Friday, February 24, 2017

Rum is Bracing for Falling Volumes Ahead

     This is from a report that surfaced recently,  It looks like it is time for the rum sector to buckle down and work on it image and get some guidelines in place so the people purchasing rum truly know what they are buying and expect more rather than less from the sector.

     “The global rum market is set to face a tough future, according to joint research from just-drinks and The IWSR, with volumes expected to slide over the next five years.”  The Global Rum Insights report has forecast a compound annual drop of 0.5% between 2016 and 2021, representing a decline of almost 3.7m cases. The rum segment's top three markets - India, the US and the Philippines - are 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.

     Nine of the top 20 markets fell in 2015, including four out of the top five. Virtually all of those in growth are in low single digits.   Rum’s trajectory is one of gentle decline and not overly dynamic, at least when viewed from a top-line vantage point.  

     One of the biggest issues for rum lies in the fact that it’s basis is value-priced brands which only account for a further 39.1% of sales, meaning that almost 60% of total category sales are value or low-priced expressions.  This has implications for brand building, particularly premium brand building. In much of the world, rum has a relatively low image and is viewed as a commodity product rather that a product of quality.