Thursday, February 02, 2012

Heaven Hill Takes Aim At 1 Million Cases For Admiral Nelson’s Rum

(by Shanken News Daily) Last June, Heaven Hill Distilleries made a major play in the rum category, acquiring the 700,000-case Admiral Nelson’s rum brand from Luxco Inc. The purchase filled a gap in Heaven Hill’s portfolio. The company already had Whaler’s ($12.99 a 750-ml.) and spiced rum Blackheart ($14.99), as well as super-premium cachaça brand Água Luca ($21.99). But Heaven Hill lacked a large-volume, mainstream rum offering like Admiral Nelson’s, a spiced rum retailing at around $10 a bottle.

Under Luxco, Admiral Nelson’s averaged 25% annual growth from 2006 through 2010, earning five consecutive Impact “Hot Brand” awards. The brand’s pace slowed to 7.5% during last year’s transition, reaching 725,000 cases, but Heaven Hill is projecting growth of 15%-20% for 2012 and ultimately aims to propel Admiral Nelson’s past the million-case threshold.

“Our focus is to grow the brand over the next couple of years at a similar rate to that of the past few years,” says Andy Shapira, Heaven Hill’s director of corporate analysis. “Luxco did a great job, but we’re capable of growing brands to well over a million cases—as we’ve done with Burnett’s vodka and Evan Williams Bourbon. We envision that type of growth with Admiral Nelson’s.”

Competition is intensifying in the spiced rum segment, although it’s still dominated by the 6-million-case Captain Morgan. Bacardi, with OakHeart ($12.99 a 750-ml.), and Beam Inc., with Cruzan 9 (around $15) are among the recent entrants into the spiced arena.

In addition to the core Admiral Nelson’s spiced rum brand, the line also includes Admiral Nelson’s 101-proof spiced rum and flavor extensions Coconut, Raspberry, Vanilla and Cherry. “All the excitement in the category has been with flavored and spiced rums,” says Shapira. “Traditional rums have been suffering a bit.”

Heaven Hill plans to continue focusing on Admiral Nelson’s current line before launching new flavors. “Rum isn’t vodka, so you won’t be seeing a new Admiral flavor every six months like you might with Burnett’s,” says Admiral Nelson’s brand manager Brittany Blevins. “But we’ll be looking more at specific consumer interests to expand the franchise.”

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