Captain Morgan Brings Swashbuckling Energy to the FMB Market
By: Joshua M. Bernstein
On the second to last Saturday in January, swashbuckling pirates swarmed Tampa, Florida, for Gasparilla, the world’s largest pirate-themed festival. Around 300,000 people attended this year’s parade and revelries, many decked out in their skull-and-crossbones finest and drinking modern pirate grog: Captain Morgan rum, a longtime partner of Gasparilla.
“[Captain Morgan] is a perfect fit for this consumer base. People attending Gasparilla are wild in the fun sense of the word. It’s just a great time and this brand’s energy matches the festival’s celebratory vibe,” says Nikhil Sha, the Premix Brand Director for Diageo. In addition to festive rum cocktails, partying pirates could be among the first to try Captain Morgan Sliced in tropical cocktail-inspired flavors. Released nationwide this spring, Sliced is the brand’s first foray into flavored malt beverages (FMB), a chance for the Captain to cut a familiar path through a crowded market.
“This is a category that is really driven by flavor, and Captain Morgan is known to be full-flavored,” Shah says, adding that 45 percent of Captain Morgan consumers already drink FMBs. “We saw this as a natural marriage between what’s going on with a category and what the Captain can do to disrupt the category.”
Looking Beyond Spirits to Find Fresh Sales Opportunities
FMB sales are surging, increasing nearly 18 percent in 2023, according to the market research firm NIQ. In part, the growth can be credited to the malleable nature of FMBs, which include hard tea, lemonade and seltzer. Ferment a clean malt base, and breweries and beverage companies can meet drinker’s boldly flavored desires by drawing on familiar taste profiles and brands.
Building an FMB brand from the groundup can be a slog. Instead, companies are creating malt-driven analogues based on beloved name-brand spirits. Jack Daniel’s now offers the County Cocktail family of FMBs, in a variety of punches and hard teas, and Sazerac Co. makes malt-based Southern Comfort and Fireball variants, little shooters sold at supermarkets and beer stores. With Sliced, Diageo is looking to “bring that Captain Morgan equity as a great maker of cocktails,” Shah says.
The Sliced Variety Pack is comprised of a quartet of approachable, vacation-mindset cocktails, familiar to anyone who has partied during Mardi Gras, dined at a Mexican restaurant, or gone on a tropical beach vacation. The moderatestrength Sliced Variety Pack – cans are 5.8% ABV – features fruity FMBs in four mouth-watering flavors: Strawberry Margarita, Pineapple Daiquiri, Mango Mai Tai and Passionfruit Hurricane.
Delivering a cocktail-like flavor and experience sans liquor can open sales avenues to new venues like convenience stores, supermarkets, and beer stores. “As we build distribution, we’re going to be in thousands of places that Captain Morgan could never be in because of the state-by-state regulations,” Shah says.
This is especially true in states that separate sales of spirits from beer and wine, including New York and Pennsylvania. “It’s always been the joke in Pennsylvania that if you’re having a party, you have to make two stops: one at the beer distributor, and one at the liquor store,” says Kelly Davis, a brand manager at Origlio Beverage. “It’s an advantage to have a liquor brand with the brand name Captain Morgan in a malt-based setting. Maybe that cuts down on one trip for a consumer.”
Tackling Single-Serve Cans and Slushy Machines with Higher ABV
In recent years, the single-serve can has emerged as a reliable driver of revenue at convenience stores. Single-serve cans of strong FMBs, typically 8% ABV and above, cater to consumers seeking instant gratification at the end of their workday, or before heading out for the night. “People are looking for easy, accessible cocktails,” Shah says, “and they’re flavor seekers.”
“As we build distribution, we’re going to be in thousands of places that Captain Morgan could never be in because of the state-by-state regulations.”
— NIKHIL SHAH, Premix Brand Director for Diageo
Diageo is positioning the Sliced brand to play in the single-serving occasion with Sliced Up, a stronger, 8% ABV version sold in 23.5-ounce cans in two flavors, Tropical Hurricane and Long Island Iced Tea. “With single-serves, it really does come down to brand name, flavor and price,” Davis says.
Another opportunity for the Sliced Up brand is the slushy machine. In and around the Philadelphia region, beer stores are installing slushy machines to sell FMB brands, like Seagram’s Escapes and Smirnoff Ice, in frozen form. One beer store, Shangy’s, in Emmaus, Pennsylvania, added an alcoholic slushy bar in 2020, and it now offers 30 hard slushies, which are sold to-go. (Shangy’s also operates a slushy parlor at its second location in Macungie, Pennsylvania.) “Slushies have become such a big part of our business, especially when it comes to FMBs in 24-ounce cans,” Davis says. “That’s what retailers are using.”
In particular, retailers are looking for well-priced FMBs that deliver on big flavor and color. People first drink with their eyes, and slushy machines churning vivid purple, red, yellow, blue and pink FMBs offer a visual sales pitch. “I can’t tell you how many times we release a new 24-ounce can and the first question that I’ll get from the sales team is, ‘What color is the liquid?’” Davis says.
After ABV, color and flavor, the last differentiator in the slushy aisle is brand name. A Captain Morgan slushy is simply an easier potential sell, especially with the implicit tie to spirits. Chances are good that people will “pay $8 for a Captain Morgan Tropical Hurricane slushy because it’s Captain Morgan,” Davis says.
Later this year, Diageo will look to bring Sliced into concerts and sporting events, including college football and NFL games. Why mix cocktails when it’s easier to fill a tailgate cooler with several 12-packs of Sliced? “Many FMB consumers are looking to live in the moment,” Shah says, and the fun-loving Captain can lead the charge on Friday nights, from rum cocktails to FMBs. “We’re reminding folks that Captain is more than one man, more than one icon. It’s a platform.”
Sliced’s Standout Label Design
A brand extension entails more than identifying drinking occasions, perfecting flavor profiles and settling on a memorable name. An oftoverlooked, though equally crucial element is package design. In the ready-to-drink category, across spiritsbased cocktails and malt-based FMBs, there’s “a sea of sameness” when it comes to design, according to Nikhil Shah, the Premix Brand Director for Diageo. To help the Sliced line stand apart at retail, the Diageo team looked to evoke the relaxation of lounging beachside beneath bright sunshine. The Sliced can designs partner an appealing pastel blue with warm colors that correlate with each variety’s signature fruit, such as yellow for pineapple. “Visually communicating the balance of lightness and full flavor was really important,” Shah says.