You have been in your post for a couple of years now - what has changed in Cuba in that time?
Cuba is changing quickly. You need to embrace the changes and be a part of them. Gastronomic culture is developing and cocktail culture is not only looking at the past, they want to be part of a new cocktail scene. They have a sense of adventure.
Sales of Havana Club have been relatively flat in recent years. What is stifling growth?
We are selling around 4m case but a quarter of that comes from Cuba, which is not growing as a market. In Cuba there are 11m people and people drink more spirits than beer but there is a lot of bulk rum. Although the market is premiumising, with aged rums growing faster because of tourism but also local consumption. Southern Europe, particularly Spain and Italy are still in a difficult situation. At some point this will change. Spain has hit the bottom. [At present] we are building share [in Spain] but when sales are going down it’s never satisfactory. The overall economic situation is getting better with GDP forecast to return to growth. The economy comes first, consumption later - the consumers follow the pattern.
Are you sticking to your strategy of premiumisation and waiting for the markets to change or actively trying to find stimuli for growth?
We are not just waiting. We are developing the market in Germany – our largest market which has a trend towards rum right now - and Añejo Especial is now in France. It’s double aged and it’s a sweeter style but it is Cuban rum that is natural flavoured. It’s not as sweet as rums from South America. We are in between whisky and sweet rums. But we need to be true to ourselves and be a Cuban brand. In a world where there are many rums of quality, we are distinctive.
Only 3% of rum falls in the $20+ category. Will rum ever catch up with the likes of Cognac and whisky and is premiumisation the only strategy for Havana Club?
The potential is why we are positive. It’s bound to happen for rum. Some consumers are getting more savvy but the general public does not yet know what rum can offer in terms of quality. We are the leader in the $20+ point with Havana Club 7. Premiumisation has not happened because the industry was not structured to let it happen. Rum does not have the multinationals of other industries. We only started 20 years ago and we have taken Havana Club from 400,000 9-litre cases to 4m cases. There has also been a rebirth of cocktails and a trend to sweeter spirits and diversification. There’s room for more variety. There will always be consumers which want to make their cocktails like they are made in Havana.
Which of your markets are showing the most promise?
We sell in 120 markets and only a few are declining. France and Germany are growing in double digits. There are developing markets in Eastern Europe and Asia. The Mojito is a big thing in Shanghai and Beijing and South Korea, which is not a big cocktail market but now people consume by the glass. In South Africa there’s a cocktail trend, which is the first thing to work with. In Africa [more widely] all the international spirits have still to be developed.
As we have seen with Bacardi’s current campaign, Cuban heritage is very marketable. How is the creation of the Cuban geographic denomination going and what other plans do you have to protect the use of the word ‘Cuba’?
The rum authorities in Cuba have worked on the definition. It was not officially formalised before a few months ago. This will protect the quality of the rums in the long term. [Bacardi] is not saying they are making rum in Cuba. We also have the green seal on the bottle, which Cuban rums must have.
Are there any signs that the US-Cuba trade embargo will be lifted under Barack Obama?
We are not involved [in discussions] but we have been clear that we will be the first to sell Cuban rum in the US, with Havanista. Personally, I believe the embargo will be lifted at some point. We have a lot of Cuban Americans coming here – they are the biggest visitor group. The embargo seems like it is of another era but how you solve it from a political point of view is not for me to say. The states will find a solution.
