Miami Herald article

[Ed Hamilton]

From the Miami Herald Mon, Sep. 27, 2004 with permission from the author.

Rum company jazzing up its image Venezuela's Ron Santa Teresa is making a renewed bid to conquer the U.S. market for 'sipping rums.' BY CHRISTINA HOAG choag@herald.com

It's no easy feat to crack the U.S. market with a new liquor brand. Just ask Henrique Vollmer, vice president of Venezuela's Ron Santa Teresa, which has long had its eye on American rum aficionados.''We made a couple attempts,'' Vollmer said. ``Then two years ago, we formally set up an importing company and got a distributor to introduce the brand in 11 states. But sales never really moved. So I decided to move here [to Miami] myself.''From a Brickell Avenue office, Vollmer is now renewing the push to win a niche for his high-end dark rums, long recognized by connoisseurs in Europe but virtually unknown in the United States.Armed with a new distributor, a jazzier marketing plan and the benefit of hindsight, Vollmer is finally starting to gain a smidgen of traction.U.S. sales are expected to reach 5,000 cases this year, quadruple last year's volume, he said. Next year's goal: at least 8,000 cases. The company, which has revenue of $40 million, produces a total of 1.2 million, nine-liter cases annually.THIRD RUM ARRIVINGVollmer acknowledges that his U.S. sales are barely a drop in the $4.3 billion rum market, which moves 18 million-plus cases a year. But he's encouraged enough to bring a third member of the Santa Teresa portfolio, Gran Reserva, stateside.The brand, which retails for $14, follows on the heels of the top-of-the-line, 15-year-old aged rum, 1796 Antiguo de Solera ($30), and an orange rum liqueur Rhum Orange ($15). Next up will be Arakú, a coffee liqueur, by year's end.COGNAC COMPETITOR''We're not battling Bacardi or Captain Morgan,'' Vollmer said. ``We're aiming at the higher shelf, with the cognacs and brandies.''Santa Teresa is not the only foreign liquor company that has struggled to break into the U.S. market, according to Edward Hamilton, author of The Complete Guide to Rum and Rums of the Eastern Caribbean. Although their products have been good, other brands from the Dominican Republic, Antigua and Venezuela have had uphill battles, too.The hitch is the three-tier distribution system mandated by law for foreigners: distillers must sell to an importer, who must sell to a distributor, who sells to retailers.Lining up a distributor isn't that hard. Getting a distributor to push the product is.''It's difficult because you're competing with other brands the distributor sells,'' said Hamilton, who has been studying the subject for the past eight years.``And the distributor is most interested in the big brands. They're not interested in making an investment in your product, so small brands don't get the marketing support they need.''That's why Vollmer decided last spring to start overseeing the portfolio's marketing himself.He hired a public relations company and lined up promotions such as tastings, charity events, fashion shows and arts exhibitions to plug the brand.And he doesn't hesitate to call on Venezuelan connections in the United States, including family and countrymen doing business here, to lend a hand. He even hosts a weekly travel segment on Miami's WKAT-AM (1360), the classical radio station.Vollmer, who runs the company with his older brother Alberto, is also scaling down the company's initial distribution ambitions. Previously, the brand was trying to break into 11 markets across the country. Now he's looking at just three: Florida, Texas and New York.That's daunting enough, said Vollmer. ''The Florida market is three times the size of Venezuela's,'' he noted.Santa Teresa is one of Venezuela's oldest family-owned companies, dating from 1896 when the Vollmers started producing rum at the family's sugar farm west of Caracas, Hacienda Santa Teresa.OLD PLANTATIONThe plantation, which still yields the sugar crop for the rums, was founded in 1796 by a Spanish count, Tovar y Blanco. The Vollmers have maintained the picturesque colonial-era house as a museum and keep its cellars packed with 100,000 oak barrels filled with aging rum. The company employs 300 people.The brand was largely unknown outside of Venezuela until the company started exporting to other Latin American countries, Europe and Japan in the '90s. It has been a particular hit in Spain, where it's now selling 40,000 cases a year. Earlier this year it also launched in Britain.Santa Teresa's export strategy aims to capitalize on the growing ''sipping rum'' trend, where the amber beverage is served neat or on the rocks similar to cognac, brandy and scotch, as opposed to a mixed cocktail.The Vollmers are also enthusiastic about the United States as Americans are proving fond of imported rum, especially the high-end type.According to the Distilled Spirits Council of the United States, rum imports ballooned 22.8 percent from March 2003 to March 2004, second only to growth in foreign vodka, up 23.2 percent.Sales of premium and super-premium rum are up by 4 percent; cheaper brands are down by 2 percent.Rum fans say Santa Teresa certainly has the quality to make a splash in the United States but success will come down to promotion.''Worldwide, they're considered one of the best. They are considered to be one of the most lovely sipping rums out there,'' said Kristen Wolfe Bieler, managing editor of Beverage Network Publications.``But branding is extremely important at all price points. Packaging is huge, too. People want to be told what to drink.''Vollmer knows the U.S. liquor store shelf is a crowded one, but this time around he's hoping to firmly wedge in Santa Teresa.''We used to see the U.S. as a huge monster that you didn't know quite how to go about getting into it,'' he said. ``But we've got very aggressive goals.''