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Old 01-15-2008, 10:34 AM   #1
Edward Hamilton
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Default Nicaraguan rum ready to conquer Florida

Nicaraguan rum ready to conquer Florida
Source: Miami Herald
BY JIM WYSS
Jan 14th


Wearing a blue Nike baseball hat and wielding a mallet and a flat-point chisel, Eloy Juбrez is the unlikely face of Flor de Caсa's efforts to carve out a share of the premium rum market.

But at this sprawling rum distillery 75 miles west of Managua, Juбrez, 59, is one of the few workers trained in the arcane art of assembling the white-oak barrels used to age Flor de Caсa. It is that trademarked, slow-aging process that the company hopes will give it the fast-track into crowded U.S. liquor cabinets.

In Nicaragua, Flor de Caсa -- ''flower of the cane'' -- is so dominant that its fiercest competition is itself. (The white rum and dark rum varieties have their own marketing departments that compete head-to-head.)
But here in the United States, this nation's complicated distribution system -- and the brand's unwieldy name -- have kept Flor de Caсa a niche product.

Now the rum maker is hoping an edgy advertising campaign and a new importer might help change that.

Sitting in the 14th-floor conference room at the company's international headquarters near Dadeland Mall, Managing Director Robert Collins talked about Flor de Caсa's word-play campaign that has sprouted up around South Florida and other key U.S. markets.

One ad features a couple in a steamy embrace under the words ''Flor-Play.'' A billboard near Miami International Airport emblazoned with a rum bottle reads ``Welcome to Flor-ida.''

Beyond eye-catching, the campaign is also an olive branch to the tongue-tied who trip up on ''De Caсa,'' said Collins. ``We want to introduce non-Spanish speakers to an easier way to remember the brand at the bar.
''That's the sweetest thing to a marketer's ears, to have the product referred to by name,'' he said.

In U.S. grocery stores, a bottle of the company's ''entry-level'' 4-year-old rum can run about $20, while its 18-year-old rum retails for about $40 and its limited-edition 15-year-old Centenario can fetch $80.

Collins won't talk U.S. volume or sales figures but says the brand has seen double-digit growth since it began aggressively targeting the U.S. market eight years ago. According to the U.S. International Trade Commission, the United States imported $2.4 million worth of Nicaraguan rum in 2006.
Where Flor hopes to make the biggest headway is in the fast-growing premium rum category. According to The Nielsen Co., ultra-premium rum sales grew 17 percent nationallly last year -- faster than any other category.

Everyone from mass-market giants to Caribbean boutiques are taking notice. But Flor de Caсa hopes to impress consumers with its quality and pedigree.

19TH-CENTURY FIRM
The Compaснa Licorera de Nicaragua, which produces Flor, traces its roots back to 1890 when the 62,000-acre sugar plantation it sits on was founded. It began making rum commercially in 1937.
''With Flor de Caсa, we are offering consumers real rum that goes back 100 years,'' said Collins. ``There are a lot of brands out there that were recently created -- a lot of brands with flashy packaging that are marketing brands. That's the difference.''

The company uses proprietary techniques for fermenting and distilling the molasses before pouring the finished product into oak barrels, where it ages anywhere from four to 18 years.

The 180-liter barrels are imported from the United States and Europe, and workers like Juбrez use metal bands (no nails or sealants) to make them rum-tight.

Juбrez, who received training from Scottish cask makers, says he can put together about 16 barrels during a six-hour shift.
It's that kind of attention to detail that is part of Flor's secret, said Collins.
''We like to think of ourselves as the single malts of the rum category,'' he added.

They're not alone. Competitors from Captain Morgan to Bacardi have been rolling out premium brands. Bacardi recently introduced Bacardi 8, aged eight years and going for about $20 a bottle. Its limited edition Bacardi 8 Millennium -- aged for additional time in sherry barrels -- sells for upwards of $500 a bottle.

''Rum is the new cognac,'' Tom Pirko, a spirits analyst with BevMark, said of the premium brands. ``This is rum that is being served in a snifter. . . . And what's being whispered in the business is that there is a whole hell of a lot of money to be made at the top end.''

Even amid the competition, Flor has held its own. The company has racked up more than 40 international awards over the past three years and continues to get high marks from critics.

Anyone who has enjoyed Flor's older rums can thank the current Nicaraguan President Daniel Ortega and his Sandinista party. Both helped in an unintended way. When Ortega and the Sandinistas first came to power in 1979, after a civil war, Flor de Caсa's owners decided to put much of their product in storage rather than face price controls. When the Sandinistas lost power after elections in 1990, Flor de Caсa began rolling out its aged stock in earnest -- just in time to ride the growing interest in premium rums.
Even so, because liquor companies must reach distribution deals on a state-by-state basis in the United States, becoming a national player has been trying, said Collins.

''The United States is an expensive market to introduce a new product. We spend disproportionately in the U.S. relative to the sales we get in other markets,'' he said. In Chile, for example, the rum became the top-selling brand in grocery stores a mere 18 months after being introduced.

HEADING OUT WEST
Starting this month, Flor hopes get some help from the West Coast. The company recently announced that it was dropping its 15-year relationship with its Miramar-based importer Shaw-Ross in favor of San Francisco-based Skyy Spirits, which is part of the Gruppo Campari company that has helped Flor make inroads in Spain.

Luis Ayala, a rum consultant and author who runs Rum Runner Press, said while Flor will probably never be a major U.S. player, it's well ahead of many of the other high-quality niche brands it competes against.
'They have great products, especially once you get into the `old' rums in their portfolio,'' he said. ``I have seen them in many markets; they are well established in some and making headway in others. . . . They have a better chance than most non-giants.''
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Old 01-15-2008, 02:05 PM   #2
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Old 01-15-2008, 02:29 PM   #3
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Translation: The price will probably be going up soon!

I think I'll go ahead and stock up on the iterations I like and use most.
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