Captain Morgan Sales Fall as Americans Drink Less Soda

I’ll have a rum and….ginger ale? Health-conscious Americans are trading sugary beverages like Coca-Cola for carbonated water, which is hurting rum sales, as they eschew the Cuba Libre — a longtime cocktail staple made with rum and cola.

Captain Morgan maker Diageo reported a decline in the rum brand’s sales in the U.S. during its fiscal year ending June 30. It reported a 5% fall in net sales of Captain Morgan in the U.S. The rum category as a whole fell 2%, largely driven by Captain Morgan’s poor performance.

“The rum category in the U.S. has been sluggish for a long time. Carbonated soft drinks has something to with this as people are drinking less of it,” Diageo CEO Ivan Menezes said at a briefing Thursday, according to media reports.

Menezes blames the decline in popularity of unhealthy sodas. Rum and cola “was a very popular strong drink,” he said, but now, “people are drinking less of it.”

Concocting rum cocktails that aren’t cola-dependent will be key to reviving the the category. “We are changing the drink’s profile to be less dependent on pure ‘with cola’ and into other drinks and we are innovating on it. It will not turn overnight. I expect the trajectory to get better,” he said, according to MarketWatch.

Diageo said it aims to introduce consumers to new ways of drinking rum, including mixing it with ginger ale (which has less sugar than cola) and iced tea instead of cola, the company told CBS MoneyWatch.

New science has linked soda to heart disease — and consumers seem to be heeding the warning.

Since 2012, Coca-Cola sales have grown by just 8%, while sales of flavored and carbonated water have grown 88% in the last six years, according to a Euromonitor report on carbonated drink sales in the U.S.

Information provided by CBSNEWS.COM.

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