Marco Pierini
Marco Pierini, Rum Historian
As has happened several times in this long series of articles dedicated to the History of Cuban Rum, the time has come to devote some space to Big History. This time, we do so with the help of a classic work of Cuban historiography, Hugh Thomas “Cuba. A History” 1971.
“In early August 1933 Cuba presented a desolate and disconcerting picture; there were serious strikes in all service sections of Havana, with the railway workers out for the first time. Newspapers were also shutting down. The bars and the cafès were closed for the first time in history. Food was scarce. Most shops were shut, and there were few people on the streets. Everyone was asking when the American marines would land.”
The marines did not land and finally, in the night of 12-13 August the dictator, Gerardo Machado, flew to Nassau, with seven bags of gold. There followed a year of demonstrations, violent clashes, occupations of factories and plantations, the formation of soviets, student mobilization, popular revenge against Machado’s hated police, the collapse of public order, looting and violence.
Shifting political alliances and short-lived governments were formed, then, in 1934, a sort of counter-revolution brought back stability and democracy (well, more or less), but under the shadow of the new strongman, former sergeant Fulgencio Batista. It was the first Cuban revolution, almost forgotten today, yet a watershed in the history of the island. Before it, there had been three decades of political life dominated by the protagonists of the War of Independence, marked by political instability, low-intensity civil wars, and repeated U.S. military interventions. After it, a new phase began, with a generational shift and new political actors, and a relative stability; however, under the surface the same old problems continued to simmer and a new generation of political activists emerged, one that will lead to the revolution of 1959. “The Revolution of 1959 followed in the wake of that of 1933 as the Second World War followed the First, or the revolution in Russia in 1917 followed that in 1905. The middle class of Cuba received a warning, to which they paid little attention. Afterwards, it was much less easy to expect their radical sons to place faith in liberal solutions”.
The 1933 Revolution did little to reshape the structure of Cuba’s economy that carried on “Importing nearly everything it consumes, and exporting nearly everything it produces” as a sharp observer had already pointed out back in 1919. The island remained anchored to its old pattern, its fate still tied to sugar and with it Cuba’s structural fragility remained, a country perpetually swept along by shifts in global demand it had no power to influence. Yet, unlike in earlier times, governments now began trying to steady the ship. They sought international agreements to bring about a measure of order to the market and—much as was happening across the Western world in those same years—started passing laws and regulations meant to improve workers’ lives: the eight hour workday, the legalization of labor unions, tax reforms, and more.
The other major change was the end of immigration. As we know, since the beginning of the 1800s Cuba had been a magnet for immigrant workers from Spain and many other countries. In the 1930s, Cuban authorities enacted a series of laws and administrative measures that sharply curtailed foreign entry, closing the doors to new labor migration and in 1939 l’isola had 4.250.000 inhabitants. And perhaps it was only then (though I know I am venturing onto a minefield here) that a shared national identity took shape, I believe for the first time. (On this period and these themes recommend reading Leonardo Padura’s excellent book “Heretics”)
In those same violent and chaotic years, the Cuban rum industry continued to grow, and it was a steady, lasting growth. And perhaps Arechabala grew more than any other company, by diversifying its activities and investing in many different sectors: sugar refining, storage of sugar and molasses also for other companies, transportation, import and export of various goods, distillation, confectionery products, bottling, and more. Let us remember that since 1921 the company had become a corporation under the name of JASA, that is, José Arechabala Sociedad Anonima. JASA grew in an extraordinary way, going from 500 workers in 1928 to 900 in 1932 and 1.200 in 1935, becoming one of the largest companies in Cárdenas and increasingly identifying itself with the history and identity of the city.
And in those same years, the company launched a new rum label, Havana Club. “In 1934, the company released its Havana Club label, which was part of a larger growth strategy to expand into the U.S. market. Launched just after the repeal of U.S. Prohibition, the Havana Club label was designed to meet a growing demand for Cuban rum. As part of its strategy, the company’s Ron Añejo Arechabala 75 would be designated Cuba’s domestic brand, while Havana Club would represent the company in the U.S. markets. To facilitate its sale in the United States, its label featured an English rather than Spanish spelling (Havana rather than La Habana). (Christopher Chávez “Isle of Rum” 2024)
This is how it was recounted twenty years later in the book “José Arechabala S.A. en su 75 aniversario, 1878-1953” published by the company for the 75th anniversary of its foundation
“On March 19, 1934, after meticulous preparations and studies of market possibilities, a new industry was inaugurated: The Liquor Factory, which was solemnly blessed. And throughout the entire Republic a new product of supreme quality appeared: HAVANA CLUB ARECHABALA RUM. This activity now also includes cordials, cognac, and ‘Alcohol-Elite’—a formidable resource for the home, clinics, etc., due to its nature as pure alcohol—as well as other product lines.”
Here is how the birth of the new label is reconstructed in the aforementioned book by María Victoria Arechabala Fernández and Antonio Santamaría Carcía “Arechabala Azúca y Ron” 2023. The translation is mine, and, as always, I ask the Authors and the readers for their indulgence.
“As will be explained later, beginning in 1933 JASA equipped itself with machinery capable of distilling 4 million liters a year and added a new molasses plant. It strengthened its marketing, began selling Havana Club rum and other spirits, increased its fuel production, and opened an office in New York. …In 1934, it also opened a liquor factory, following through on a project dating back to the 1920s that aimed to create new rum brands. Some sources claim that as early as 1928 the company had already been aging the spirit—something essential for later commercialization, since rum requires time to mature. …Its exports went mainly to the United States, where they were well received. Some of the earliest shipments, labeled Havana Club and Doubloon Rum, were sent in casks on an experimental basis. By the time the plant was inaugurated, several thousand cases of both brands had already been shipped to New York and other American cities. …On April 10, 1935, the company became the holder of trademark number 99,789, a word mark under the name Havana Club, for which it had applied to Spain’s Industrial Property Registry and the General Trademark Registry in July and December of 1934, covering distilled products, spirits, and liqueurs.”
The choice of timing was no accident: “Prohibition was abolished on December 5, 1933, and the 1934 Reciprocity Treaty allowed Cuban rum to enter the United States. It’s no coincidence that JASA then decided to open its liquor factory, and that in its early days its demand depended largely on that of the neighboring country.”
In addition to production, JASA immediately devoted significant resources to the promotion of the new label. “Marketing strategies were common at JASA from the 1930s onward, especially in the promotion of new products. In May 1935, the company leased the former Palace of the Counts of Casa Bayona, located in the Plaza de la Catedral in Old Havana, in order to establish offices there, along with the Havana Club Private Bar. The bar was intended to introduce the company’s beverages to prominent figures in the city as well as to visitors from other parts of Cuba and abroad. From the moment it opened, numerous societies, companies, and associations used the venue for their events. Practically all foreign visitors passing through the island’s capital between 1935 and 1958—especially Americans—spent time at the establishment, and the local, national, and international press took note of it. This coverage helped publicize the brands of the Cárdenas based company, particularly its flagship rum.”
The Arechabala family’s lavish display made clear their rising self assurance and their refusal to be intimidated by the Bacardis that years earlier had hired architects Esteban Rodríguez Castells and Rafael Fernández Ruenes to create an Art Deco headquarters in central Havana—the impressive Edificio Bacardi, which in 1930 stood as the tallest structure in the city. So, for decades, both rum dynasties thrived side by side, expanding their operations and effectively sharing a duopoly of Cuban rum.
The promotional campaign for Havana Club did not stop there. The most important Cuban newspaper of the time, the Diario de la Marina, ran numerous photo features on Havana Club and other products of the company, which sponsored also many sporting events, a radio station, and the recently founded, but already renowned, Club de Cantineros. For its promotional campaign of 1935 and 1936 JASA rented a typical wooden house in Varadero, already a prestigious tourist destination at the time, called Cottage Havana Club.
Last but not least, demonstrating a mastery of the most advanced marketing strategies, “Starting in January 1935, Diario de la Marina and other newspapers and magazines published advertisements for Jasa’s flagship beverage. They also printed the recipe for a cocktail called the Havana Club Especial, which became very popular in Cuba. The recipe — often prepared by a well known bartender from the Arechabala bar named Antonio — contains a teaspoon of sugar, a small glass of Havana Club, lemon juice, three cherries in syrup, and finely crushed ice. The ingredients were shaken together and the mixture strained through a fine sieve. … Jasa also awarded prizes in a National Cocktail Competition, the first of its kind held in Cuba, which took place in the capital. The event was organized by the Bartenders’ Club and was reported in the pages of the main local and national newspapers.”
Only later, by the early 1940s, did Arechabala executives change their approach in the U.S. and rather than promoting Havana Club as a rum meant for cocktails, they began marketing it as a refined spirit meant to be enjoyed on its own.
In essence, the Arechabala firm pursued a path focused on building up its tangible assets and strengthening its distribution network. For a period, this approach proved effective. Little by little, Havana Club gained recognition across the United States and Europe, while in the city of Cárdenas, the family’s influence became deeply rooted. By the time the business reached its seventy fifth year, the Arechabala family had established themselves as central figures in shaping Cuba’s powerful rum industry.
Bacardi, on the other hand, followed a very different path: it diversified very little, focused primarily on rum and began a process of internationalizing its production, first in Barcelona, then in Puerto Rico and Mexico. We will get back to this.
Anyway, Havana Club soon established itself as one of the market leaders in Cuban rums, while the growth of Bacardi and Arechabala was a real storm for the smaller Cuban Rum Companies. Both companies continue to prosper and expand, in a virtual duopoly on Cuban rum exports to the US up until the Revolution in 1959.
As a matter of fact, when in 1950 a World Bank team visited the island, “Rum production in general was a bright spot in the Cuban economy. Don Facundo and his successors had not been the only businessmen to recognize the good sens of building an Enterprise around a raw material Cuba possessed in abundance, molasses, adding value through the application of technology and skilled labor. While the World Bank team had harsh criticism for the management of most Cuban industries, the island’s rum companies were a notable exception. ‘After detailed investigation’ the team reported, ‘the Mission is happy to report that it can suggest no improvement in production of Cuban rum.’” (Tom Gjelten “Bacardi and the long Fight for Cuba”)
Marco Pierini
