Wednesday, August 3, 2016

Rum Growth Expected to Drop Over Next Five Years

     This is not a good headline to see first thing in the morning.  What I am hoping is that people are going to be drinking more of the premium rums and less of the large production types.   I know that as I find the better premium and ultra-premium rums I am buying to sip, I tend to drink less volume and enjoying the quality spirits in smaller volumes more.   I feel that too much of the tampering and flavoring of the product, especially in the high volume expressions has taken its toll.  It is time to make the product a bit better overall.

     The latest joint research from just-drinks and The IWSR has predicted that the global rum market will decline over the next five years.   A new Just Drinks / IWSR Report has forecast a compound annual drop of 0.5% between 2016 and 2021, representing a decline of almost 3.7million cases, with rum's top three markets – India, the US and the Philippines – all expected to record falls. The predicted five-year dip follows a decline of 0.8% in 2015 to 141.8m nine-liter cases, with nine of the top 20 markets and four of the top five registering declines.   Between 2010 and 2015, the sector registered a compound annual growth rate of 0.6%.   The report notes that, while only two of rum's ten largest markets – Cuba and the Dominican Republic – are set to grow over the coming five years, the heaviest declines will be seen in high-volume, low-value markets.

     While overall category volumes are on the decline, the report notes that the super- and ultra-premium rum categories are "still expanding at a healthy rate". Nevertheless, in premiumization terms rum continues to under perform compared to rival spirits categories, such as Scotch whisky and Cognac, with the super- and ultra-premium price segments accounting for less than 0.5% of sales.