Friday, November 22, 2019

Where Global Legacies Converge

By on February 15, 2019

Editor’s note: The following originally appeared in the Feb. 14 -20, 2019, issue of Caribbean Business.

Editor’s note: The following is the first in a series of profiles featuring industry leaders who are contributing to the greater good of Puerto Rico through a vision leading to concrete action.

Ahead is the story of a descendant of the Bacardí Rum empire, former CEO & President Joaquín Bacardí, who is bringing the tenets of a family legacy to a more than century-old brand called Ron del Barrilito. If he has his way, Joaquín will take this rum to the world stage by capitalizing on the brand’s reputation for a unique combination of natural ingredients and world-class craftsmanship.

When people work for the Bacardí family, they rise through the ranks laboring in various areas of the operation to learn what transforms a brand into a legacy. It is no different if your name just happens to be Joaquín Bacardí—yes, it helps secure a spot at the pinnacle of the company, but the road is steeped in hard work and sacrifice.

“I have been in the spirits industry for more than 30 years. Of course, backed by a family legacy—I am the fifth generation of Bacardís,” says Bacardí during an interview that took place in San Juan metropolitan-area restaurant. “And I am very proud of that, I have worked coming up through the ranks in several positions—all the way from marketing to president and CEO. With pride, I can tell you that I did my job well.”

Now, the former president is bringing the tenets of crafting rum for connoisseurs at Bacardí to another legacy product named Ron del Barrilito, which the former CEO intends to place on the top shelf in the global spirits industry. He is standard-bearer of a tradition that he took to heart. “Although it is a global brand, our family is very humble, and we never forgot our roots, and where we come from. Our family left Cuba by force—it wasn’t voluntary,” Bacardí reaffirmed with a nostalgic tin coloring the sound of his voice. “In leaving without anything, [my family] knows what it means to lose everything. A name doesn’t mean that you have more importance than another person. A name doesn’t mean anything—that there is a brand behind the name does have consequences. And what I think the family has done very well. And the reason we have not let go of that is because we lost everything. We had to leave with nothing and re-create ourselves and grow something that they all had faith would be successful.”

When the family left Cuba in 1959, they regrouped in Miami—Ron Bacardi already had plants in Cataño and one in Mexico. Even after losing everything in Cuba, the family was approached by a multinational company to sell the brand—for $200 million in 1959. “So, the family got together and said, ‘we have this offer on the table; we lost everything, but the answer is no, we will never sell our patrimonio,’” Joaquín recalls. “And they rejected the offer and regrouped and strategized to launch the brand again through other markets.”

Soon thereafter, the Bacardí family waged a legal battle with Fidel Castro, who had been exporting the rum to Europe. The Bacardí family confiscated one of those shipments. The Castro regime sued, the Bacardí family prevailed in the case, and the shipment was destroyed. “He realized that he had lost the rights to the brand. For us, that was a huge victory,” Joaquín recalled. “One, we were united; two, the brand is not for sale, the brand is ours. What made Bacardí successful was our sense of union and humility before all.”

To infinity and beyond

Now, Joaquín is bringing his Bacardí experience to the Barrilito initiative, making quick work of a master plan to take the world-class rum to the next level—the world stage. Markets in the five-star general’s sights are in Europe and Asia, where Caribbean and Central American rums already occupy top shelf.

With Bacardí at the helm of Edmundo B. Fernández Inc. as the company’s executive chairman of the board, he hit one out of the park with the launch of Barrilito Cinco Estrellas, a limited-edition offer made with rum that had been aged 35 years and blended under the watchful eye of Master Blender Luis Planas Navarro. The former Bacardí master blender worked together with Barrilito veteran Manuel Fernández, applying age-old tenets from what the new Edmundo B. Fernández chairman described with this: “In a nutshell, their expression of what rum is supposed to be is completely innovative, in the sense that no one else does what Barrilito does to create their formula. We are the only spirits company in the world to exclusively use rainwater and we import vanilla beans from Madagascar. Everything is natural; nothing is made from concentrate.”

With that passing of the baton, Bacardi says he is slowly transitioning to Barrilito’s global launch using the continental U.S. as a first step. “I purchased a very forward-thinking product established in 1873, and combined with our know-how, we can produce more volume,” Joaquín explained.

Fast and furious pace

“Right now, we don’t have inventory—what I produce enters my warehouse as finished product and goes out the door. We literally have a company that sits on zero inventory because demand is greater than the supply. Demand is triple the supply.”

When we visited Joaquín Bacardí at his new digs in Bayamón, he was in the process of remodeling the center where the owners of Barrilito used to manufacture alcoholado Santa Anna. We took the ranch and transformed it into a visitor’s center where people can go and learn about the Barrilito history—we are going to have two orientation centers, historians. Visitors will be able to select and bottle their own rums in bottles that will be sealed with wax and stamped with serial numbers.

“It is a brand and you have to respect it,” the rum manufacturer says of his deep respect for the complexity of the Barrilito elaboration process. “We are going step-by-step trying to grow the rum pie. We have competitors who have a perspective to try to increase the share of the pie that they can take—we believe we should be growing the size of the pie. Rum from Puerto Rico has the same quality as any cognac in the world.”

Publisher’s aside

He was asked by Caribbean Business Publisher Miguel Ferrer (MF): What do you see that the private sector is not doing that could be done to help create economic development in Puerto Rico?

JB: “For starters, Puerto Rico is very fragmented in its point of view. Many people tend to watch out for their own interests, instead of thinking of the common good. What is the common good?” Bacardí asked rhetorically. “Us as empresarios looking beyond our shores—we can’t only be thinking 100 by 35 [miles that define the size of island]. Rather than just thinking 100 by 35, we should be thinking about how we can have a global impact. There are many businesses that have blinded themselves from exporting. They don’t do it or don’t understand it.”

MF: Is it not that many of those empresarios have a world view that positions their products as substitutes for imported products; they are looking to compete with local and imported products, they are not looking at the global arena as a stage where they can compete with other products?

JB: “Exactly; there is a focus exclusively on this market and in so doing you have a very murky perspective on the limitless possibilities in the global market. So, you stay here and enter into a price war where we cheapen products and you limit the ability to grow. Why is it that Barrilito is a success? Because we have not focused on the $9.99 price war for rum. We have to think global. Puerto Rico has a rapidly shrinking population.”

Bacardí has two sons, engineers who graduated from prestigious engineering programs, MIT and Georgia Tech, and held well-paying jobs in the U.S. mainland. Thankfully, they both returned to the island to join their father in his current Barrilito endeavor. “I told them: Your future is in Puerto Rico; they were both born on the island. Get all the experience that you want outside of Puerto Rico—there are plenty of opportunities in Puerto Rico. I gave them the whole picture. This [Barrilito] is small now; it is going to be tough; you are going to start the way that I started—from the bottom up. Your future is in Puerto Rico. Learn from the past; don’t be scared—look to the future.”

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