The most influential Megatrends set to shape the world through 2030, identified by Euromonitor International, help businesses better anticipate market developments and lead change for their industries.Learn More
Is maturity induced decline irreversible? How can a seemingly clinically flatlining category exit the state of complacency suffered in the grip of the leading brand’s absolute dominance? Can a small regional player challenge an industry behemoth and not merely survive to share the tale but actually shift the balance of power in its favour?
This is not another story about craft beer’s ascent. It is the remarkable story of a small regional cream based liqueur brand that tinkered creatively with a recipe steeped in millennia of heritage to witness roaring success where Diageo struggled or even failed spectacularly. There were no major promotional campaigns, no Super Bowl commercials and no celebrity endorsements. And yet Rumchata succeeded in securing a fifth of the entire US market within 3 short years. Here is why it happened.
Going through the growth figures for cream based liqueurs in the US, the category’s proverbial cream appears to have curdled a long while ago. Top line growth – a concept more or less synonymous with leader Baileys’ fortunes considering that the brand historically accounted for almost half of the entire market’s volumes in the country– was uninspiring at best. For most of the past decade sales in the US swung between flavoured-launch driven short booms and macro economically driven troughs.
The landing of the Great Recession and the following explosion of interest in old-school cocktail recipes, craft spirits and flavoured bourbons would only push cream based liqueurs to the furthest corners of the drinks cabinet. Leader Diageo’s misguided attempt to revitalise the category through the introduction of super-premium (and now long discontinued and forgotten) Qream, appeared to be the final nail in the coffin.
Having recruited Pharell Williams to promote and support it, the launch was supposed to provide an aura of premiumisation to the stagnant category while being demographically focused on aspirational urban female drinkers. Packaging deficiencies, the lack of a convincing narrative and the patronising gender barriers raised by the brand itself proved catastrophic and it was swiftly and unceremoniously discontinued. The year was 2011. Ironically and while Diageo was signalling a retreat, Rumchata was only just beginning to make waves.
Based on a recipe dating back to the time of the Pharaohs and tracing its path through the Iberian peninsula and all the way to Mexico, the brand had authenticity and heritage in its pocket from the get go. That heritage was communicated in an unapologetically fun and accessible way, underscoring the brand’s exotic roots without being alienating or putting up rigid gender or age barriers.
But perhaps most importantly, the brand fostered ground-up experimentation instead of prepackaged top-down ideas. And with drinkers and bartenders using Rumchata instead of milk in their Sunday coffee, on cereal or even in gourmet recipes for French toast, word of mouth led to an enviable cult status. The launch of ‘cereal bowl glasses’ inspired by punters’ own imaginative commentary and drinking rituals only cemented the brand’s quirky irreverence and created a social media landslide which the brand is still surfing at the moment. Still growing by an eye-watering 85% in 2013, perhaps it is time for the brand to retrace its heritage back to its roots. Latin America and western Europe beckons.