The Captain has left the building

The last posting about Seagram and vodka neglected to point out that while there were difficulties in the category (pre Absolut) the company had phenomenal growth with Seagram’s Gin, Crown Royal and Captain Morgan.

In fact, Captain Morgan is a case study — in spirits and other businesses — about how to develop, nurture and grow a brand when all oars in the water are pulling in the same direction. I’ll go into this in more detail another time.

For now, let’s look at some numbers.

Currently, Captain Morgan Original Spiced Rum plus Parrott Bay sells over 6 million cases in the US. But, for the first time in its history, the brand had a down year in 2009. This is probably due, in part, to the economy but also a function of the growth of Rum brands like Sailor Jerry and Admiral Nelson — both brands grew by double digits from ’08 to ’09.

Further, from the birth of the brand until the close of Seagram, Captain Morgan had a Compound Annual Growth Rate of over 16%. For the past 8 or 9 years the CAGR was less than half of that.

Could be due to a number of things…a new generation of drinkers with new Rum tastes and interests, a changing competitive climate, the inevitability of brand life cycles, portfolio focus elsewhere, all of the above and other reasons.

For those who worked on the brand back in the day, I’d bet that among the most vivid recollections is hitting the million cases mark. It took well over ten years for the brand to hit that number in 1995. But it took much less time to hit two million cases.

In fact, between the planning for a million cases celebration and the event itself, the brand doubled its volume.

That, my friends, is called momentum.

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The Captain and the Retailer

Here is another story from Bob McBreen…

An East Coast retailer persuaded Seagram to hire his son. He started his career like most, calling on stores during the day and doing on-premise promotions at night. On this particular night he was working a Captain Morgan drink night and since he was the “new guy” he had to wear the captain suit.

It seems that he had a bit too much to drink, and in direct violation of company policy he decided to drive home instead of finding alternate means. Shortly after leaving the bar, with his reactions a bit dulled from sampling the Captain, he rear-ended the car stopped in front of him at a traffic light. Realizing that he was in a bit of trouble he decided that his best course of action was to get out of there as quickly as possible. He left the car and ran to a nearby business where he caught a cab home.

Once safely home he made another fateful decision and called the police to report that his car was stolen. This was just about the time that a police car rolled up to the scene of the accident. When the officer asked the driver of the car that was rear-ended what happen he said that he wasn’t really sure but the guy driving the car that hit him was dressed as a pirate and ran away.

As you can imagine it didn’t take long for law enforcement to figure out what happened and a few days later the young Seagram recruit was back working behind the counter at his family’s liquor store.

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Captain Morgan and modern day Caribbean battles

The Captain is a fascinating brand. When I was first introduced to it, as a marketer I thought, “a cartoon character on a liquor bottle?” I soon learned that its strong following among consumers set an industry standard for growth. In fact, between the time a million case celebration was planned and held, the brand had grown to 3 million cases.

The story behind the brand and its double-digit growth for so many years make it a wonderful case study about the industry and new products. (I’ll get into it some other time.)

It shouldn’t come as a surprise, therefore, to learn that I’m closely following the “battle” over the current brand owner’s decision to move the production from Puerto Rico to the US Virgin Islands. Lots of “volleys” back and forth via press releases, lobbying, congressional involvement…in other words, quite a skirmish.

I’m not sure I get it all but as in most business issues, it’s about the money.

Without taking sides, and hopefully in a nonpartisan way, I have a few observations.

First, a friend and colleague who was instrumental in the birth and upbringing of the brand recently mentioned that in the beginning, Rums of Puerto Rico (the island’s marketing arm) wouldn’t recognize Captain Morgan as a “legitimate” Rum. It wasn’t until the brand started to grow significantly that it was able to share in the marketing support dollars. They’re now fighting to keep it in PR. Ironic isn’t it?

Second, I always thought that when you change distillery locations the product changes. That’s what the production folks in Scotland always told me. More recently, some production friends have said “no way; we can replicate any taste anywhere.” Say it isn’t so…I still believe in the tooth fairy.

Finally and most ironic, despite having facilities in Jamaica, Seagram first began producing Rum in Puerto Rico in the 1950’s to take advantage of the economic incentives that were offered.

What goes around comes around.

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