The Growth of Online Distribution Networks in the Global Craft Rum Market

The newest report presented by Transparency Market Research showed a shift in the alcohol consumption trend that is boosting growth opportunities in the global craft rum market. Craft rum is gaining acceptance in culturally advanced societies because of its innovation in flavor, its more quality-oriented approach, and the use of more advanced distribution channels.

One of these channels is the online market. Online distribution is, in fact, the most attractive segment due to consumers’ preference for online shopping, especially after the impact of COVID-19. The wide variety of products, payment options, delivery options, and discount offers are increasing the attractiveness of this sector.

Without a doubt, technology is transforming the way consumers research, browse, and buy. Likewise, consumers consider online platforms a user-friendly resource to access information on products, such as their type, flavor, blends, manufacturing location, proofing, and content of alcohol, among others.

Online Segment Growth by Region

Transparency Market Research reported that in North America, the offline segment is expected to remain dominant in the next few years. This is mainly due to the rising number of local and international brand retail stores and their added value in customer service, such as “pick and collect” and “pick and drive.” However, the online platform offers free delivery and discounts for paying online, which is likely to make the market for online distribution channels in this region more attractive.

On the other hand, there has been an increase in the adoption of online shopping among consumers in South America. Online distribution channels have become more popular as more people have access to the internet and use e-commerce apps. Brazil dominates this sector in the region due to a solid customer base that consumes mass amounts of rum.

In Europe, the UK market has traditionally been strong for rum. The last five years have seen rapid growth in craft rums, which represent over 15% of the market and are overtaking other craft spirits. Still, Germany, France, the Netherlands, Spain, and Russia are the key countries for rum consumption.

The European market is influenced by the rise of craft rum bloggers and social media, backed by the various chef’s videos offered with the purchase of the products, leading to an increase in online sales. Changing consumer behavior and lifestyles, along with the reliability of online sales channels after the impact of the pandemic, have increased the demand for craft rum in this region.

The Middle East and Africa market is still growing due to lower adoption and insufficient innovations in the mass-market product range. However, South Africa is a key market in the region for the growth of the craft rum industry. Yet, the retailers and in-house craft spirit distribution channels of craft rum have triggered the market’s sales in the offline segment. International and local manufacturers have balanced positions in the craft rum market by maintaining a strong presence and brand recognition among consumers in the region. This is likely to drive sales of craft rum in the offline segment.

In Asia Pacific, India is expected to be the most prominent region for the craft rum market. Factors such as increased rum consumption; growing awareness about craft rum; the increasing number of hotels and bars; and the rise of micro-distilleries across the region could accelerate the demand for craft rums in the following decade. However, Australia, South East Asia, and the Philippines, among others, are driving sales for the market as a result of the growing demand for craft spirits.

In the region, manufacturers are focusing on e-commerce and internet retailing as it helps to lower the cost of products and reduce the rental costs of physical stores and the costs of staff that physical stores require.

The Influence of Digital Media

The change in the type of alcohol consumption is, in part, the result of the widespread advertisements, blogs, and reviews on social media platforms by spirit connoisseurs. In this sense, the influence of online bloggers, craft spirits specialists, chefs, and digital media has also increased the online sale of craft rum as compared to offline sales.

Consumers are more conscious of taste, blends, ingredients, rum processing, and brands or distillery houses. This is due to the influence of chefs, distillers, rum experts, and large old distilleries on the positive showcase of craft rum on digital media.

E-commerce or online stores are an area of opportunity for the global craft rum market. This is how there has been a surge in the adoption of e-commerce among consumers across the globe, which in turn has increased online retail sales. Yet, key suppliers of craft rum around the world are primarily targeting their commercial partners through traditional ways of networking, such as direct or indirect sales, which is likely to drive the growth of the craft rum market.