Interview

just the Answer: Bacardi's global category director for rums, Dmitry Ivanov

Most popular

The alcohol industry is about to become less sweet

Why a sale of Casella is no slam-dunk

Sustainability cues offer a marketing opportunity

How the sugar tax has transformed soft drinks

Pernod is back in Kentucky, but why did it leave?

MORE

Dmitry Ivanov was appointed global category director for rums at Bacardi in 2012. Earlier this month, editor Olly Wehring travelled to Puerto Rico to speak to him about the company's flagship white rum brand, where it went wrong in the past and Bacardi's hopes for its broader rum range going forward.

Dmitry Ivanov became global category director for rums at Bacardi in late-2012

Dmitry Ivanov became global category director for rums at Bacardi in late-2012

just-drinks: What does your job entail?

Dmitry Ivanov: I'm responsible for leading the development of the rum category globally for Bacardi. That includes the geographical participation and development, as well as rum innovation. It's all-inclusive, so it's like being the managing director of the rum category.

It's a big job. Within Bacardi, it's definitely very important: It's the name of the company, ultimately. Rum has always been a key category for us.

j-d: Looking at the Bacardi white rum brand, how is it performing now?

DI: We're still in a transition from the past into the future. We're pretty much stable all around the world. In the emerging markets, we're in very good shape. It's a new business for us in many instances. India, China, Russia and Latin America are all performing well for the brand. In what we call the legacy markets, there's still a journey to get the business back into the right shape, but we're starting to see a turnaround in markets like Mexico and the UK. 

The big task that we still have is to bring a bit more energy into the brand going forward. We need to bring a new way of thinking to the brand; internally, we call it a brand re-start. That's a big, through-the-line exercise, so we're looking at everything that was working versus everything that wasn't working, to find a way to start rebuilding the brand in a consistent way, not only at a global level but also more elementally at a local level. That is the big start that is in front of us. 

We started to put in place some very clear strategic choices; where we play, what we do, what parts of the portfolio we want to activate more. We came up with a new global communication platform in 'Untameable', which we launched a year ago. We're committed to this campaign.

The first thing we've done is to put things in order, by prioritising some things over others. That helped a lot. And secondly, we've seen the impact of the new campaign.

j-d: What was wrong before?

DI: I think the big thing we're driving more now is the dark rum side of the portfolio – that's very critical. We've also simplified the drinks strategy, which is also critical. We are also sticking to the solution that we believe will drive the business going forward. It's our solution – it's probably not something that would work for other businesses.

Today, we're selling in around 160 markets. We choose the ones in which we want to participate in and in which we want to win. We've done that and we're sticking to it. That helps to stay focused.

j-d: What are the top markets for brand Bacardi?

DI: Today, it's the US, Canada, Mexico, Germany and Russia. The fastest-growing markets right now are the UK, Mexico, Eastern Europe, India and China.

j-d: How does the brand fare against domestic white spirits in emerging markets?

DI: It's more of an international battle, because we're opening up a new kind of category in international branded spirits coming from the older world. Our job has been to establish an aspirational, future world for the brand and categories, focusing on things like how consumers should drink the product. I think it's a traditional entry-point into the emerging markets: We did exactly the same thing in India and Russia, and we're doing it in Africa today. The emphasis is on establishing a dream world rather going into the deep connection with local spirits.

j-d: Which markets have you pegged for future growth for Bacardi's rum portfolio?

DI: I call the US the biggest emerging market in the world, thanks both to economical and population reasons. The rum category there is very small and much less developed compared to other categories. There is still a lot of potential for both the brand and for the category. Russia is also a very important market for the future. Despite all the issues, it's still a market with a lot of opportunity. It's got a unique mix of higher price and good volume expectations; that makes it a very attractive market on a longer run. There might be ups and downs, but it's still aspirational for us.

There is still a hell of a lot of potential in China. There are many question marks when it comes to how to operate in China, but Asia generally offers many classic emerging market opportunities – it goes beyond just China. Even Japan and South Korea are quite new for the rum category,

Then, in Latin America, we like the look of Brazil, Argentina and Chile. And, we are tapping into Africa, but we'll see.

j-d: How is Bacardi's Havana Club brand performing in Florida?

Dmitry Ivanov, Bacardi's global category director for rums

DI: It's doing okay, we're selling it. It's absolutely fine. It's probably not the biggest priority for the business at this point in time. We've never talked about expansion, it might come, it might not. It's dependent on many things. The starting point for us is the Bacardi brand. If we see other opportunities in countries like the US, the first thing we do is look at our branded portfolio.

j-d: Which brings me on to the Cuban embargo. What will Bacardi do if – or when – the embargo is lifted?

DI: We have a plan, but I won't go deeply into what that plan is. A lot of things will change. We were born in Cuba, it is where the business started. That's still where the heart of the brand, the business and the family belongs. We want to return to Cuba: We're in exile, and we want to go home.

j-d: The company has an aged rum portfolio, which also comes under the Bacardi brand name.

DI: First of all, we built the big brand with a pretty diverse portfolio. Then, we elevate our communication with consumers to a brand level from a product level. We are a portfolio brand, we're not a single proposition. We are probably best known for the strength of the white rum, but this is both an issue and an opportunity. With around 160 different variants, we have a lot of product that we still haven't shared with consumers.

The way we play is classic portfolio management – we identify specific needs for specific consumers, while still holding brand integrity.

j-d: Are you satisfied with the breadth and depth of Bacardi's rum portfolio?

DI: The simple answer is 'yes', the broader answer is 'yes, but...'. There are possibilities to expand, particularly within the dark segment, not only in aged rums but also ways-to-serve, for example.

j-d: How is the Oakheart spiced rum variant performing?

DI: It's doing okay. There are a few markets where we are doing very well compared to our expectations. We want to do more, because there's a lot of potential. It's present in around 30 markets: For us, it's less about expanding the presence, it's more about building the brand. That's the next priority for us.

j-d: We're here in Puerto Rico for the 'Bacardi Triangle' consumer event. What's the return for the company from this?

DI: Well, it hasn't finished yet, so we don't know what the ultimate result will be. This is all about communication: We pass a message to consumers, and they also speak up if they like it. Hopefully they like it. This event is a classic word-of-mouth type of model.

It's not a cheap event, but it's not about how much money we've spent, it's more about what type of expectation we have out of this event. The results so far are absolutely enormous. Even coming into the event, we feel we've already passed our benchmark. So, we feel it was worth it.

j-d: We took a guess at around US$6m – is that close?

DI: It doesn't matter!

j-d: Where would you hope Bacardi's rum portfolio to be in five years' time?

DI: First of all, we're seeing sustainable growth year after year, that's something that's very critical for us. It's not about how much, it's more about keeping growth going. That's something we aim for. Secondly, I hope for people to talk about Bacardi the brand, not only within the category, but within the total branded market. That's what we want to get back, and that's one of the reasons why we're holding an event like this.

j-d: Do you feel that the Bacardi brand had lost something in the past?

DI: Yes. I think we lost the connection with the new generation. Not everywhere, but in many places we stayed a little bit in the past rather than anticipate the future. That's the big job to do, that's something we are doing and I think we are on the right track to get there.


Related Content

Free Craigellachie 51 YO, Bacardi's single malts strategy and a tough stance on age statements - Interview - Bacardi's global brand director for malts, Ian Taylor

Free Craigellachie 51 YO, Bacardi's single malts strategy and a tough stance on age statements - Int...

"Havana Club is a kind of rebel brand. It is important to protect that" - just-drinks meets Havana C...

"Havana Club belongs to Cuba" - just-drinks meets Cuba Ron Corp president Juan Gonzalez...

"We can handle Brexit in our stride" - just-drinks talks to Diageo CEO Ivan Menezes...

Oops! This article is copy protected.

Why can’t I copy the text on this page?

The ability to copy articles is specially reserved for people who are part of a group membership.

How do I become a group member?

To find out how you and your team can copy and share articles and save money as part of a group membership call Sean Clinton on
+44 (0)1527 573 736 or complete this form..



Forgot your password?