Editor's Viewpoint - Will Diageo's White Rum Foray Prompt Bacardi Buys?
The arrival of Diageo's Captain Morgan White Rum should act as a wake-up call for Bacardi
The launch of the latest addition to the white rum category will have some folk in Bermuda and Miami in a bit of a flap at the moment, I imagine. Today's unveiling of Captain Morgan White Rum by Diageo is sure to stir things up at Bacardi's offices and its repercussions could even spread beyond rum.
Let us not be under any illusions here: Captain Morgan White Rum will not grow the white rum segment in any marked way. Of all the rum category's sub-sectors, white is growing the slowest. Indeed, it's pretty much stagnating.
According to The IWSR and just-drinks' joint 'Global market review of rum to 2017' report, the compound annual growth rate of white rum between 2006 and 2011 was 0.4%. The CAGR in 2010 and 2011 was even lower, at 0.3%.
No, Captain Morgan will not save the day. If anything, it will erode Bacardi's market share even further, not that the Bacardi brand needs any more help in this. Much as the company remains a serious player in the overall rum category - it holds 13.3% market share, according to The IWSR/just-drinks report, just behind market leader United Spirits - brand Bacardi has seen its CAGR dip to -0.5% between 2006 and 2011.
Hence, the arrival of Diageo into white rum isn't going to be welcomed too warmly.
Of course, it cuts both ways: Oakheart, launched in 2011 was - and still is - Bacardi's play in the spiced rum segment, which is led by, you guessed it, Diageo's Captain Morgan Spiced Rum.
So, will the launch push Bacardi to venture even further beyond rum? Does Whyte & Mackay appeal all of a sudden? Could some of Beam Inc's more dusty brands tempt Bacardi, when Suntory finally takes the reins at the US firm?
Hell, could Bacardi even look at a counter-bid for Beam itself, maybe teaming up with (gasp!) Diageo to do so?
Probably not. But Captain Morgan White Rum will surely spur Bacardi to consider doing something big.
Global market review of rum – forecasts to 2017
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