Nielsen insight: Time to spice up your rum offer
In my household, it is a story of two halves. I, like many others, have enjoyed the variety the gin boom has offered lately, while my partner is a rum enthusiast, collecting, displaying and consuming different offerings from around the world.
It looks like rum could be the next spirit to experience a boom, and choice has already begun to widen in the off-trade, meaning rum connoisseurs and casual drinkers alike are in for a treat.
Rum has grown by £25 million over the past few years and is now worth £362 million in the off-trade, giving it a number five ranking in the chart of the most popular spirits categories, ahead of imported whiskey and behind liqueurs and specialities.
With rum poised for a resurgence, let’s take a look at the segments that are likely to drive growth so you can plan ahead. Flavoured and spiced rum is the standout segment and the one you should keep your eye on as it has grown £25.1 million (21%) over the past three years, contributing 84% of off-trade rum value growth.
This means it accounts for nearly 40% of overall rum sales, overtaking white rum, which has experienced annual declines, as the number one sector within the off-trade rum category.
The flavoured/spiced category is well established, but has only just seen real movement over the past couple of years. There are a few key drivers of this: it has benefited from the premiumisation trend; it now appears in more spirits baskets as an additional purchase to the regular alcohol purchases as shoppers look to experiment; and the repeat purchase is at an all-time high in the off-trade.
There are two key shopper demographics driving this surge: those aged 65-plus and the 35-44 age bracket. Both of these groups have significantly increased the amount they spend on flavoured/spiced rum, and are more likely to trade up to a more premium offering.
However, the two groups differ on the propensity for repeat purchase, with older households more likely to purchase again. These older households control just over a third of FMCG spend, and nearly 40% of overall spirits spend, and the amount they spend continues to increase each year. It is therefore crucial that you understand this shopper group and have the right offerings on shelf to appeal to them. An important factor here when it comes to capitalising on the rum trend is catering to these consumers with smaller pack sizes.
The gin boom has benefited from craft, heritage and provenance, and the rum category could benefit from a focus on these areas as well, in order to continue the growth momentum and to resonate with those shoppers who we know are eager to try something new that have been a large contributor to gin’s success.
Rum is definitely charting the course to a resurgence in the near future. If you haven’t already, it’s time to have a fresh look at your current rum offering and adapt it to cater for those key shopper groups. With summer fast approaching, this is the time to make sure that you’re in on the right side of the trend.