Q&A with Havana Club CEO Jérôme Cottin-Bizonne

24 June, 2016

In which segments have you found growth?

The 3 year old is still the main engine of the brand. The Mojito is still a popular cocktail around the world. In the past five years there was a substitution of Blanco for 3 year old. Especial has grown quite nicely as well.

The big groups have talked of a slowing down of premiumisation and a need to optimise mainstream brands. Have you seen this in rum? It’s not what we see in rum. I’m not saying the trend is not true, but in rum we have not suffered this because there is a real thirst for quality products and rum is not as premiumised as other categories. We are a very specific case. Even the top rums we have are not luxury because Cuba is not luxury.

How is Asia developing?

Volumes are not big for the brand in Asia but China has a strong potential with its cocktail culture. Each time I go to China I see new bars. It’s still very niche but you have to start somewhere. Our product, with its quality and origin is very attractive to Chinese consumers. Rum is not as demanding as other brown spirits for the Chinese, and the Latin origin is exotic. There is very strong potential volume wise. We are very serious in the way we invest in China with Pernod Ricard.

Cuba’s economy is changing. With a quarter of your volume sold in Cuba, how is this shaping local sales? There are more and more private businesses, especially in tourism and restaurants. You do not have a week where there is not an international delegation coming to Cuba. Even the Pope was here. The hotels are fully booked a long time in advance. Planes are booked. This is having a very positive impact on our sales in Cuba. Our sales were in double-digit growth in 2015. You also see a mix improvement. There is a drop in Blanco and an increase in the rest of the range. This has a lot to do with tourism but also an increase in purchasing power. We see people moving from the Blanco to Especial – they are consuming at a higher price point. It’s a bit more than a million cases, which is important to the roots of the brand. The brand is strong because we represent Cuba. It’s an active market - there are more than 20 brands here but we have more than 50% market share here.

Entrepreneurship is on the rise in Cuba. Are we seeing small craft rums emerging?

No. Maybe one day. But Maximo at 2,500 bottles…this is uber-craft.

Bacardi has announced its Havana Club Puerto Rican rum is launching an añejo expression and is rolling out the brand nationally in America, in the name of “celebrating the peak of Cuban cultural resurgence”. How does that make you feel? I think you said it all - Puerto Rican rum. Whatever I say, I’m the guy from Havana Club so this is a good question for Cubans. How do they feel? They are getting emotional, it is their name and heritage and what they stand for taken hostage for pure commercial reasons.

If Havana Club ever enters the US is there a danger of confusion among consumers? We only want to have fair competition and be able to sell products [in the US] and ask the consumer to choose. One [Havana Club] is from Cuba and one is from Puerto Rico. The consumer will not be fooled.

Does the recent trademark dispute mean Havanista will be scrapped? Yes. When we were not sure whether we could get the license to renew our trademark we needed a back-up option, but now we have the trademark, Havana Club is the brand we want to push forward with.

Would you be surprised if you were not able to trade as Havana Club in the US in five years time?

We have no other information other than what is publically available. But if the question were ‘do I think it much more likely now that we will trade in the US than I did five years ago’, yes. It’s much more likely today than before December 14 (2015).

What do you expect the US market to be worth in terms of volume? 1m cases? The US is 40% of the rum market. If you look at our global sales you can do the maths. Long term we are talking about this kind of volume, maybe more.

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