Moet aims upscale to 'redeem' rum from parrots and pirates

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Spirit marketers are trying to elevate the one drink that's stubbornly resisted the trading-up trend: rum.

Moet Hennessy USA last week in New York rolled out 10 Cane, a golden rum from Trinidad that sells for $34.99 a bottle and is likely to be joined by other pricey offerings. Marketers including Diageo and Sidney Frank Importing Co.-which launched the wildly successful Grey Goose vodka-are eyeing the category.

"There are quite a few suppliers contemplating this because, frankly, there is no [luxury] tier within rum," said Lori Tieszen, senior VP for the 10 Cane Brand Co. at Moet Hennessy, the spirits arm of LVMH.

Marketers such as Moet Hennessy are betting the growing popularity of rum and the pervasive premium trend in spirits will drive sales of higher-end labels. They plan to tout the brands' sophistication, exotic locales and distilling processes through advertising and on-premise promotion.

WILL PEOPLE PAY UP?

Their challenge is that rum has a declasse image in the U.S., where it's either a pedestrian mixer or a party drink. Some question whether people will pay up for the spirit. "Right now a lot of rum's growth is coming from well brands [those automatically poured at a bar vs. call brands that the patron has to ask for] due to the exploding popularity of mojitos," said Brian Sudano, senior VP at the consultancy Beverage Marketing. Marketers "could encounter problems differentiating high-end from low-end brands."

Still, the segment is on an upward trend. Sales grew at a 4.6% clip last year-outpacing the overall industry's 3.1% showing-to 20.3 million cases, according to the Distilled Spirits Council of the U.S. The growth was fueled in part by flavored line extensions. Rum is the best-selling spirit in the country after vodka, which moved 43.5 million cases, and Bacardi USA's namesake rum, including flavors, is the top-selling spirit brand in the country. It sold 8.4 million cases last year, up 3.8%, according to Impact Databank.

But high-end brands represent a thimbleful of rum's volume. In 2004, only 9% of the rum sold was considered "high-end premium" or "super premium"-selling for $13 or more, according to Discus, and most of those are dark, aged rums. By comparison, 27.7% of vodka's volume is at that high tier, according to Discus.

Rum marketers have had a tough time pushing up prices, said Dan Rosenfeld, VP-USA for J .Wray & Nephew, which makes and bottles the Appleton line of Jamaican rums. Brown-Forman imports the line, which has premium and super-premium labels and moved about 120,000 cases last year.

"The consumers don't consider rum top quality yet," Mr. Rosenfeld said. "There's so much price stuff out there."

That may change as marketers with proven track records in marketing super-premium products make their push.

Moet Hennessy-which handles Hennessy cognac, Dom Perignon champagne and Belvedere vodka, among others-was created earlier this year when parent LVMH rolled up three separate marketing arms. The move followed the dissolution of a marketing alliance with Diageo.

The company sees opportunity in the following statistics: There are 16 million rum drinkers in the country and 10 million luxury-spirits imbibers; about 5 million cross over, said Ms. Tieszen. When these people go to bars with friends they face a dilemma. While fellow revelers order Grey Goose martinis, there's no rum that fits their need for conspicuous consumption.

Moet Hennessy, which is targeting men and women aged 25 to 35, deliberately tries to distinguish 10 Cane from the rest of the category. Marketing materials position it as "rum's redemption." It plans to roll out outdoor and print advertising in June. Ads will appear in Interview and regional publications. It will also launch an interactive element. On-premise efforts will tout different cocktails including the classic daiquiri, the Cuba Libre and, of course, the mojito.

`parrots and pirates'

Mother, New York, is the agency. It handled everything from the copy on the bottle to business cards.

It's "redeeming a category that's been maligned with parrots and pirates," said Ms. Tieszen, mentioning iconography employed by Diageo's Captain Morgan spiced rum and Parrot Bay flavored rums. The new Moet Hennessy offering is "about elegant beaches and parties on the beach." A spokesman for Diageo, however, rejoined that "pirates and parrots" have fueled the category's growth.

Moet Hennessy plans to introduce the product nationwide by September. It's moving quickly because other competitors are eyeing the niche; Diageo, the biggest spirit marketer in the world, has a product in its pipeline, the spokesman confirmed.

Another one to watch is Sidney Frank, which has an Australian rum in development called White Pelican. A company spokeswoman declined to elaborate.

Sidney Frank showed its marketing prowess by creating Grey Goose vodka out of nothing in the late 1990s. It built the brand into the leading super-premium vodka-1.7 million cases sold in 2004, according to Impact-and peddled it to Bacardi for an estimated $2 billion last year.

Whether these marketers can lift the category remains to be seen. But Mr. Rosenfeld is optimistic. "The super-premium category is so underdeveloped that anybody spending any money against it is going to help everybody in the field," he said. "It's rum's turn."

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