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Premium Rum Travel Retail: Navigating the Path to Growth

Published by
Maythe Monoche

Despite its rich heritage and diverse flavor profiles, rum has historically held a modest 7% share in the travel retail spirits market. However, recent trends indicate a shift, with premium rum travel retail experiencing a resurgence. Brands now focus on premiumization and unique customer experiences to elevate rum’s status among travelers.​

The Rise of Premium Rum in Travel Retail

The premium rum travel retail segment is witnessing notable growth. According to IWSR data, the premium-plus category (rums priced over $59.10 per liter) grew at a compound annual growth rate (CAGR) of 5% from 2018 to 2023, outpacing the overall rum category, which saw a 2% decline. Projections suggest that the super premium and above segment will continue this trajectory, with an expected CAGR of around 8% between 2024 and 2028.

Consumer Behavior: Trading Up in Travel Retail

Travelers are increasingly inclined to explore premium offerings in duty-free environments. Marco Cavagnera, Managing Director of Global Strategic Travel Retail at Campari Group, notes that the perception of duty-free shopping as a value-driven experience encourages consumers to trade up. Factors such as gifting opportunities, access to travel retail exclusives, and a vacation mindset contribute to this trend. Additionally, the premium-plus category predominantly comprises dark rums, with the US and Europe accounting for 86% of sales by value.

Brand Strategies: Elevating the Rum Experience

Brands are investing in immersive experiences to captivate travelers. Appleton Estate, for instance, unveiled a permanent boutique at Sangster International Airport in Montego Bay, offering interactive, high-tech experiences that narrate the brand’s story and showcase its premium expressions thespiritsbusiness.com. Similarly, Bacardi’s “Rum Tales” activations at Miami and Frankfurt airports aim to persuade travelers to explore higher-priced expressions, such as Santa Teresa 1796 and Facundo thespiritsbusiness.com.​

Challenges and Opportunities Ahead

While the premium rum travel retail segment shows promise, challenges persist. The category’s lack of a premium presence in regions like Asia Pacific and the limited variety in duty-free stores hinder its growth. However, the rise of Indian outbound international travel presents a significant opportunity. Indian consumers, traditionally inclined toward low-priced domestic rums, are now exploring premium options, with local craft brands gaining traction at key airports.

A Transformative Journey for Premium Rum Travel Retail

The premium rum travel retail segment is undergoing a transformative journey. Through strategic investments, immersive brand experiences, and a focus on premiumization, rum is poised to elevate its status in the global travel retail market. As consumer preferences evolve, the category’s growth trajectory appears promising, signaling a new era for premium rum in duty-free environments.​

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Source of information

The Spirits Business Article Slow going: rum eyes growth in travel retail, written by Tom Bruce-Gardyne

The image of the article is courtesy of © 89Stocker via Canva.com

Maythe Monoche

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