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When is a rum not a rum? When it's Captain Morgan - just-drinks thinks

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Last week's half-year results have given Diageo a solid base for its fiscal full-year. But, amidst the 7.5% sales lift for the group in the six months to the end of December was a disappointing set of figures from Captain Morgan.

Diageo has positioned Captain Morgan more as a brand than a rum

Diageo has positioned Captain Morgan more as a brand than a rum

The brand's global sales in the six months were down 4% and, more worryingly, down 9% in its key US market.

"Rum has been tough for us," said CEO Ivan Menezes following the release of the group's numbers. "In the US, rum is a more muted category. Captain Morgan, as a result, is not performing well."

Diageo's positioning of Captain Morgan as a brand first and a rum second is both a blessing and a curse. While performance leans much more on product innovation, this is one boat that won't necessarily rise with the tide of a growing category. Consequently, when Diageo blames a 7% slide in sales from its rum stable on both "category weakness" and "a strong comparable in the previous year", only one of these is really true.

Captain Morgan is the kind of brand whose positioning is such that it needs to be kept permanently fresh, from its marketing activity - an experiential 'indoor lagoon', anybody? - to its NPD runway - a shot of Cannon Blast, please. No longer can Captain Morgan ally itself with the rum category: Having made very little of its provenance or history, the brand hasn't followed the traditional rum route. This strategy has clearly been successful in the past, hence Diageo's admission that the first six months of its current fiscal year saw the brand cycle a healthy performance a year earlier.

Most drinks companies would kill for the kind of brand equity that Captain Morgan can boast of. However, in being more a brand than a rum, Captain Morgan is one of those brands that transcends its category.

I'm afraid that blaming the vagaries of the category on consumers' disinclination more broadly towards rum isn't a big enough stone for Diageo to hide Captain Morgan's sales declines behind.


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