No one likes to be number two, it is said, but from the perspective of those in charge of marketing rum in the U.S., second place is a very comfortable position to be in.

Among Bacardi’s POS lineup of materials is this Mojito promotion.

“We’re still very bullish on rum; we’re still undergoing great growth and outperforming total spirits,” said Captain Morgan brand director Brad Essig. “Young adult consumers looking for something more flavorful and better quality as they move away from beer are coming to rum.”

Of course, being second only to vodka in the spirit category in the early 21st century is a coup for the rum category — only 13 years ago, rum sales were just over half of last year’s 22.8 million cases sold nationally.

After years of exceptional increases, rum’s growth slowed somewhat last year; after a 6% leap in 2005, growth backed off a bit to 3.5% in 2006. Still, 22.8 million cases is impressive, and the growth which has continued for 12 years has solidified rum’s place ahead of cordials, the third place spirit category.

Driving that growth? Latin American cultural influences are surely a key part of the surge, as can be seen in the rapid evolution of the Mojito cocktail from a specialty offering available mainly in Cuban-themed restaurants to a featured player in most restaurants and bars and as well as a new favorite made at home.

Lately, the Caipirinha, a similar cocktail made with the Brazilian rum cachaca (see Sugar Cane Madness sidebar) has taken the cocktail world by storm. Both of these drinks are superbly adaptable to flavored rums as well, creating a double barreled promotional vehicle for marketers. (Of course, rum is still consumed mostly mixed with cola, both in on-premise locations and at home — for all the trendiness of the Mojito. Marta Garcia, senior marketing manager for Bacardi Traditional Rums, points out that it’s Rum and Cola that is still the flagship beverage for rum drinkers.)

The other driving force, of course, is flavors, and the big players continue to add new iterations hoping to extend their presence on retail shelves. Bacardi just added Red Peach to its lineup of lemon, orange, raspberry, coconut and apple flavored brand extensions; Captain Morgan, itself a spiced rum, offers its line extension Parrot Bay in four flavor variations — coconut, mango, passion fruit and pineapple; Malibu Coconut just added Tropical Banana to its other flavors, mango, passion fruit and pineapple; and Cruzan tops out with nine different flavors now that they have just added a new flavor, Black Cherry.

Scene from Captain Morgan’s recent social responsibility TV ad, “Pizza.”

Like in many other categories, the top few leading brands dominate rum sales. Bacardi’s various expressions accounted for 9 million cases, while Captain Morgan and the brand’s Parrot Bay flavored cohorts rang up 5.536 million cases. Indeed, these two brands not only lead the rum charge, they are two of the three leading spirits brands of any kind in the U.S., sandwiching Smirnoff vodka at the top of the list.

With Malibu’s flavors accounting for an additional 1.52 million cases, those three brands alone pushed through about 70% of rum sold in the U.S. Add another Bacardi-owned rum brand, Don Castillo, the fourth best-selling rum in the U.S., and it’s clear that the strategies of the major players have left little room at the top for aspiring competitors.

Still, newcomers can look to Cruzan, which has been lodging double-digit growth for most of the last 10 years. On the strength of its flavor positioning, Cruzan climbed 11.2% nationally last year to 585,000 cases. As some rum lovers look for more sophisticated options, smaller brands are creating a buzz of their own among fans.

At Bacardi, the big push currently is tied to the Mojito, according to Marta Garcia, of Bacardi Traditional Rums, the line that includes Bacardi Superior, Bacardi Gold, Bacardi Select and Bacardi 8-Year Old.

“The Mojito has become such a big summer seller for us and for rum in general,” she said. Bacardi’s retail executions on behalf of the cocktail include POS and case displays that feature video loops explaining how consumers can make better Mojitos at home. At retailers where possible, Bacardi likes to tie into a store’s produce section where mint and limes are sold, a cross-promotional tactic many winemakers have found useful.

For Bacardi 8 and other aged rums, Garcia believes growth will follow more experimentation and education for consumers. “In south Florida, for instance, Bacardi 8 is huge, but that’s because so much of the population is more used to the experience of aged rums than the mass market, where clear rums are what are best known. It will take some time, and word of mouth; this is the kind of rum Scotch and Cognac drinkers cross over to.”

Other new brand activity is percolating up for Bacardi — the new Rubi Rey Reserve, a single barrel finished reserve white rum, is quietly entering the market; and in south Florida, Havana Club, a brand Bacardi is able to sell only in the U.S. (in most of the rest of the world, Havana Club is produced in Cuba and marketed by Pernod Ricard), is a big hit, according to Garcia.

According to Essig of Diageo, Captain Morgan Original Spiced Rum “is still undergoing fantastic growth; we’ve had double-digit growth for 14 consecutive years.” With the brand focusing its marketing and advertising attention on men aged 21 to 29, television advertising continues to be key. Two executions are currently running on cable TV, with one of them focusing on responsible consumption.

There’s a uniformity that runs throughout all creative, whether TV, print, marketing or retail promotion, he says. “In all of our spending, we utilize the Captain Morgan pose, and the catch phrase – ‘Get a little Captain in you.’” In fact, retail promotions currently include The Captain Morgan “Ultimate Pose-Off,” where consumers are invited to create videos or photos of themselves in the classic Captain Morgan, knee-on-the-barrel pose.

As popular as Captain Morgan is, Essig says the battle for placement is on every marketer’s mind. “Shelf space hasn’t grown yet the number of new product entrants each year does; even we added a new one last year, our Parrot Bay Passion Fruit. This makes it even more important for us to get the equation right for our retailers and our pitch compelling to the consumer.”

For the fall, both Bacardi and Captain Morgan will focus heavily at retail on Halloween promotions.

With its recent launch of Malibu Tropical Banana in May, Pernod Ricard has continued re-energizing the Malibu line, said Lisa McCann, senior brand manager at Pernod Ricard for Malibu.

“Even though there’s a lot of clutter out there in terms of flavors, we felt that we needed to do something to keep Malibu relevant. Tropical Banana is a natural fit for the brand, and this one links directly to its Caribbean essence.” Cocktail creation is key to the launching of new brands today, said McCann, both to make it easy for on-premise accounts to offer satisfying cocktails, but also to aid retailers in recommending home use for consumers.

In creating Tropical Banana, Malibu was looking for a flavor that wasn’t already widely taken — of the major brands, only Cruzan offers a banana-flavored version. (Tropical Banana uses the original coconut flavored Malibu as its base.) And while shelf space is surely an issue for any new product during such competitive times, McCann says she believes that Malibu’s high recognition factor, plus Pernod Ricard’s level of investment and the pull they aim to create on-premise from consumers will make for a winning combination. In advancing the product’s usability, Malibu has added recipes to the back of the labels.

“We’re making a huge investment in the launch,” McCann said, supporting it with television, radio, print and trade ads. There’s also a dynamic online contest seeking the most creative video rendition of the iconic song, Banana Boat (Day-O). The How do you Banana Malibu? Competition will be hosted on YouTube.com, the world’s most popular video-sharing Web site.

Another new flavor launch comes from Cruzan. Emma Medina, brand manager for Cruzan Rums, said the company expects their latest, black cherry, to be a big summer hit. “Black cherries are a flavor very reminiscent of summertime, so we’re very excited about its prospects.” (Banana, citrus, coconut, mango, orange, pineapple, raspberry and vanilla are already in the Cruzan portfolio, part of the Absolut Spirits Company since last year.)

Cruzan plans to continue for the fourth year its promotional campaign tied with country music star Kenny Chesney, who lives part of the year in St. John in the U.S. Virgin Islands, (Cruzan is made in neighboring USVI St. Croix.) In addition to Cruzan giveaways like flip flops at 57 of Chesney’s concert dates this year, Cruzan’s fully integrated campaign will include retail stand-ups of Chesney, case cards and consumer giveaways.

Besides these higher-profile brands, other rums gearing up for growth include traditional brands like Ron Matusalem, currently increasing its marketing efforts under the umbrella of Skyy Spirits. Founded in 1872 in Cuba, the brand is now made in the Dominican Republic and was relaunched internationally in 1997 in three expressions: white Platino, and two aged rums, including Classico, matured using a 10-year Solera method, and Gran Reserva, aged similarly for 15 years. And then there are the additional large-volume rums (Ronrico, Barton) and other premium entries with flavor lineups (for example, Admiral Nelson Spiced Rum, which also comes in Coconut, Raspberry and Vanilla) that continue to help drive sales of the category forward. Indeed, as long as American consumers maintain their attraction to enhanced flavor, it seems that rum sales will keep rising.

About 70% of all rums sold in the United States come from Puerto Rico, including some of the best-known and best-selling names in the industry; specifically, Bacardi and Captain Morgan. The quality of Puerto Rican rum is based on four factors: fermentation, distillation, aging and blending.

Rum making in many countries is a seat of the pants business — few laws restrict the rum maker’s choices. What distinguishes Puerto Rican rum from others is that, by law, all Puerto Rican rums must be aged a minimum of one year in charred white American oak barrels. This practice is said to produce a smoother rum. The lighter rums tend to be more delicate, which accounts for their mixability, while the darker, more aged rums can be consumed like an aperitif. (Source: Rums of Puerto Rico)

While the major rum makers are busy churning out a myriad of fruit varieties, hoping to catch the flavor phenomenon in a bottle, many entrepreneurs are putting their money down on the Brazilian sugar cane spirit called cachaca.

While technically a rum, cachaca mainly differs from most other sugar cane spirits in its source of fermentation; instead of using molasses, a sugar-making by-product and the precursor of most rums, cachaca is made from sugar cane juice alone. That doesn’t necessarily mean the product possesses higher quality; in fact, in Brazil, cachaca’s reputation is often that of a cheap and potent firewater, unsophisticated and raw.

But many of the cachacas recently imported are customized for the North American market, with greater attention paid to crafting smooth, slightly sweet products without the “burn” most Brazilians expect from their favorite brand.

In the past few years, new brands — Beleza Pura, Boca Loca, Cabana, Cuca Fresca, Fazenda, Leblon, Sagatiba — have been pushed by small companies looking to get an edge in what they hope is the next big spirits market. Targeting high-profile bars and nightclubs for the most part, these brands are jostling for space and press attention and, ultimately for some, a pick up by major firms. So far, the big spirits companies have stayed away, but recently, two brands — the relative newcomer Agua Luca and old standby Pitu — signed deals with national suppliers, with Agua Luca hooking up with Heaven Hill, and Pitu joining the small spirit portfolio of wine-driven Winebow. (Ypioca, another brand with an established presence in the U.S., is imported by Henry Preiss, and P-51, one of Brazil’s most popular brands of cachaca, is handled by Sazerac.)

The driving force behind the mini cachaca boom is the Caipirinha, a simple cocktail made with muddled limes, sugar and cachaca that has become a popular summer refresher in many bars and restaurants, especially those with a Latin connection. As with Mojitos and other 21st century cocktails, versions with fresh fruit added have become very popular in bars and restaurants, as the drink is easy to make well, and is a pleasant, Daiquirilike refresher. And the cachaca entrepreneurs aren’t simply pushing the cocktail concept; one of them, Excalibur Enterprises, importer of Beleza Pura and a host of aged cachacas, has launched a pre-mixed Caipirinha for retail.

Hoping to ride the wave of rum’s steadily surging popularity are some newer high-end and niche brands, including many well established in their home countries but barely known in the U.S.

At events like the second annual International Cane Spirit Tasting Competition, held in March in Ybor City, Florida, many of the medal grabbing rums came from Caribbean basin countries like Venezuela, Guatemala, Belize, Anguilla and the Cayman Islands, places not well known for their distilling expertise but with a great rum heritage. Some of these spirits, matured in cooler regions and at higher elevations than those coming from the rum powerhouse islands of Puerto Rico, Barbados and Jamaica, benefit from longer aging and showed that aged rums can develop a broad range of rich flavors.

Some of the winners in the Ybor City event are little known here, but worth seeking out if expanding your rum reputation is a goal. Rums like Ron Zacapa from Guatemala, Diplomatico, Ron Macuro and Santa Teresa from Venezuela, Traveller’s One Barrel from Belize, Pyrate from Anguilla, Tortuga from the Cayman Islands and even a Tennessee-made favorite (Prichard’s), placed high.

For example, Moët Hennessy USA has targeted the high end with their 10 Cane, a Trinidad-made rum aimed at the luxury spirits consumer. Likewise, Diageo has developed Oronoco, similarly made in the rhum agricole style using pure sugar cane rather than molasses as the fermentation base.

From Martinique, two rhum agricole brands are making waves. Clement has focused on hand marketing and building the brand onpremise through cocktail contests for bartenders, like one recent event held in New York, and another Martinique rum, Depaz, from Kobrand, is being rolled out in select markets as well. An added attraction for the Depaz brand is a flavorful sugar cane syrup well-matched for home cocktail creation, sold together where legal. The brand has also hired cocktail consultants to develop recipes using the rhum agricole.

Sidney Frank and Company has recently turned its attention to rum by launching both a light (White Sand) and a dark (Golden Sun) Tommy Bahama brand rum, made in Barbados by respected distiller R. L. Seale, and supported with radio ads and other marketing support capitalizing on the built-in name recognition of the immensely popular Tommy Bahama tropical clothing, décor and lifestyle line.

The flood of new rums into the market and the increased push for superpremium brands like Appleton (Brown-Forman), Brugal (Shaw-Ross) and Gosling’s (Castle Brands) has put pressure on traditional best-sellers like Myers’s and Mount Gay to hold their spots among leading rum brands. But if a rising tide raises all boats, then these rums are also well placed to grow in the 21st century.