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Cruzan Rum Enjoys Record Month for Production

July 20, 2005 – Etheldred Christopher, vice president of barreling at Cruzan Rum, said Wednesday, "When you have been with a company as long as I have, you feel with it. When it goes good, you feel good. When it goes bad, I feel a pinch right inside me."
Standing on the shipping docks beside Cruzan Vice President Marvin Pickering and barreling supervisor Julio Carmona Sr. as six 6,400-gallon tanks of rum were preparing to be shipped to Palm Beach, he acted more like he was being tickled.
All three men were enjoying a record month for Cruzan Rum. The company was shipping 71 bulk tanks of rum this month. The average in recent years has been 40 to 45 tanks a month.
Pickering, who's been with the company about 20 years said, "When I started, we were doing about 20 tanks."
Christopher, on the other hand, is an old timer, having worked 50 years for the company. He said, "When I began, we didn't even have tanks. We had barrels and loaded them on sloops." He added, "I remember when we got up to five or six tanks. We thought that was great."
Growth in recent years has been dramatic as Pickering presented some recent figures.
His numbers are in proof gallons. This figure is important because this is how excise taxes that come back to the Virgin Islands are calculated. Proof gallons are calculated on the basis of the proof of the alcohol. The 6,400-gallon tanks mentioned above contained 11,300 proof gallons.
Pickering said 2004 showed a growth of 5 percent from 2003, with proof gallons going from 5.7 million to 5.9 million. The year 2002 figure was 5.3 million proof gallons.
This translated in excise taxes returned to the Virgin Island as follows – 2002, $70 million; 2003, $75 million; and 2004, $78 million. The predicted return for this year is $83 million.
Another figure that had the Cruzan Rum personnel excited this week was that the company, based on shipments so far this year, was predicting shipping 6.3 million proof gallons this year — an increase of more than 8 percent.
The figures reflect what Pickering calls an aggressive campaign to market the rum. Pickering said, "We are going to sell this brand."
Some of the marketing was either done with farsightedness or luck. Cruzan Rum is in the process of sponsoring country sensation Kenny Chesney's second tour. Since Chesney signed on with Cruzan Rum he has twice been chosen Country & Western Entertainer of the Year. His present tour across the states, billed as the Cruzan Rum tour, is filled with sold out concerts.
Chesney has also given Cruzan Rum free publicity – mentioning it in more than one song. In his hit, "The Blue Chair," he sings that he ended up in the blue chair after drinking too many Cruzan rums.
All these things were in place before June when it was announced that controlling interest in Cruzan Rum was purchased by the makers of Absolut Vodka, a brand known for aggressive marketing. (See "Swede Deal Makes Cruzan Rum Stock Soar".)
When Cruzan ships its rum to Florida, only about one-third of it is bottled as Cruzan Rum at its parent company's bottling plant. Pickering said that in recent years between 500,000 and 600,000 cases are bottled and sold in the states. (The St. Croix plant bottles the rum sold locally.) Pickering said the company wants to raise that to 1 million cases a year.
The majority of the rum shipped to the states goes to independent rum companies in places like Maine, Oregon and Maryland. Pickering said it is always labeled Virgin Island rum, but it is given different names and sometimes mixed with different flavors.
Pickering said, "No matter what, we are going to continue to grow." However, he added that if the V.I. government were to join with Cruzan Rum in a marketing plan, it would be good for both parties. (See "Governor Orders Investigation of Rum Agreement".)
There has been no word yet on the investigation that Gov. Charles W. Turnbull ordered concerning the proposed agreement between Cruzan Rum and the V.I. government. At the time, Pickering said he welcomed the investigation so the public could be assured that everything was honest in the agreement and that it would benefit the Virgin Islands.
He said Wednesday, "This is not trickle-down economics. When we sell more rum, the V.I. government gets more money."
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