Premium rum: will it help turn the category around?

Sales of premium-plus rums may be growing fast with a high level of product development, but there is a lot of work to do.

Bacardi has long dominated the standard rum segment with the Bacardi Carta range. However, the family-owned drinks giant is now aiming to lead the emerging premium and super-premium end of the rum market. In recent years the company has been developing a core family of premium-plus rums.

Can premium rum take off in the US?

The comparative failure of the US to embrace premium-plus rums to the extent of other brown spirits continues to be an obstacle to the premiumisation of the category. Volume sales of premium and high-end premium rums performed poorly in 2017, growing just 0.4% and declining -6.7% respectively, according to the Distilled Spirits Council of the US (DISCUS). The super-premium category did better, rising 10.2% in volume terms, but at 546,000 cases, it still lags many other spirits categories.

Nonetheless, there are encouraging signs the US market is moving in the right direction. Larger drinks companies certainly are waking up to the potential of premium rum. For instance, in June, E&J Gallo Winery announced it was becoming the exclusive importer of Venezuelan luxury rum brand Diplomático. As part of the agreement, Gallo is importing three different Diplomático rum ranges: the Tradition Range, priced at $26.99 to $42.99 and including the flagship Reserva Exclusiva expression; the Distillery Collection, priced at $79.99; and the Prestige Range, priced from $129.99 to $269.99.

Sustainability a concern

The Kraken Black Spiced rum remains the best-selling premium spiced rum, moving over 162,000 cases last year and delivering impressive volume growth of nearly 24%. Owned by US-based Proximo Spirits and named after a legendary sea monster, the brand is involved in tackling the problems of single-use plastics. In the UK, one of the brand’s key export markets, it introduced branded black metal straws earlier in the year and in October launched a limited-edition Salvage bottle. One pound from every bottle sold will go to Surfers Against Sewage, a marine conversation charity that aims to protect oceans, beaches, wildlife and waves. The Kraken Rum Salvage bottle is available from Amazon at £35.90 and directly from The Kraken’s website.

The demand for premium-plus rums in the UK is growing.

Premium white rum shows potential

The white rum category remains the smallest of the premium-plus rum sub-sectors, totalling just 234,541 cases in 2017. Nonetheless, it was the fastest-growing subcategory at 19.1%. This impressive growth rate reflects bartenders’ increasing demand for higher-quality white rums that can be used in cocktails.

The demand for premium-plus rums in the UK is growing, however, and retailers are responding to the trend with high-end releases. For instance, in October this year, London department store Harvey Nichols announced the launch of two exclusive Plantation Jamaican rums supplied Cognac house Maison Ferrand.

Plantation Rum Extrême No.3 HJC and Extrême No.3 ITP were distilled in Jamaica’s historic Long Pond Distillery in 1996. The new rums, the third release in Plantation’s Extrême range, were aged for 21 years in ex-Bourbon barrels before being transferred to France to be matured for a further year in Ferrand Cognac casks. Priced at £195 per bottle, the rums are limited to 1,000 bottles each.

“We have been seeing incredible growth in our rum section over the last 12 months, with the category showing an annual growth of almost 19% in value, and around 10% in volume,” says Rob Graves, Harvey Nichols head of food and beverage buying. “This shows that there has been a major upsurge in not just our rum sales, but people moving up in terms of the quality of product that people are buying… The higher-end rums have a fantastic potential to grow. I believe that there will be strong growth for the next few years at least, with an increase roughly the same as we have seen this year.”

Innovation strong with dark rum

Dark rums accounted for more than 80% of the premium-plus rum category last year and recorded volume growth of over 7.5%. This important sector has seen a high degree of product development and innovation in 2018, with key trends including cask finishes, vintage releases, single country and distillery expressions. One brand exemplifying this new direction is Mezan rum, produced by UK-based Marussia Beverages. Mezan offers a range of unblended rums from individual Caribbean islands and Latin American countries.

The brand’s flagship expression is the permanently available Mezan Jamaica XO, while the vintage rums are renewed each year. “We launch between two and three vintages yearly. Jamaica XO has a RRP of €35, while the collection of vintages are between €55 and €70 depending on their age and provenance. We mainly target connoisseurs. Jamaica XO and the vintages are sipping rums, targeting both premium-and above rum and single malt whisky drinkers.”

‘Excitement’ is surely the word to describe the current mood surrounding premium-plus rums. While not quite showing the growth of premium gin, the category clearly has long potential, sharing many of the craft credentials of other brown spirits, but also appealing to the cocktail driven upscale on-trade.

Find out more about rum in the US in our US Beverage Alcohol Review, US craft rum in our US Craft Spirits Review and globally in the IWSR Global Database.

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