just-drinks, in association with The IWSR, presents this six-part review of the global rum category. In the final part, we look at the challenges facing the segment and the opportunities that innovation will offer in the months and years ahead.

Challenges

In theory, rum should have a winning mix: versatility and diversity, from cocktail-friendly white and golden rums to dark, aged, sipping rums for connoisseurs; and strong provenance, particularly with regard to the Caribbean lifestyle.

However, the category remains somewhat unbalanced, falling behind rivals such as Cognac and Scotch whisky in terms of its premium-and-above performance. The mainstream appeal of brands such as Bacardi can make it difficult to build a credible high-end image.

The common consumer cues of pirates, naval heritage and Caribbean islands have strong resonance at lower price levels, but clash somewhat with the sophistication of the luxury end of the market.

Rum's diversity can also engender confusion when it comes to production. Different countries have different rules in terms of age statements, the addition of sugar and minimum maturation periods, with little prospect of industry-wide regulation.

Mainstream brands – Bacardi is the prime example – may also struggle to chime with a younger, Millennial audience that is cynical about big brands and less responsive to traditional marketing and advertising.

Even spiced rum, which has been a hugely-successful sales vehicle and recruitment tool for the category in recent years, is showing signs of losing momentum in some markets, beset by competition from 'flavoured whisky' products such as Jack Daniel's Tennessee Honey and Sazerac's Fireball.



Rum is a diverse category that has many layers and is more complex than some other categories. The main challenge with the Millennial market is reaching a point where the knowledge of the category is better communicated and less complicated.

Peter Thornton, brand marketing manager, Cellar Trends (UK agent for Pusser's)




Innovations

Spiced rum continues to be a hive of activity and innovation, led by Captain Morgan Spiced, but with a number of fast-rising stars such as The Kraken, Sailor Jerry and Bacardi Oakheart. Growth is set to continue, despite fierce competition from other flavoured spirits.

Rum's diversity can lead to simple descriptors such as white, gold, amber, dark and spiced becoming vague and potentially confusing to consumers. At the premium level, Gruppo Campari is looking to address this with a more precise laddering of products in the Appleton Estate range.

While gin, whisky and vodka have all benefited from the rise of craft distilling, there has been less evidence of this happening with rum. However, innovations have come from the likes of Banks, the venture recently acquired by Bacardi, Berry Bros' Penny Blue XO and London-based The Duppy Share.

Product Key Views

  • Review

Spiced rum continues to be the main source of innovation and dynamism in the rum sphere, with a raft of brands including Captain Morgan Spiced, The Kraken and Bacardi Oakheart gaining volumes.

  • Insight

Increasingly, the competition for the growing number of spiced rum brands comes not just from each other, but also from other flavoured brown spirits products, particularly those based on Bourbon and other whiskies.

  • Forecast

Spiced rum is the only segment of the market poised to continue its recent momentum in the coming years, adding an extra 3.5m cases from a number of markets in the next few years.

  • Strategy

Brand owners keen to pursue a rum premiumisation strategy need to carve out a distinctive identity for their products, one that significantly distances them from rival high-end spirits categories such as Scotch whisky and Cognac.

For the just-drinks Rum Essentials content page, click here

All data has been sourced from just-drinks' joint report with The IWSR, Global Rum Insights.

Expert analysis

Global rum insights - market forecasts, product innovation and consumer trends

Global rum insights - market forecasts, product innovation and consumer trends

Global rum sales amounted to 141.8m nine-litre cases in 2015, a decline of 0.8% over 2014 levels, but not too far off the +0.6% compound annual growth rate (CAGR) seen between 2010 and 2015. On the pl...read more