Why Sailor Jerry is Bullish on Rum’s Future

Named after Norman “Sailor Jerry” Collins, Sailor Jerry spiced rum recently announced that it has surpassed 1 million annual case sales, an increase of 3.8%. In addition to that milestone, the brand announced a multi-year partnership with Harley-Davidson, creating custom Sailor Jerry motorcycles in collaboration with acclaimed tattoo artists. The bikes will be available this summer through a sweepstakes promotion.

I recently spoke to Senior Brand Manager Josh Hayes about the brand’s success and the rum category in general.

Beverage Dynamics: Why is a brand like Sailor Jerry so strong in today’s market?
Josh Hayes: Right now the bulk of our sales are in the U.S. (79-80%), and we’ve been increasing sales since the start of the recession when our industry switched from a vodka-heavy world with bubble gum flavors to brown spirits. American Whiskey saw a lot of that growth, but it was ultimately people gravitating toward substance, meaning and history. Sailor Jerry was able to bridge that gap because we’re based on a real guy and have a lot of authenticity in the brand. Consumers craved that meaning and substance behind the brand, which has helped our trajectory all the way through the present day.

BD: How are consumers reacting to the rum category, specifically spiced rum?
JH: The rum segment is definitely hurting, but the spiced rum part of the category is a bit like Irish Whiskey. There’s one big player that dominates the market, like with Jameson. We have Captain Morgan at six million cases, and we’re the number two brand in the category. One big brand can really influence the entire trend for a category – and we see a little bit of consumer fatigue with what’s happening with Captain Morgan. They’ve loaded up the pipeline with innovations over the past few years, but we’re the ones pulling the category along in terms of value and volume. They’re a little bit of a lower proof than us, and we have authenticity for our made-in-America product founded by an American.

BD: That reminds me a little bit of Tito’s a few years ago before the brand really started taking off. Domestic vodka has Smirnoff, and no one else was really close.
JH: When people say everything right now is about brown spirits, it’s true from a headline standpoint, but it’s not true when you look at vodka and what’s happened with Tito’s. We liken ourselves to them because we’re both American products, we both have authenticity, and we’ve both stuck to our original formula and not introduced flavors. We really share those values with them.

BD: What are the biggest challenges right now for Sailor Jerry?
JH: From a retailer standpoint, creating value is our biggest concern. We want to make a product that consumers want, but also one that retailers want. We can’t just talk to consumers – we need to involve the trade as well. Some of the pricing games we see, not just in rum but overall, mean that retailers aren’t making money – 1.75-liters sold at half price or two-for-one, for instance. We view our retailers and distributors as partners, which sets William Grant apart as a company. We don’t just want to sell bottles, we want to make sure everyone is making money as well. We have to make sure our retailers are really engaged.

BD: What activation programs do you have on the horizon?
JH: We’re really excited about our partnership with Harley-Davidson, which was an implied partnership for a few years on a local basis, but is formalized this summer. We’ve already gone to retail, events and bars – really every touchpoint with them. They have more than 7 million followers on social media, which is an expansive audience, and the conditions are right for those consumers to embrace our brand. We’re going to Sturgis next month, and we had a big bike rally to launch the partnership, which we see going for several years to come. We have actual motorcycles at retail, designed by tattoo artists, which consumers can win. And we’ve been getting out the message through the more than 600 Harley dealerships around the country.

We’re also very loyal to our military followers, since our founder was in the Navy (hence the “sailor”). We’ve raised more than $400,000 in the past seven years for military causes. We have a partnership now with the USO as well, giving us a footprint at Fleet Week. That kicked off in New York over Memorial Day weekend, goes down the east coast and then up the west coast. It’s a great opportunity to engage with sailors during what’s often called their “spring break.” And this year we had a kickoff concert on the USS Intrepid in New York featuring Alabama Shakes, which was a lot of fun.

BD: What innovations are on the horizon for the brand?
JH: We’re going to have a special release next year around the Harley Davidson partnership with some limited edition packaging. We’re also going to be evolving our regular packaging to emphasize the hula girl, which really resonates with consumers. That’ll help increase recognition on the shelf and differentiate us from brands with similar packaging that have cropped up. We haven’t launched any flavor extensions, but we’re always looking at opportunities. I can say that if we launch something it won’t be bubble gum or popcorn – it’ll be something that makes sense for the brand.

Jeremy Nedelka is editor of Beverage Dynamic magazine. Reach him at jnedelka@epgmediallc.com

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