DIAGEO DROPS CAPTAIN MORGAN GOLD

Distiller Plans More Flavored Drinks Despite Alt-Malt Downturn

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BOSTON (AdAge.com) -- As a further sign of the deterioration of the alternative malt beverage category, segment leader Diageo is discontinuing Captain Morgan Gold in the U.S.

Early problems
The ready-to-drink beverage modeled after the popular spiced rum Captain Morgan had run into problems even before it hit the shelves. Concerns over taste delayed its launch, and the company has been buying back shipments from distributors with particularly high inventories, according to one wholesaler.

Captain Morgan Gold received $10.8 million in measured media in the first seven months of this year, according to Taylor Nelson Sofres' CMR. Grey Global Group's Grey Worldwide, New York, handled the advertising.

Diageo did not immediately

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return calls seeking comment.

Remaining bullish
Despite the failure of Captain Morgan Gold and the belief by competitors that the much-vaunted category is retrenching, U.K.-based Diageo remains bullish. It plans soon to roll out Smirnoff Triple Black Ice -- aimed to appeal to men -- and has other alternative malt drinks in the pipeline also believed to be based on its stable of so-called white spirits, which include Jose Cuervo Tequila. (Captain Morgan Gold was colored brown.)

Diageo jump-started the category with Smirnoff Ice -- based on the vodka brand -- in 2001. Since then, more than 50 flavored malt beverages have crowded the market. WPP Group's J. Walter Thompson, New York, handles Smirnoff Ice.

3% of beer market
The category represented 3% of all beer sold in supermarkets through Sept. 29, according to a report in Beer Marketer's Insights. The newsletter cited Paul Clinton, president-CEO of Diageo's North American operations, as saying he believes the U.S. category can reach levels resembling the 8% share of the U.K. beer market and Australia's 15% market share.

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