Bacardi family's rum empire, the health and fitness craze in the United States was not exactly the best of times.

But Eduardo Sardina, president and CEO of Bacardi-Martini USA, is optimistic that young adults will swing back to drinking spirits.

And with parent company Bacardi Ltd's acquisition of Dewars Scotch whisky and Bombay Sapphire gin bringing a breath of the Scottish Highlands to its tropical-flavoured portfolio, he predicts better years ahead. "In movies in the 1960s, people were always drinking and smoking. Then you didn't see it anymore,'' Sardina told Reuters in an interview.

"But Americans have the ability to go from one extreme to another. Now, steakhouses are popular again, cigars, Martini drinking,''' he said.

The liquor industry started declining in the early 1980s as Americans grew more health-conscious and working out replaced cocktails as a pastime.

"I think we hit bottom in 1996. Now, consumption is moving up again and 65 percent of that is white spirits -- rum, vodka, gin,'' he said, speaking in his office overlooking Miami's Biscayne Bay.

"The industry is pretty flat right now, but there (are) signs that we might see conservative growth. I don't think we can speak of miracles, but that's better than the percentage declines we were seeing.

"The cigar boom has been good for the liquor business,''' he added.

Bacardi launches a new $15 million advertising campaign next month targeting young professionals under the theme "Bacardi by night.'' "We know our consumers do something each day -- they work, they have responsibilities. But at night they let off steam,'' Sardina said.

The company is still owned by descendants of Don Facundo Bacardi Maso who founded it in Santiago, Cuba, in 1862.

With his secret rum recipe, it became the island's leaving rum and beer producer. After the Spanish-American War in 1898, Bacardi gave the world two new cocktails, the Cuba Libre and the Daiquiri.

But in the wake of Fidel Castro's 1959 revolution, the new government seized its assets. The family fled Cuba and built new facilities in the Bahamas, the United States and elsewhere. By the 1970s, Bacardi rum had become the largest-selling spirit brand in the world.

In 1993, it bought Martini & Rossi, makers of the best-selling vermouth.

Worldwide rum sales are about 20 million case annually and Bacardi now has close to 60 percent of the rum market in the United States, its closest domestic competitor being Captain Morgan of Puerto Rico.

"We had a pretty good year last year with growth of 3 percent,'' Sardina said.

The company sold 6.8 million cases of rum in the United States last year, including 615,000 cases of Bacardi Limon, a citrus-flavoured rum introduced three years ago.

"This year we should do 7 million cases, which is pretty healthy. We would be happy with 1 percent growth,'' Sardina said.

The competition, however, is not just against other rums but other white spirits. Vodka's always popular, while in California, for example, tequila is a favourite.

This week Hamilton, Bermuda-based Bacardi Ltd. should close the deal to pick up Dewar's Scotch Whisky and Bombay Sapphire Gin from Diageo Plc for about $1.84 billion, he said.

When the purchase was first announced in March, Bacardi Ltd. Chief Executive George Reid indicated the company would be looking at other acquisitions, possibly in tequila and vodka.

The Dewars and Sapphire marketing operations will be handled out of Miami.

"It's going to be wonderful,'' Sardina said. Not that he wants Americans to go on a mass bender. `We feel comfortable with moderation,'' he said.

HIGH SPIRITS -- Bacardi's George Reid