Carlos Álvarez
Managing Director
Bacardi Mexico
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View from the Top

Maintaining Leading Position Requires Diversification

Thu, 08/09/2018 - 11:28

Q: As the largest privately-owned spirits company in the world, how does Mexico add to your global operations?
A: Bacardi brands are present in 170 countries and Mexico is among the Top 10 countries globally in sales of Bacardi rum. It is also one of our main markets in Latin America. The Bacardi rum brand has experienced significant transformation by connecting with consumers through a variety of new channels and our business in Mexico has grown at a double-digit rate over the past five years. In August 2018, we launched three new rum products: Bacardi Añejo Cuatro, Bacardi 8 y Gran Reserva Diez. We are convinced that rum is the next market to undergo premiumization and we want to be at the forefront of that industry change.
In Mexico, the premium segment comprises 30 percent of the liquor market. A premium beverage is a higher quality product, with fresher ingredients. The premium segment has also experienced double-digit growth in recent years and we expect these rates to continue for at least another five years. The Mexican consumer is changing and prefers to drink less but with higher quality. Mexican consumers also enjoy cocktails and food and beverage pairing. Both trends help the premium segment grow significantly. Although premium spirits are on the rise, growth depends on the category. Around 60 percent of the whiskey market is considered premium, for gin this percentage hits 90 percent and about 30 percent of the tequila market is considered premium.  
Q: What strategies have you put in place to strengthen Bacardi’s participation in the national market?
A: Bacardi leads the rum category and we are going to defend this leadership. Consumers know our brand and are loyal to it but there are new consumers that we can recruit. Our work in digital media is very important. We make a significant effort to help consumers identify with Bacardi through our social media content, which helps us build our brand. One of the advantages of being an over 85-year-old brand in the country is that we already have a base of consumers, so our job is to attract new ones.
Q: In January 2018, Bacardi announced the acquisition of Tequila Patrón. How will this impact Bacardi?
A: One way to grow and diversify is through the development of existing brands and the acquisitions of new ones. Tequila Patrón plays a key role in the premium, super-premium and ultra-premium segments. Tequila represents 30 percent of spirits sales in Mexico and is a segment that is growing rapidly. This acquisition helps to strengthen our portfolio and business opportunities.
Patrón is, and always has been, proudly produced 100 percent in Mexico by Mexicans. Foreign companies often have the financial resources to invest in the long-term success of a brand, increasing its ability to expand, to employ even more people in Mexico, to contribute to the community and further introduce tequila and the tradition and culture of Mexico across the world. We are also venturing into the mezcal market. It is a small category that is experiencing triple-digit growth rates so we are required to participate in that segment.
Q: How does Bacardi include sustainability in its business strategy?
A: In 2014, Bacardi launched an ambitious environmental sustainability program called “Good Spirited: Building a Sustainable Future” with specific goals in sourcing, packaging and operations by 2022. Building on current programs and efficiencies that reduce water and energy use and greenhouse gas emissions, the Bacardi global platform reinforces the company’s leadership in corporate social responsibility. The material derived from raw sugarcane that we use for Bacardi rums must come from certified sources, meaning that our suppliers cannot have a negative impact on the environment, cannot employ children, must comply with all laws and offer competitive wages. In addition, Bacardi is an integral part of trade and social organizations that combat issues of alcohol abuse, particularly underage drinking, binge drinking and drunk driving.

 

Bacardi is the largest privately-owned spirits company in the world. Founded in 1862 in Cuba, Bacardi is now present in 180 countries. The company has a wide portfolio of drinks that includes rum, vodka, whiskey, gin and tequila