Whitefish, MT / ACCESSWIRE / October 23, 2014 / The October 2013 IWSR (International Wine & Spirit Research)
global forecast indicates that the international spirits import market
is on track to grow at a 3% CAGR through 2018, with rum emerging as one
of the top three fastest growing categories alongside whisky and vodka.
Total rum sales volume is set to climb from the 146M cases of nine liter
bottles currently sold annually to over 156M cases, while consumption
in the broader spirits market is set to rise 290M cases over 2012
levels, to around 3.37B cases by 2018.
Rum is now widely viewed in the liquor industry as the next big thing
according to market research from Just-Drinks, with the branded and
premium segments seen as having the most room to grow, when directly
compared to how well developed these segments are for spirits such as
cognac, whisky, and vodka. The Decade of Rum report compiled by the West
Indies Rum and Spirits Producers' Association (WIRSPA) even indicates
that super-premium rum volume will jump 50% in the next three years
alone, partially on the mounting strength of spiced varieties. Spiced
rums, which have shown excellent traction amongst younger demographics,
have posted double digit sales volume growth over the last decade
according to the WIRSPA report and they now make up around 8% of the
overall rum market.
Rising Rum Lacks A Premium Front-Runner
The WIRSPA report even contains a quote from global brand director at
sector giant Diageo (NYSE: DEO), known the world over for their Captain
Morgan brand, who noted that the super-premium category was still
bizarrely underdeveloped. Diageo's global brand director was also quoted
in the Just-Drinks/IWSR report last year on the rum market as saying
that, when the super-premium rum category starts to take off, it will be
pretty quick and dramatic. The rum market has yet to find its
front-runner premium brand in terms of price and volume, as is the case
in the vodka market with brands like Absolut (Absolut ELYX being the
super-premium version), produced by Pernod Ricard (OTC:PDRDF) subsidiary
V&S Group, or in the gin market, where Diageo's own Tanqueray holds
this distinction. At any rate it seems clear that, as The Spirits Business
and other industry analysts have noted, rum's party image is rapidly
maturing, with spiced premium rums helping to cement the spirit's
popularity among more distinguished drinkers in western markets.
Rum has been quietly making its way towards the top shelf over the
last decade, after years of being seen primarily as the base for drinks
like daiquiris and pina coladas. The liquor's versatility/mixability
(especially white rums), as well as the emergence of high-end brands now
increasingly enjoyed in a standalone capacity on the rocks, has
garnered considerable favor within cocktail culture, from both consumers
and bartenders alike. Yet even as RumFest 2014 drew to a close earlier
this month in the UK, where 350 plus rum fans broke the Guinness World
Record for the largest rum tasting in history, rum has yet to find a
premium front-runner, even though brands like the diverse Cruzan Rum,
bottled in the U.S. Virgin Islands by Suntory Beverage & Food
(OTC:STBFY), have gained a seat alongside fine scotch and cognac at many
upscale bars and restaurants. US Department of Commerce data on the
Virgin Islands in particular indicates that despite a shrinking economy,
rum exports were up 22% last year, with a 2.2% rise in tourist arrivals
helping to keep the rum market humming and premium rum brands now
looking like a viable high-end export market.
Few Opportunities For Investors To Profit
Edrington Group's 61% acquisition of the top golden rum producer in
the Caribbean, the privately-held Brugal (Dominican Republic) several
years ago, was a clear play to harness the attractive dynamics of the
rum industry and make a bid for seizing the premium rum pole position.
Eight years on they are now in a position to execute, with a 360 degree
marketing plan underway in select geographical regions and a very dry,
aged, smooth white rum that should appeal to premium consumers. The top
international brand in rum today according to IWSR is the
privately-held, Cuba-based company known for their white rum, Bacardi,
which has largely failed to capture the coveted premium rum market,
despite their renowned branding prowess.
Such references as these illustrate just how little access most
investors have to the potential upside of a premium rum brand taking off
in the way Bacardi's Grey Goose vodka has, as the major players are
either huge market cap companies with a high share price, or
privately-held entities. Until recently one of the only accessible
targets in the space has been Castle Brands, Inc. (NYSE:ROX), which is
partnered with one of the oldest rum producers in Bermuda, Gosling
Brothers, whose record sales in recent years have been led by the
success of their flagship Black Seal Rum brand.
Accessible New Contender With An Ingenious Brand Strategy
A challenger has appeared in this hotly contested industry in the
form of Blue Water Global Group, Inc. (OTCQB: BLUU), a company for whom
brand identity is a core concept and which is therefore potentially
poised to become a serious contender, perhaps succeeding where even
giants like Diaego and Bacardi have as yet somewhat failed to really
strike a lasting chord with premium rum consumers. Focused squarely on
the Caribbean, Blue Water Global Group is cementing their overall brand
identity via a chain of casual dining restaurants which cater to the
Caribbean lifestyle expectations of the booming North American tourism
market. By providing sumptuous menus of food whose quality is
consistently good from location to location and an idealized
Caribbean-themed atmosphere that includes features like an open-air tiki
roof and swimming pool with swim-up bar, the Blue Water Bar &
Grill(TM) brand is being executed in a manner similar to the popular Hard
Rock Cafe, complete with branded merchandise available in-restaurant.
With an initial location on the island of St. Maarten (Dutch West
Indies) at Indigo Bay, a lush tropical beachfront commercial/residential
project in the heart of what has become one of the Caribbean's top
duty-free shopping Meccas, complete with pristine white sand beaches and
brilliant blue coastal waters, Blue Water Global Group is off to a
great start branding-wise for the proliferation of their line of premium
rums. Distilled locally in the Dominican Republic with crystal clear
water and organically-grown sugar cane, spiced Blue Water Caribbean
Gold(TM) and the flagship Blue Water Ultra Premium Rum(TM) will also be
contained in gorgeous (imported), then packed six at a time in custom
four-color printed cases. Such an articulate strategy to capture the
essence of the Caribbean via their restaurant brand, and then telegraph
that articulation to the rapidly growing rum market via a line of
top-shelf, premium branded rums, may just be the ticket to capturing the
imagination and tastes of premium drinkers the way Grey Goose and other
brands have done in vodka and other spirit categories.
Blue Water is set to start shipping product soon, after recently announcing
the initial shipment of bottles, stoppers and four-color box cases,
with this first release of the high-end spirits representing nearly 20k
1-liter bottles. Beyond featuring the rums at their restaurants, the
company plans to fully leverage their network of Caribbean distribution
contacts for maximum brand impact and they have already secured access
for both the Port of St. Maarten and the duty free shopping area of St.
Maarten's airport.
Register here for email updates on Blue Water Global Group developments: http://www.tdmfinancial.com/emailassets/bluu/bluu_landing.php
Disclaimer:
Except for the historical information presented herein, matters
discussed in this release contain forward-looking statements that are
subject to certain risks and uncertainties that could cause actual
results to differ materially from any future results, performance or
achievements expressed or implied by such statements. Emerging Growth
LLC is not registered with any financial or securities regulatory
authority, and does not provide nor claims to provide investment advice
or recommendations to readers of this release. Emerging Growth LLC may
from time to time have a position in the securities mentioned herein and
may increase or decrease such positions without notice.
For making
specific investment decisions, readers should seek their own advice.
Emerging Growth LLC may be compensated for its services in the form of
cash-based compensation or equity securities in the companies it writes
about, or a combination of the two. For full disclosure please visit: http://secfilings.com/Disclaimer.aspx
SOURCE: Emerging Growth LLC