Market Watch Report: Rum, a spirit that promises

The 2023 edition of the Market Watch Report delved into the most prominent insights regarding the rum industry and its evolution in the United States market.

Amidst fluctuations and uncertainties, the rum industry envisions a future of steady yet exploratory growth, as reflected in the diverse perspectives of experts from brands like Bacardí, Planteray, Santa Teresa, and business owners who witness firsthand the evolving consumer consumption patterns day in and day out.

In this brief exploration, we will delve into rum’s current state and future projections, along with the stories it is poised to unfold on American soil.

2023, a year of Peaks and Valleys

In 2023, Rum faced another challenging year: The overall sales-slipping 4.5% to 21.38 million 9-liter cases, marking the first time since 2005 in which the category sold fewer than 22 million cases, and its tenth decline in the past 12 years.

“Rum has been touted for a decade as a category primed for a breakout, but it’s still niche,” says Terrence Tompkins, COO of Downtown Spirits and Esquin Wine & Spirits establishments. 

At Joe’s Beverage Warehouse (Chicago), Bourbon, and Tequila made up 22.8% and 19.1% of sales, respectively, in contrast to Rum sales which represented 2%, according to Ammar Sheikah, Joe’s Beverage Warehouse owner.

However, the general view shows the bright side of the industry!

Tompkins says that it’s important to point out that while sales aren’t massive, rum is a complex and fascinating category, and that stocking a robust selection of rum is important to any spirits department.

On the other hand, Sheikah does note some traction in the $30-$35 range per 750-ml.

“Planteray, Bumbu, and Appleton Estate do solid numbers for me at those prices. But anything over $40 becomes less of a player in terms of volume sales.”, he says. 

About the way to the top, the bestselling brands, and their market vision

Bacardí

Bacardí led Impact Databank’s top-15 bestselling rum brands chart, followed by Captain Morgan, Malibu, and Admiral Nelson.

Although Bacardí suffered a fall 2.7% to 6.45 million cases last year, according to the report, the brand continues to innovate. 

An example of this approach was the release of Reserva Ocho Sevillan Orange Carks Finish, the third installment of its limited-edition Cask Series, launched in 2021. 

Flor de Caña

Furthermore, the recognized brand Flor de Caña, the 13th place on the chart, has an optimistic projection of its sales.

“Looking to the future, we have ambitious goals for our 12-year-plus portfolio for 2024 and beyond, with targets of 50% growth. (…) The growing consumer preference for dark spirits is helping super premium rum’s reputation as a sipping spirit”, says Marc Hirten, president of Luxury Spirits International (Flor de Caña’s Importing Company).

Planteray

Planteray became the 14th bestselling rum brand in the top, a testament to the company’s sustained 20% growth since 2021, according to Guillaume Lamy, managing director for importer Maison Ferrand USA.

“We think the brand is truly beginning to bloom in these markets and consumers are embracing the diversity and premium quality offered up and down our range. We plan to be back to a minimum of 20% growth at the end of 2024”, says Guillaume.

The Kraken

Meanwhile, Lander Otegui, senior vice president of marketing for Proximo Spirits (owner of The Kraken), explains that to date, rum is one of the few categories to resist wide-scale premiumization, but that appears to be changing.

The Kraken is another brand that has been making its exciting moves.

Early last year, the brand launched The Kraken Gold Spiced and in its first year on the market grew to become the sixth-largest Gold Spiced rum, while The Kraken Black Spiced rum leads the dark rum category with over 40% share.

Beyond the chart, other premium brands like Bumbu, Ron Zacapa, Diplomático, and Pusser’s have experienced steady growth for years. A fact that is paving the way for $25-plus rum brands.

The Three Keys of Optimism

Due to retail insights or the brand’s market sensibility, listening to what people ask for is key if rum brands want to succeed.

So, here are the main points that rum companies must focus on to make that brilliant future happen!

Taking care of the environment

The world is looking for enterprises and brands that do care about the planet. Small brands like Copalli (a brand since late 2018)  are making efforts to bring the best to the market, being aware of its production impact on Earth.

“People appreciate and support brands that have a clear and authentic sustainability message, which in our case is a commitment to preserving the rainforest of Southern Belize where Copalli is produced and bottled, points out Scott Shaw, chief commercial officer for Copalli rum.

Fusion and innovation in tasting

Santa Teresa, for example, is working on exciting new projects that expand their flavor profiles, and their Sevillian Orange rum is a perfect example of catering to trends like incorporating rum into new takes on classic cocktails.

This focus on experimentation extends beyond the bottle, with experts predicting a rise in premium rums finished in unique casks, like those used for bourbon or cognac. This push for new flavor experiences excites both rum enthusiasts and adventurous bartenders.

“May we see these finishes done in barrels that the major companies have in their portfolios, as we see with Bourbon and Tequila: Maybe top-shelf expression of Admiral Nelson finished in an Old Fitzgerald barrel, or maybe a Bacardi rum finished in a D’Ussé VSOP Cognac cask?”, imagines Ammar Sheikah, Joe’s Beverage Warehouse owner.

Storytelling and education

Where there is a story, there is empathy. So if a rum brand wants to stand out must tell what makes it unique, and in that way get people a little closer to the category.

In the report, Alex Fellows, Diplomático’s senior brand manager, points out that he perceives there’s substantial room for further growth, as consumers become more educated about the category.

“Those who have taken the rum plunge are enamored with the spirit. I would expect a slow and steady expansion, but nothing meteoric.”

Terrence Tompkins, COO of Downtown Spirits and Esquin Wine & Spirits.

Despite the barrier to entry for new consumers, the Rum industry has abundant growing potential if brands decide to broaden their vision by telling their stories, educating consumers, and connecting with other spirit categories to collaborate through innovative, strategies.