Rum’s Mixed Performance in the US: Challenges and Opportunities

The rum category in the US has experienced underwhelming performance in recent years, hindered by limited premiumization and a lack of new brands. Data from IWSR’s US Navigator reveals a complex picture of the category’s challenges and potential opportunities.

Rum’s Market Growth Stalls

From January to August 2019, rum saw a modest 4% volume increase compared to the same period in 2020. Growth slowed further to 2% in 2021. While total spirits in the US performed better during this time, rum began to decline in 2022, with all subcategories posting volume drops.

Flavored rum, the largest subcategory representing 43% of the market, faced the steepest decline. Between January and July 2024, overall rum volumes fell by 5%, outpacing the 3% decline seen across the total spirits market.

Regional Shifts in Rum Consumption

Florida leads US rum sales, accounting for 15% of the category’s volumes in 2024, up from 12% in 2019. However, even Florida saw a 3% decline compared to rum’s peak in 2021. Other key markets like New York, California, and Texas also reported volume decreases, with California showing a 7% drop.

Several states, including New Jersey, Massachusetts, and Georgia, experienced sharper declines of 8%, further highlighting rum’s struggle to maintain market share.

Premiumization Trends: Dark Rum Takes the Lead

Premiumization within the rum category has shown promise, especially for dark rums. Between 2019 and 2024, premium-and-above variants of dark rum increased their market share from 11% to 17%. However, white and flavored rums remain confined to standard price tiers, with premium-and-above options capturing only 4% of the market.

In Florida, the standard price tier gained significant ground, rising from 15% market share in 2019 to 43% in 2024. Meanwhile, in New York, premium-and-above rums gained five percentage points to reach 12%, reflecting consumer interest in higher-quality products.

Barriers to Growth and Consumer Engagement

Marten Lodewijks, president of IWSR’s US division, pointed to a lack of standardization in rum production as a barrier to conveying quality distinctions within the category. He also noted that high-end rum remains more affordable than premium options in categories like whiskey and tequila, offering an opportunity for brands to appeal to cost-conscious consumers.

Adding to the challenge, rum has seen fewer new brands entering the market, resulting in lower consumer excitement. IWSR suggests that rum-based ready-to-drink (RTD) products could help rejuvenate interest in the category.

The Path Forward for Rum

Rum’s future in the US depends on its ability to innovate and premiumize. Dark rum offers a strong starting point for premiumization, while developing new brands and expanding into RTD offerings could help the category attract younger, adventurous consumers.

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Source of information

The Spirits Business’ Article: Rum sees ‘mixed’ performance in US

The image of the article is courtesy of © Florent Bertiaux via Canva.com