The Captain Morgan Story

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How a Seagram orphan brand became an icon

Despite the problems the brand has encountered in recent years, Captain Morgan Original Spiced Rum changed the spirits industry in a number of ways. It was the first brand that managed to put a dent in the rum category powerhouse by the strategic use of flavoring. Further, the brand pioneered the important role of flavors, a phenomenon we take for granted today.

But it didn’t start out that way.

In the early 1980s, the new products group at Seagram was charged with filling gaps in the company’s portfolio. At the time, spirits sales were languishing in general and, unlike more recent times, whiskies were on the decline. So the gaps to be filled were in the so-called white goods arena with rum at the top of the list. The brands already in the stable were either price driven (Ron Rico) or weak and on life support (Palo Viejo). Myers’s rum, the upmarket brand, was (and still is) a small volume brand, limited to special occasion usage. In addition, the product is outside the traditional white, light rum taste profile.

Enter a consultant

The new products group engaged Kahn Associates, headed by Bernie Kahn, a former creative director at Grey. Mr. Kahn’s claim to fame was the slogan, Choosy Mom’s Choose Jif, a slogan that propelled the brand to number one in peanut butter.

The key issue behind the assignment: How do you go up against an 800-pound gorilla like Bacardi, which had an overwhelming share of the rum category?

Consequently, it was clear to everyone that the only viable pathway was a “value added” proposition. Unless you have a boatload of money to go “head to head” with a dominant market leader, go for an end run and outflank them. Even with a ton of marketing funding, taking on Bacardi was, more than likely, a losing proposition.

Based on the views of the new products people, insights from marketing research and the advice of Kahn Associates, it was decided that the new rum entry would be a flavored product.

But, what flavor and what to call it?

The flavor decision

While there is some ambivalence about how the decision to go with spice came about, it was clear that two hurdles needed to be overcome. First, since the vast majority of rum drinks are mixed (and at the time, predominantly with cola), the flavor had to accommodate a mixed drink such as rum and coke. Second, flavoring and tastes can be polarizing (love it or hate it), so the flavor to be chosen had to have the widest appeal.

The decision was reached to add vanilla and call it “Spiced Rum.” Vanilla and the other ingredients delivered a pleasant and desirable taste and the ubiquitous word “spiced” added mystery and avoided automatic rejection. Not only that, the word spiced allowed consumer to project what they thought it might taste like and the flavorings lived up to the promise. A winning formula was born.

Branding

captain morgan rum 3Here is where Seagram’s corporate culture entered the picture. Everyone had an opinion and thought everyone else’s stank (to paraphrase an old, off-color expression). So the brand name fell into one of those corporate vicious cycles whereby a proposal goes round and round and no decision emerges. To compound matters, names that had broad management support turned out to be already trademarked and not available.

At last, someone realized that the company owned a brand in the UK called Captain Morgan. A star was born.

Who will manage it?

At the time, Seagram had four operating divisions handling the spirits business. They consisted of Seagram (Seagram named brands), General Wine and Spirits (the upmarket brands), Calvert (price and push brands) and Summit (the brand hospice). Both the Seagram and General Wine and Spirits divisions were out because they already had rums and there is no way a newborn brand could go to Summit.

That left Calvert Distillers, the home of Calvert Gin, Lord Calvert Canadian, among others. (People at Seagram used to joke that Lord Calvert Canadian’s popularity was it’s square bottle. That meant it wouldn’t fall off the truck.)

Lord Calvert Canadian whiskey
Lord Calvert Canadian whiskey

In retrospect, putting Captain Morgan into Calvert was a gutsy decision. After all, the Calvert marketing and sales people were used to pushing their brands with little consumer pull and relied on pricing and point of sale promotions to move the goods. In fact, the people who worked at Calvert were looked down upon by others at the Seagram Corporation and were paid less than their counterparts at the other divisions.

Maybe putting the new brand into Calvert was a magnanimous gesture on the part of management, or maybe it was a plot to kill the brand, or even a cruel joke. But, I think that the single most important factor in the success of the brand, while at Seagram, was due to the Calvert people.

Success factors

So picture this… You’re a sales person at the Calvert Distillers Division of Seagram and, to put it bluntly, you’re viewed as the runt of the litter and always sucking hind tit. The brands you’re selling are a challenge, you’re making less money than your counterpart two floors above you in the same Seagram Building and, to quote Rodney Dangerfield, “You get no respect.”

Suddenly, a new rum product falls in your lap. The product tastes great, there’s a story behind the branding and above all, it’s a fun brand with lots of room for promotion other than on the basis of price. There is the potential for great drink night promotion at bars (the Captain and the Morganettes) and outstanding retail POS items (see the mirror).

The Calvert people go to work with strong motivation, with zest and zeal and with something to prove to their colleagues in other divisions. Their

The famous Captain Morgan mirror
The famous Captain Morgan mirror

sales philosophy departed from the usual and, instead of loading up retailers, all initial orders were limited, thereby encouraging reorders. They went aggressively after sampling opportunities with drink nights and co-packing small sizes with Coke.

The rest is history. The test marketing (1982) was a huge success and by 1983 the brand went national.

The line extensions

By the early 1990s (under my watch), while the brand was a winner, there were some hurdles in the way of further growth. Captain Morgan was amber rum and the preponderance of consumption was light/clear. Further, Malibu had come on the scene with a coconut flavor. Above all, Bacardi gave up waiting for the brand to fail, woke up and came after us by introducing their version of spiced rum. Their proposition was that CM was for younger drinkers and their product was for the mature and serious rum aficionado.

The response was line and brand extensions with specific strategic roles. Each of the three extensions had an objective, which went beyond shelf space acquisition and copycat products. A silver version was introduced and replaced Captain Morgan Coconut, which was a feeble previous attempt to take on Malibu. Instead, that coconut product became Parrott Bay by Captain Morgan with it’s own imagery. Finally, Captain Morgan Private Stock was the upmarket entry designed to deal directly with the new Bacardi product.

Captain Morgan today

The overall Captain Morgan franchise, as managed by Diageo, is doing poorly. Their efforts seem to me to be all over the place with a range of line extensions that well, frankly, make little sense. Meanwhile, the base brand languishes.

From what I’ve seen, over the last ten years, Captain Morgan franchise grew at 3-4% compound annual growth rate but in the past five years it’s been flat to down. Further, the overall growth has been a function of line extensions at the expense of Original Spiced.

In fairness to Diageo, the marketplace has changed appreciably. There are a number of spiced rum brands and a few powerhouse new players, including Sailor Jerry and Kraken. Both these brands have strong taste profiles and imagery in tune with today’s drinker.

Yet, if you go to the Captain Morgan web page, you’ll find such peculiar and tactical line extensions like 100 proof, Black Spiced rum (a blatant Kraken lookalike), Lime Bite, Tattoo Spiced, Long Island Iced Tea and even plain old White Rum. Most of the line extensions (9 of them) appear to me to be declining and even hurting the original product. I’ve mentioned this a number of times on this blog – a line extension should feed the base brand, not eat it.

Perhaps Diageo should try to hire former Calvert people.

(I was not at Seagram when Captain Morgan was conceived and launched. So, I’m grateful to two people who were there and were kind enough to be interviewed for this posting. One is Alan Feldman who was in new products as the brand was born and who nurtured it in the beginning. The other is Sam Ellias, the first brand manager of Captain Morgan and the person widely recognized as the driver of its success in his Calvert Distiller days.)

(For other posting on Captain Morgan please use the search box at the top of this blog. Start with this one.)

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Seagram, Bronfman and Chivas Regal

“Edgar M. Bronfman, Who Brought Elegance and Expansion to Seagram, Dies at 84” is the headline from the The New York Times obituary.

I didn’t know Edgar Sr. (or the Chairman as he was known) very well but interacted with him on a number of occasions, mainly when Edgar Jr. was off doing his Hollywood thing.

A number of stories come to mind, particularly about his pride and joy, Chivas Regal.

On one occasion, when I was running US marketing, I was summoned (along with my new products guru, Sam Ellias) to his office to tell us about a new product idea for Chivas Regal. Apparently, on a trip to Europe to survey the state of the business there, a young brand manager suggested that Chivas needed to be more contemporary and she had just the idea for how to do it – a line extension with a more intriguing and youthful brand proposition.

Chivas Regal had been losing market share for years and any ideas to drastically change the brand’s fortune were usually rejected somewhere along the line. That the Chairman should be willing to embrace a new scotch brand under the Chivas banner was very welcome news.

Danu 2
Chivas De Danu

The brand manager in Europe suggested that we introduce a product called Chivas De Danu, named for a Celtic goddess who spent eternity with her youthful  followers living a life somewhere between bacchanalia and debauchery. (Not exactly right but close.) I suppose the idea was that if you drank Chivas De Danu, you would stay young forever and always get laid.

The Goddess
The Goddess

The problem was, the Chairman referred to it correctly when I first got summoned to his office, but kept referring to it in our meeting as Chivas Duna, as in Charlie the Tuna. Sam and I were perplexed and looked it up online (this was the late 1990s and even then, the world was at our finger tips). Sure enough it was Danu (as in Danube) not Duna.

Now, the hard part. We needed to tell him that while he got it right originally, a product named Chivas de Duna was not going anywhere in the market, after the laughter stopped. The product needed to be called Chivas De Danu.

Sam and I nervously set up a meeting with Edgar. Surprisingly, neither of us got our heads chopped off and he listened attentively to our information but remained a bit skeptical. He had a brand new computer in his office and was in the process of learning how to use it, so he challenged us by rushing to his computer to look it up.

He attempted to turn it on but nothing happened. He grew frustrated and angry and yelled for his secretary, Maxine, to “get that asshole from IT, or whatever they’re called, here immediately.”

Within moments (most of us waited days for help), someone appeared and sheepishly asked what was the matter. I recall the IT person had a look on his face akin to a prisoner going to the gallows and his knees were shaking so much, he could hardly stand. Before the Chairman could turn his palpable anger on the poor guy, Maxine interrupted and told Edgar he had a call. With a wave of his hand as he walked off, he indicated that we should work with the IT person to fix the problem and learn the answer.

The two of us hovered over the poor IT fellow as he tried to fix the Chairman’s computer. It took one second. He leaned over and tugged on the electric cord and showed us the computer wasn’t plugged in. “I thought so,” he said, “that’s what the problem was last week when I went to his home to fix the computer there.”

Computer fixed, information retrieved and there was the irrefutable evidence that the brand should be called Chivas De Danu. When Edgar returned and saw it for himself, there was a shrug. None of us had the courage to tell him what was wrong with his computer.

By the way, the brand failed miserably.

I blamed it on Sam Ellias.

(Another story about Edgar Sr. and Chivas Regal can be found elsewhere on this blog – August 7, 2011, titled “Chivas Gin?”)

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“Bartender, I’d like a hummer.”

What’s in a name?

A clever, memorable call name for a drink is what makes that drink popular. Where would Seagram’s Seven be without a 7 and 7 or, Peach Schnapps without the Fuzzy Navel?

Here’s one for the books.

drink9f-1-webFour middle-aged women are out for their every other week ladies night out. They are feeling a bit adventurous this particular evening and are chatting about what to have when the server walks up to their table.

Let’s listen in:

Server: Hi ladies. Can I offer you something to drink?

Lady #1: A glass of chardonnay would be nice.

Lady # 2: (To the group) You know what, girls? I’m going to have a chocolate martini. I’m in that kind of mood.

Lady #1: Great idea… please change my drink to that.

Lady #3: Do you have any of that Rum Chata?

Server: No, I’m afraid not.

Lady #3: Then I’ll just have sex-on-the-beach.

(They all laugh. The server smiles and says) Perfect choice for a cold winter night in Detroit. And you, ma’am?

Lady #4: I want a hummer.

All: A what?

Lady #4: What’s the matter? My friend Louise says her husband begs her for a hummer and I thought I would try one.

Lady #3: Isn’t a hummer a car? How do you go from that to a drink?

Server: (He has become very uncomfortable.) Uh, um, uh, ma’am do you know what a hummer is?

Lady #4: What do you mean? It’s a drink…right?

Server: I suppose… I’ll check with the bartender, but a hummer is also a car… and something that…uh, well something that men really enjoy.

Lady #4: Fiddle sticks. I’d like a hummer.

(The server leaves, goes to the bartender and says) You won’t believe this Sally… I need one sex on the beach, two chocolate martinis and, um, well, don’t get angry, a hummer. Lady at that table says she really needs a hummer.

Bartender: Take your mind out of the gutter! A hummer is a drink born in Detroit that includes rum, Kahlua, ice cream, some ice and all blended together.

Server: Oh.

For those of you who have missed the nuisances of the story, go here.

The Hummer
The Hummer

The Hummer 

1-1/2 ounces rum (usually Bacardi)

1-1/2 ounces Kahlúa

2 scoops vanilla ice cream

A couple ice cubes

Blend and serve in a 7-1/2-ounce rocks glass.

 

As for other meanings of the term “hummer” check with Cosmopolitan Magazine.

(Based on a true event.)  

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