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| Rum's Future is Premium and Ultra-Premium Aged Rums |
2016 found the rum category in decline,
1.2% or 22.1 million nine-liter cases. This is
believed to be because of consumer interest shifting in the US to whiskey and
tequila. A decade ago the rum category added 2 million cases between
2006 and 2011. This was its highest
annual volume growth of all time. Unfortunately, the last five years have
brought on a reversing of that trend and the rum category has lost 0.9 million cases
between 2011 and 2016. This translates
to a -0.8% compound annual growth rate. The biggest losers are the
front running brands like Bacardi and Captain Morgan with a 57% share of
category volume are the biggest cause of this negative overall growth with a compound
annual growth rate of -3.4% and -0.7% respectively. If Bacardi and Captain
Morgan were taken out of the rum category figures, rum would have grown at 1.2%
compound annual growth rate between 2011 and 2016, which would translate last
year to an increase of 2.5% last year.
Smaller rum brands are thriving, this is
thought to be driven by the strong interest in Tiki cocktails as well as the
many classic rum cocktails that remain so popular in the bars and home
cocktailers. The mojito, daiquiri, Cuba-libre and other popular
tropical cocktails aren’t showing any signs of slowing down, which further
helps drive this cocktail demand. This growth as appeared mostly among
artisanal imports and domestic craft brands.
The biggest
issue for the rum category is seasonality.
People on vacation find themselves enjoying tropical drinks that seem to
be forgotten once they head home and the fall and winter set in. Florida followed by California lead the United
States for rum consumption. This is
believed to be thanks to their year-round summery climates and reputation as a year-round
vacation destination.
Both
Bacardi and Captain Morgan have had difficulty remaining the sales giants they
once were and caused category drag in the standard and value price quality
segments. The good news is that there is a big rum category,
consumer interest in premium and ultra-premium expressions. Rum
premiumization is growing rapidly and is seen to be the segment to be the area
where rum will see its biggest gains in the future. Premium and ultra-premium rum segments are small,
but drinkers are finding that high end rums are just as appealing and flavorful
like the other dark spirits and a lot of growth is coming in this area. The premium and ultra-premium
expressions have gained a 3.3% sales gain since 2011, reaching 9% of total
category sales volume. This is ahead of the global pace, which could
show well for the higher quality rum expressions in the United States in the
coming years.
