How a fledgling kiwi rum company snagged a distribution deal with Beam Australia
Monday, 30 September 2013
It’s April 2012, and Jamie Duff can’t get his rum into Australia.
He’s the CEO and cofounder of Stolen Rum, a boutique New Zealand rum producer he’s recently started with Roger Holmes. Inspired by a recent trip to Jamaica, the duo has created an unaged, fruity rum. It’s something a little different, and he’s getting calls from Australian bartenders asking to try it out. But he can’t get it through.
“Under Australia’s spirit importation laws, only rums aged for two years can be imported into Australia,” Duff tells SmartCompany.
So the founders of Stolen Rum did what any respectable rum producer would do. They decided to smuggle it in.
“We realised that if people just took it in their bags, they could take as much as they wanted provided it was under their liquor allowance. So we figured we wouldn’t sell it. We’d just write off the cost and use it to build relationships instead.”
In the papers they ran a small advertisement calling for “honest-looking” mules to carry the limited-edition rum into Australia. These mules were given directions about where to take the rum, and when they arrived at one of the boutique bars on the list, the bartenders made them a couple of cocktails.
It worked out well enough. Stolen Rum got a bunch of free publicity out of the affair, got its rum into the hands of some of Australia’s best bartenders, and built its fan base.
“Our approach has always been to find creative solutions to barriers,” Duff says. “The spirits industry is, in most countries, heavily regulated, and it’s got a lot of emotional and moral connotations too. It’s also dominated by large companies, who are happy to discount and spend to create barriers to their competition.”
But the rum sector of the spirit industry is relatively vibrant. It grew 4% in Australia this year, despite falling volumes in the liquor sector more broadly.
Stolen Rum is set to capitalise on that. Yesterday, the company announced it had signed a deal with Beam Australia that will see their products sold Australia-wide.
Around 10% of the Auckland-based company’s revenue currently comes from its Australian operations. Once this deal starts operation, Duff expects that figure to balloon up to 70%.
It’s not bad for a company that only started in 2010.
“It’s a huge break for us,” Duff says. “It enables us to reach a whole lot more Australians, and it’ll make our business global. We can’t wait to get our rum into the hands of more people.”
Duff started the business after a few years in London, where he developed a taste for rum while also being aware that none of his colleagues (he worked as a lawyer then) were drinking the same stuff he was. Rum is more popular in London than it is in Sydney or Auckland, but Duff noticed a lack of young, fresh brands. Most were old and tired, and played up the whole pirate theme.
Duff filed this observation away initially. But in 2010, he took the money he had been saving for business school and used it to start up a rum company in his native New Zealand instead.
While Duff had worked as a bartender for years, neither he nor cofounder Holmes had much experience actually making rum. But Duff says that was never the point.
“We were never going to be competing with whisky brands with 100 years of heritage who have been blending the stuff their whole lives. But we knew what we liked. We were seeking out a new generation who haven’t been exposed to rum, and we were coming at them with a modern approach.”
Duff and Holmes outsourced the distillation to some “excellent distilleries” in New Zealand. Despite the founder’s lack of distilling expertise, its rums have won gold medals at the San Francisco World Spirits Competition every year since 2010.
“We had to give people permission to drink rum,” Duff says. “In New Zealand, it’s fair to say it didn’t have a great reputation. As you Australians would say, it’s seen as a ‘bogan’ drink.
“But rum tastes good, and it’s a great cocktail drink. We had to make it cool.”
Duff and Holmes had one driving goal: their rum had to be accessible. They wanted smooth, soft rums that would appeal as much to wine drinkers as those used to liquor.
Rum is a strongly growing category, and most of that growth is in spiced rum, of which twice as much was sold this year than last. So it’s not surprising Stolen is launching its own spiced rum – a coffee and tobacco-flavoured concoction that’ll sell in Australia and America.
“Our spiced rum is part of a new wave of rum, it’s edgy and we think it’s what consumers want,” Duff says.
Aside from the rum itself, Duff and Holmes had one other goal. They wanted their marketing to be fresh.
Most of the world’s best rums are made in the Caribbean, which lends itself, quite naturally in the hands of a marketer, to the “pirate thing”. But smuggling stories aside, Stolen Rum has stayed away from that.
“It just didn’t feel right,” Duff says.
“My experience of rum was always urban, in little cocktail bars and back alleys in London. And if everyone’s clubbing around with one message, it’s really easy for us to do something different. For me, rum was a young spirit who lived in East London, and that’s what I tried to get across.”
Between 2011 and 2012, Stolen Rum nearly doubled its volumes, and Duff expects that to happen again this year. The company has opened a Sydney office, and when SmartCompany spoke to Duff, he was setting up another in Miami. Just nine people currently work for Stolen Rum, but the company is recruiting.
“We’re aiming to not only be the fastest-growing rum brand in the world, but to be innovative and create one of the most loyal fan bases,” Duff says.
With the Beam deal secured, that goal is one step closer.