THE TRUTH BEHIND THE TRUTH OF

MALIBU RUM

By Dr. James Espey

Malibu-Original-BottleWherever I go, the 36-year-old brand is phenomenally successful, selling nearly 4 million cases annually and voted the No. 2 liqueur in the world. But Malibu, too, had a humble beginning and the tale is worth telling.

Fame has many fathers and there are many who claim to have been involved in the creation of Malibu. I remember well when in 1983 I was the Chairman of IDV UK Limited (one half of Diageo UK) and an enthusiastic Malibu brand manager from UK came to visit us. He gave me a lot of advice and direction as to how Malibu should be positioned among several other things about the brand.

I bit my tongue in exasperation because he was waxing eloquent about the brand without knowing its true origin. Today, there is a wonderful distillery in Barbados and if you ask any consumer where the brand originated, they will say the Caribbean without batting an eyelid.

Ironically, the brand was started by the three founders of The Last Drop Distillers Limited – Peter Fleck, Tom Jago and me.

The Truth Behind the Truth
In the ‘70s, I worked for Gilbeys South Africa as the Marketing Director of the company, a subsidiary of IDV and thus Grand
Metropolitan of London. We lived in an apartheid South Africa, with all the unfortunate and sad laws imposed by the then Nationalist Government, affecting the interaction and the relationship between the different races.

We were a tiny liquor company, compared to the two main juggernauts competing against us. We had to be flexible and agile and we did everything possible, as a liberal British company, to completely ignore government rules and regulations as we sought to employ the best possible team irrespective of race, creed or colour.

We were also a very entrepreneurial company, trying new ideas based on instinct rather than research. There is no test as good as a living test in the marketplace. We used to spend a fair amount of time traveling around the world looking at ideas that could be adapted to South Africa.

Peter Fleck, my good friend and colleague, joined Gilbeys South Africa in the early ‘70s, and when I was transferred to London in 1977 as the Group Marketing Director Worldwide, he replaced me, eventually becoming Managing Director of Gilbey SA.

Toward the end of ’78, I returned to South Africa on a business trip and Fleck showed me his newest brand: Coco Rico, a light coconut flavoured Caribbean style rum. It was in the distinctive Malibu bottle and I loved the crossed palms and the setting sun. In every respect it was from the Caribbean! I asked Fleck how he managed to have a white bottle produced, to which he replied, “The glass manufacturers could not produce it, so we  simply, in a very Heath Robinson fashion, created a conveyor belt with the bottles hung upside down and they were spray painted by a gentleman whose specialist job was to spray paint new fridges white.”  There is nothing like ingenuity!

I simply loved it and Fleck and I agreed that it had a world- level potential.

Birth Pangs
First and foremost, Coco Rico was produced in South Africa. Politically, South Africa was a pariah nation and Nelson Mandela was still in jail. On the other hand, who would ever believe that a rum produced in South Africa, looking as if it is from the Caribbean, could sell on the world stage, and lastly, an additional problem for me, as a new boy to London was to convince, if I may say, a rather “English” set of colleagues (remember, I am British not English) that this could be a world beater.

I sat down immediately with my good friend Jago, who was the Director of New Product Development Worldwide. First and foremost, the name Coco Rico was actually registered by National Distillers, so we decided to see what else we could find. Jago often tried and tested little ideas and never disposed of them, for he believed that one day they would reappear. He had a failed brand in his locker called Malibu, and immediately we loved the name, so we ensured we had clear registration in every country of the world. Then we appointed an advertising agency to work with us with shaping and positioning, which would say nothing about the background, but everything about the promise in the bottle. They came up with a brilliant slogan, “It comes from paradise and tastes like heaven.”  We then had to convince our skeptical colleagues that the brand was worthy of serious attention.

Securing Corners
Shortly after I moved to London, I established a New Product Council, which involved the top marketing people from all the different IDV subsidiaries meeting once a year to review all the various projects on the table. In 1979, we planned a major New Product Conference in the Bahamas. I then visited Professor Ted Levitt who, when I was a student, was my absolute guru. He wrote a marvelous article published many years ago called “Marketing Myopia.” It was first published in 1960 and is as relevant today as it was then.

I called upon Levitt in Boston and persuaded him, along with his wife, to have a holiday in the Bahamas and help us present the Malibu story to my skeptical colleagues. Levitt loved the idea and agreed to act as a catalyst. We paid him a small fee, he had a wonderful weekend and would you believe it, at the end of the weekend everyone thought let’s give it a go.

Litmus Test called UK
We launched the brand in the UK through the Peter Dominic stores, which we owned and through bars and nightclubs. It was trendy, it was cool, and it was different. In addition, we sold it at a price similar to brands, such as Smirnoff and Bacardi, but it was 25 percent alcohol in strength. This meant that we paid less duty and was thus more profitable and initially we called it a liqueur, which allowed us to advertise on television. In the ‘70s and ‘80s no spirits brands were ever advertised on television, but liqueurs were happily able to do so!! In no time Malibu took off and then we moved to sell it in different markets on the world stage. Of course, Duty Free was also an important springboard, which helped us with this process.

Global Resonance
Suffice to say, it rapidly grew to become a very popular international brand and some years later, when Diageo was formed, IDV sold it to Allied Distillers for around USD 1 billion. They had to dispose of the brand because they had acquired Captain Morgan and it was deemed as second serious rum, so in terms of the Monopolies Act, they had to sell off one of their rum type brands.

A few years on in more recent times, Pernod Ricard acquired Allied Distillers and thus they obtained Malibu, where it resides today. But it goes beyond that. It is now a total Caribbean brand. The original bottle said “Caribbean style rum.” Nothing has changed. It simply says “Caribbean Rum.”

Imprints Left By The Past
Fortune favours the bold and there is nothing like a living test market.

Marketing imagination is a great requirement. Courage, tenacity and the ability to try something, ignoring one’s negative colleagues is also a requisite. Luck, because of course one has to have luck. It was of course a great flavour and at the time people were happy to have something new.

Last but not least, I was fortunate to have the support of the Board of IDV and its Chief Executive, Sir Anthony Tennant (sadly now deceased). I was the Board champion, Jago, my partner, was the Head of New Product Development and Fleck, a key member of the New Product Council, who started with Coco Rico. In essence, the IDV team got together and made it happen.

I wonder whether the same process would apply today or would we be consumed with the inevitable hundreds of thousands of pounds spent on research rather than going out and trying a great idea.

About Dr. James Espey and The Last Drop

James Epsey

James Epsey

Dr. James Espey O.B.E. is a true veteran of the Liquor Industry, with over 46 years of experience.  Together with his long-time friends and partners, Tom Jago and Peter Fleck, he created and launched Baileys Irish Cream and Malibu, as well as The Classic Malts, Johnnie Walker Blue Label and Chivas Regal 18, amongst others.

last-dropSeven years ago, instead of retiring into the shadows, the trio created their own boutique spirits company, The Last Drop Distillers Limited – with the slogan “before there is no more.”

The Last Drop Distillers Ltd is the world’s most exclusive Spirits company.  The team consider themselves “rare spirits hunters,” seeking out hidden barrels of some of the oldest and most precious ‘last drops’  of whisky and cognac in existence.  Many are tasted, but very few are deemed eligible for the Last Drop… and all releases to date have been award-winners.

The current release is a 48-year-old blended whisky voted as the Scotch Whisky of The Year in the authoritative 2015 Whisky Bible. The recommended retail price is $4200 – and there are only 180 bottles in the USA.

The Last Drop team intend to bring out no more than three small unique releases each year; to be first in the know why not join their mailing list?  www.lastdropdistillers.com

THE TRUTH BEHIND THE TRUTH OF