Rum focus: In need of a shake-up

Rum has not enjoyed a good year; the Nielsen statistics are pretty emphatic on this (see box below). There has been a decline of 3.3 per cent in total sales, with a fall of 6.6 per cent in dark rum (a sub-category that has been talked up as something that has been in growth in recent years).

There is a worrying 10.2 per cent fall in white rum sales - which all goes to show how much work has to be done to re-establish the category.

Perhaps the problem has been that the number one brand in this sector has begun to suffer. While Bacardi is not enduring a catastrophic fall in sales, it is nevertheless losing ground.

Normally in such situations another brand steps up to the plate to fill its shoes. But so dominant has Bacardi been that no-one is in the same ballpark in terms of distribution and consumer recognition.

In fact, there are those who argue Bacardi's success has done little at all for the rum category because it does not trade on its values as a rum. Sure, rum has the image of a party spirit, something Bacardi has traded on very hard in the past. But when a customer is ordering a "Bacardi and Coke" over the bar, are they consciously ordering a rum? Or just a branded white spirit that is easily mixable?

As if to demonstrate the impact Bacardi has on the whole market, its downturn has coincided with the fall in the white rum category. One of the few credible challengers to Bacardi in recent years has been Havana Club - but, as isdiscussed later on these Focus pages, brand owner Pernod Ricard has decided to remove all focus from the white rum variety and instead invest everything behind the golden rum Havana Club Especial.

Small sales base

It is an understandable move as the one category showing any kind of growth is golden rum, with brands such as Mount Gay and Sailor Jerry leading the way - even Bacardi has got in on the act with its Oro brand extension. But, as ever, with the more encouraging trends in the on-trade drinks business these days, the growth is coming from a small sales base.

If rum is going to get back into growth soon, then it is the white rum category that needs to be addressed quickly. But how will that happen when brands such as Havana Club are leaving the white rum market? It looks like it might be all down to Bacardi - unless it gets out of white rum as well. Now there's a thought…