step back from rum and had a look at the whole spirits sector. Carta Blanca's main competition is vodka and Coke and we know that, from research, two-thirds of vodka drinkers actually prefer the taste of rum."

The crusade to knock vodka off its perch in the UK is being spearheaded by a high profile alliance between Bacardi Brown-Forman (BBF) and Coca-Cola Enterprises (CCE).

In the first of what both companies promise will be a series of "spirit and mixer" joint ventures, Bacardi Vanilla Coke (BVC) - a combination of Carta Blanca and a separate bottle of Vanilla Coke - is being pushed heavily in the UK on-trade.

Both companies claim the "BVC" is a bar-call that slips off the tongue on a regular basis in America, but it remains to be seen whether it will be the catalyst that Bacardi needs to translate its on-trade omnipresence into growth in volume sales.

While Carta Blanca and Bacardi Limón, a citrus-flavoured variant, are the focus for the mainstream pub market, it is within the upper-end bars where Bacardi is looking to strengthen its hand.

The withdrawal (or banishment depending on who you believe) from a chain like Wetherspoon has worked in Bacardi's favour within the top-end arena, claims John.

"Style bar operators have come to us since the Wetherspoon announcement to discuss our premium range," he said. "The BBF deal has seen an increase in the size of the sales force, which means there are more people to push the premium range and allows us to reach the kind of bars we weren't in before."

Within a style bar sector where big isn't always best and where a premium is placed on authenticity, the gap between Bacardi and Havana Club is by no means as wide.

The Pernod Ricard brand has played up its Cuban credentials to good effect and in doing so exposed Bacardi's Achilles heel.

It's been more than 40 years since Bacardi was produced or drunk in Cuba but it's by no means ready to renounce its Cuban roots. "Bacardi is a Cuban rum and always has been, but it's something that we have been guilty of not talking about and unfortunately it's been left to other people to fill in the gaps," John said.

"We have a 140-year history of rum making but we have never had an opportunity to shout about it until now."

A return for Bacardi to its homeland is not completely unfeasible in light of the reported disintegration of the communist regime and the fact that Fidel Castro, a thorn in the side of Bacardi long before Tim Martin was even allowed in a pub, is approaching his twilight years.

However, until Bacardi returns to Cuba, the place Bacardi calls home, albeit a temporary or spiritual one, is in the nearby Caribbean island of Puerto Rico. The Bacardi distillery (pictured)​, situated on the periphery of the capital San Juan, is where a new state-of-the-art visitor centre opened earlier this year at a cost of around £5m.

At its opening, Bacardi's outgoing chief executive told the local press: "This is more than a visitors' centre, it's where our Bacardi soul rests."

Puerto Rico is an island with a rich rum pedigree and is the world's leading rum producer - 80 per cent of the rum consumed in the United States hails from the island, with Bacardi by far the biggest supplier.

In addition to the rums available in the UK, it is here that Bacardi makes a trio of flavoured rums (raspberry, coconut and vanilla) for the more mature US market as well as a number of elite rums of which the most sought after is Bacardi Millennium. This is an extremely limited edition finished in sherry casks and packaged in a Baccarat crystal bottle.

It's safe to say that it will be a long time before that's available in a Wetherspoon pub.

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