It’s not about viability but profitability

West Indian Tobacco Company  (WITCO) boss Anthony Phillip knows how to market cigarettes. As Chairman of Rum Distillers, he is quickly learning the spirits business. “I am not on unfamiliar territory,” he said in a telephone interview last week. He said there was no alliance for Rum Distillers on the cards right now. He says he wants Rum Distillers to increase its local market presence and is looking at ways to do this. “It is a viable company and will continue to be viable,” Phillip said. “The question,” he said, “was not whether to talk about viability but about profitability.” “We already have a presence in the market and it is going to work,” he said. “We’re looking at the rum company as a restructured company and selling rum is going to be our business,” says Phillip. Phillip said the heart of the company is its aged rum. Caroni, had rum that was about 24 years old.  

“It takes a long time to sell such rum,” noting that he has to go out and find its own markets. The market for such rums, he said, lies in using it as an ingredient for other things (chocolate, for instance). It can also be used for blending with other rums, he noted. Phillip said the company wanted to concentrate on selling its bulk rums.  “I think that is where the market is.” He said he knows that such aged rum can only be sold in a niche market and acknowledges that  this is not going to be high volume market. “When I look at the market, Caroni’s rum can still put a dent in the competition,” he said, a direct reference to Angostura, the local rum company that thinks it has the local market sewn up. He was undaunted by trying to go up against Angostura though. “It’s a long distance but that is part of the business challenge,” said Phillip. Phillip is no novice to the rum business. He was also once in charge of the sugar refining unit at Caroni for five years and once worked as a sugar chemist at the company.

Some of Caroni products include, White Magic, Felicity Gold, Caroni Puncheon Rum and Stallion. Puncheon Rum ? “People still drink that.” “It is not that bad.” Told that these rums were not as well known as the competitors, Phillip was unperturbed. “You have to spend a tremendous amount of money to build a brand,” is how he put it. “It is what people will buy,” he added, stressing that the key to selling was creating a brand that customers cannot walk away from. He referred to El Dorado, a rum from Guyana, that has gained international recognition. “You have to pay for that,” Phillip said. “You may pay US$25 for that rum but $15 went into building the brand name.” Noting the company had spent a tremendous amount of money to build its brand name, Phillip said he was looking at ways to build Caroni’s brand image.   

“It is not a straightforward thing,” he said of the marketing and distribution of rum. He knows that the international market is difficult to break into. On whether Caroni’s rum could make any impression in any market — local and international — he said it was never too late. “We have to find ways and means to compete,” he noted. Asked why the company was still in first gear, Phillip dismissed such a suggestion, saying that company was putting things in place. “We’re very much in business,” he said. With the appointment of Rudy Moore in May  as CEO recently and now with an accountant on board,   the company is slowly putting the pieces of its strategic plan together. The rum business, he reasoned, was similar to cigarettes.  He described both rum and cigarettes as Fast Moving Consumer Goods (FMCG) and says that the marketing formula does not change.     

“People like alcohol and cigarettes, he said, noting that this was what held the key to sales. “I am a business man with a reasonably good track record,” he said, referring to his position at Witco. Rum Distillers wants to maintain its profitability and should have its accounts published by the end of this year, he said. On the perception that Caroni’s rums were for an older generation, Phillip said it all had to do with how the product was marketed. Phillip said Caroni had no intention of going after younger drinkers to boost sales, adding that people have to make their own rum choice. “What we will try to do is get people to drink our brands before others,” he said. “Get the people who drink beer and whisky to drink rum,” he said.