With recent brand acquisitions from major industry players, is rum finally fulfilling its potential? Rachel Badham reports
Only a few months into 2023, and the burgeoning rum category has already grabbed the attention of the industry, particularly after Philippines-based rum brand Don Papa was purchased by spirits giant Diageo in January.
In the same month, Brown-Forman finalised its acquisition of Diplomático rum in a move that chief executive Lawson Whiting said would help the organisation “meet the preferences of global spirits consumers”. And with last year’s Think Rum trade day questioning whether it is finally living up to the years of being dubbed “the next big thing” in spirits, it seems that rum is gaining the attention of the industry’s biggest players, as well as consumers.
But what do these major acquisitions mean for the growing category – and for retailers?
For Gemma Wakeham, chief marketing officer at British rum brand Two Drifters, these are positive developments that will see both consumers and the drinks industry pay more attention to the spirit.
“We have all heard about the imminent rum boom – it’s not here yet, but this shows that more people are wanting well-crafted, delicious rum from a brand with credibility and provenance.”
As well as giving rum a stamp of industry credibility, Wakeham hopes that recent acquisitions will support the “continued need for premiumisation in the rum category”. “I think [they] will encourage more talk about good rums and good brands rather than the lower end of the category and all the sugar and spice that it brings. The UK retail market will only benefit from more rum noise,” she adds.
Turning to the UK spirits retailing landscape, Tom Brady, spirits specialist at Oxford Wine Co, predicts big things for the rum category: “It’s always great to see investment in rum as this will no doubt lead to more visibility for the category as a whole.”
He also shares that the retailer saw a 28% increase in revenue from rum in December 2022 compared to the same month in 2021. Lauren Priestley, head of off-trade category development at Diageo, adds that improved visibility means “rum is now able to recruit new adult drinkers”, which will likely lead to a rise in sales.
However, Brady says that with major rum brands now in the hands of industry giants, maintaining authenticity, transparency and quality within the category is dependent on how these brands are managed, particularly in terms of their communication with consumers.
“My hope is that the messaging coming from the big brands begins to move away from the outdated white, gold and dark stereotype into a celebration of the distilleries themselves and the culture behind rum-producing nations.”
THE SPIRITS CYCLE
With the rum category seemingly thriving, it appears that the UK rum scene might be following in the footsteps of the 2010s gin boom as flavoured rums such as Dead Man’s Fingers and Rockstar become all the rage.
Chris Shead, off -trade channel director at Pernod Ricard UK, says the company has taken inspiration from flavoured rum’s popularity to expand the range of flavours in its Malibu rum-based coconut liqueur range.
“There is a momentum in retail with regards to the growing trend of flavoured rum. Flavoured rum’s growth has been very impressive in the past five years in IWSR – 12.3% yearly value growth on average when the rum category is growing 5%.”
Shead also notes the importance of flavoured rum options in enticing new consumers to the category. “The introduction of flavours to the Malibu range (Passion Fruit, Mango and Watermelon are already available in UK retail) has allowed us to recruit young adult shoppers into the brand and discover the potential of rum across more drinking occasions.”
Adding to Pernod Ricard’s portfolio, Malibu Strawberry was introduced at the beginning of 2023 as the brand continues to develop its flavoured offerings.
Despite rum’s current upward trajectory, having more options comes with the risk of over-saturating the market with inconsistent quality and messaging, which could eventually lead to stagnation and decline – an issue that is increasingly being observed in the gin category.
Speaking at Think Rum 2022, Dawn Davies MW, head buyer at The Whisky Exchange, warned that an excessive abundance of flavoured expressions could see the rum boom mirror the cycle seen in gin. So as rum continues its growth, it seems that producers and retailers alike should tread carefully to avoid category fatigue and keep consumers engaged.
For Pernod Ricard’s Shead, ensuring long term growth in the category means taking note of other trends in the off -trade and applying those to rum, such as the rise of RTDs and the consumer desire for convenience.
“The popularity of RTDs has accelerated as consumers seek out convenient on-the-go formats and our new Malibu Pineapple premix can is set to drive rum’s presence in impulse, ensuring further visibility in the ‘grab-and-go’ moment.”
And with major brands developing their offerings while smaller producers enter the fray, it seems that rum might finally be getting a promotion from the next big thing to a firm favourite among spirits drinkers.