Rising High-Proof Rum Category Spurs New Entrants

(Shanken News) Within the rum category, one of the hotter segments lately has been higher-proof dark and spiced rums. The high-proof segment’s recent dynamism is epitomized by Impact “Hot Brand” Sailor Jerry—a 92-proof spiced offering which rose by 59% to 635,000 cases in 2010. Sailor Jerry’s success has led to a rising tide of new entrants, in the form of line extensions or new brand propositions altogether.

New this spring are two higher-proof extensions of existing brands: Malibu Black from Pernod Ricard USA and Mount Gay Black Eclipse from Remy Cointreau USA. The Mount Gay extension is at 100-proof and retails at around $25, about a 30% premium to the core brand. “We wanted to come up with a different, bolder expression of Mount Gay whose strong taste profile would appeal to younger consumers while staying true to the Mount Gay brand to keep rum connoisseurs engaged,” says Mount Gay international brand director Daniel Cabaleiro.

Malibu Black is also targeted at the LDA-to-29-year-old demographic, with a particular focus on males, according to brand manager Sheila Senhouse. At 70-proof, Malibu Black, which sells for around $16 a bottle, isn’t among the highest-proof rums out there, but it’s a significant step up from Malibu’s core 42-proof brand.

Other new entries to the higher-proof rum segment include Proximo’s Kraken (94-proof, $20), Heaven Hill’s Blackheart (93-proof, $16), Serralles USA’s Blackbeard (86-proof, $15) and White Rock’s Spiced Jack 94 (94-proof, $16). Of those, Kraken, which sold 75,000 cases last year (its first year on the market), according to Impact Databank, has so far been the standout. Others, like Spiced Jack at 20,000 cases, are also off to good starts in what’s becoming a hotly contested category.

“It’s a bit of a following game,” says Brittany Blevins, rum brand manager at Heaven Hill. “Sailor Jerry’s high proof became hugely successful and others took note. That interest comes from consumers who want something edgy, and the taste profile of spiced rum lends itself to that.” Blevins adds that Blackheart, released early last year, came out 40% ahead of its volume projections in its first year on the market.

All this new activity has put pressure on spiced rum leader Captain Morgan, which at 6.2 million cases has dominated the category for years. The Captain’s 100-proof offering, rolled out in 2008 at around $19 a bottle, got off to a strong start and “continues to carve out a niche,” according to global brand director Russell Jones. “It’s been in the market for three years now, and for the first couple of years it was in the list of top innovations in the U.S.,” he says, noting that the midwest and whiskey belt are strong areas for the 100-proof variant in the U.S. market.

Other spirits categories are taking a page from rum’s book. Phillips Distilling recently re-released its Revel Stoke Canadian whisky brand, marketing it as a “spiced whisky,” which, at 90-proof and about $17 a bottle, will compete with all high-proof players. Given the success of Sailor Jerry and others, it appears the high-proof rum segment is fast becoming the hot spot for most top brands in the rum category and beyond.

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