UPDATE 1-Bacardi goes dark, adds flavors in US

Wed Mar 14, 2012 11:02pm GMT

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* Bacardi to roll out cognac, Cherry Noir Grey Goose, new rum flavors

* Hopes to raise prices in United States but says too early to tell

(Adds more details on new products, price increases, bullet points)

By Martinne Geller

CHICAGO, March 14 (Reuters) - Bacardi Ltd [BACLTD.UL] is trying to tap more into the dark side of spirits, launching its first cognac in the United States where it is known more for white spirits like Grey Goose Vodka and its Bacardi Superior clear rum.

Robert Furniss-Roe, president of Bacardi North America, declined to give any details about what brand name the cognac would carry, but said it was an example of what Bacardi was doing to address growing U.S. demand for dark spirits, like whiskey and cognac.

Vodka is by far the biggest-selling type of spirit in the United States but other products, such as bourbon, cognac and dark rums have been getting more attention.

Bacardi owns the Baron Otard cognac brand, but it does not sell the brand in the United States. The new U.S. cognac will launch in early summer.

Cognac is a type of brandy produced near the French town of Cognac. Bacardi will be competing with popular brands including LVMH's Hennessy (LVMH.PA), Beam Inc's BEAM.N Courvoisier and Remy Cointreau's (RCOP.PA) Remy Martin.

Bacardi is also launching Grey Goose Cherry Noir, the upscale vodka brand's first new flavor in five years, Furniss-Roe told the Reuters Food and Agriculture Summit on Wednesday. Existing flavors include lemon, orange and pear.

Furniss-Roe doesn't expect the trend of flavors, which has now made its way even to bourbon whiskey, to end anytime soon, though he admitted that unusual flavors had their place in time.

"It's a little bit like a massive boxing match. I think you wonder over time whether everything that's in the ring now will still be standing in five or 10 years time," he said. "I think people will always gravitate to things that make sense. I suspect that some of the more outlandish things that are out there are fads."

While Grey Goose vodka has been more cautious about adding to its repertoire, the namesake Bacardi brand is more adventurous. There are currently eight flavors of Bacardi and two more are on the way, Furniss-Roe said.

This year's new flavors will include Bacardi Wolf Berry, a mix of blueberry and wolf berry (also known as goji berry), and Bacardi Black Razz, flavored with raspberry and black sapote, a soft fruit native to Mexico.

Those flavors might appeal to the younger generation of drinkers, those in their 20s, who Furniss-Roe said are used to having a bevy of choices when it comes to food and drink.

"They are very demanding, very experimental and very appreciative of new flavors," Furniss-Roe said.

And to capture growing interest in weight-watching, the privately held company is launching several low-calorie drinks under its Bacardi Cocktails label of ready-mixed drinks. Two flavors will be Light Mojito and Light Pina Colada.

MIXED PICTURE

Furniss-Roe, who oversees Bacardi's business in the United States and Canada, said "the picture was still mixed" in terms of consumer spending and buying trends.

"It's certainly challenging out there, still, across many categories," Furniss-Roe said.

Like most food and beverage companies, Bacardi has seen increased prices for commodities. But unlike food and non-alcoholic beverage makers, spirits companies had a hard time raising prices to offset those cost increases. That is partly because the weak economy led consumers to go out to bars and restaurants less frequently and drink more at home. And when people buy alcohol at stores, they tend to be more price conscious.

As the U.S. economy recovers, Furniss-Roe expects to be able to raise prices "over time" this year.

"Where there are opportunities we will take them, but frankly I think it's quite early to say whether that's going to be the case or not," he said.

"It's one thing to raise your prices, it's another thing to hold onto it," Furniss-Roe said, noting that manufacturers might raise prices, but then be forced to offer promotions or discounts that dilute the price increases.

During the weak economy, consumers gravitated to packages in which bottles were bundled with glasses or shakers, Furniss-Roe said.

Bacardi, which also owns Bombay Sapphire gin and Dewar's Scotch, just celebrated its 150th birthday, as a family-owned company. It traces its roots to pre-revolution Cuba.

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(Reporting By Martinne Geller in Chicago; Editing by Gerald E. McCormick, Bernard Orr)

((martinne.geller@thomsonreuters.com)(646 223-6023)(Reuters Messaging: martinne.geller.reuters.com@reuters.net)) Keywords: FOOD SUMMIT/BACARDI

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