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Rum At The Top?

“standfirst”>With its Ricky Martin appeal, rum is being touted as the next big thing. It’s even following the successful vodka route, stressing its versatility and launching super-premium and flavoured extensions, says Robyn Lewis

It is indeed a rum situation that we are seeing in the global spirits market at the moment. For in a sector dominated by the success of white spirits – vodka in particular, which appears to have cornered the market in fashionable, contemporary, versatile and increasingly expensive drinks – there is only one pretender to the crown. And against all expectations it isn’t white. It isn’t even particularly fashionable yet and has thus far enjoyed something of a cheap image in many global markets. Yet despite all this rum (for that is our contender) is looking hot.

Across the market the category is on the rise with all sectors seeing volume growth, apart from Eastern Europe which offset the volume decline with a rise in prices in key markets such as Romania and a fall in local production in other markets such as Bulgaria. The Euromonitor International report, The World Market for Spirits and FABS, from which these figures were obtained, emphasises rum’s ongoing potential globally.

“The category is well suited to the contemporary drinks market,” the report states. “The white rum sub-sector exhibited the strongest growth, as its light flavour made it particularly suited to use in cocktails and long drinks … however dark rum also showed growth between 1999 and 2004, underpinned by its own, more limited versatility and the consumer’s search for new flavours.” The report went on to point out the increasing attraction that the category holds for major manufacturers “who have all,” the report claims, “sharpened their focus on core international brands.”

Livin’ La Vida Loca

Certainly the rise and rise of Latin culture, with celebrities such as Enrique Iglesias, Ricky Martin and, of course, the ubiquitous J-Lo becoming household names in countries worldwide, has brought the Latino spirit increasingly into the mainstream. This should increase the attraction of a product that can trade heavily on this heritage. Even the most multi-national brand of them all, Bacardi, ran a very successful Welcome to the Latin Quarter advertising campaign, concentrating on its Latino birthright. Should this trend continue to move into more mainstream culture there would be no reason why rum could not copy the strategy of Cognac producers with Hip Hop by piggybacking onto the trend. Given that there are more global brands in rum than Cognac and that rum has 53 far less of a male-oriented image, there is no reason why the category could not do even better than Cognac with such an approach.

Above and beyond this, however, it is suggested that it is the product’s mixability, which is giving it the edge in the spirits market. Just like vodka, rum is proving its worth in the established cocktail culture in Europe and the US and it isn’t just white rum that is capitalising on the trend. With its Cuban heritage Pernod Ricard’s golden rum brand, Havana Club, is enjoying some serious success in this sector.

“In countries where the cocktail trend is very strong, Germany or the UK for example, cocktail bars are offering a huge variety of choice, both traditional and contemporary,” says Timothée Croizat, international product manager at Havana Club International. “Rum’s reputation for mixing isn’t new, so naturally the development of cocktails has benefited the rum market. For Havana Club in particular, it is a great fit. The brand comes from a country which established its fame in cocktail making a long time ago and where a lot of classic cocktails were invented – the Mojito, the Daiquiri, the Cuba Libra, for example. Havana Club, through all the products in the range, embodies the renaissance of Havana’s fame for cocktail making, enhanced by promotions like our International Cocktail Grand Prix.”

The Euromonitor report, in fact, notes that rum has been driven by several of the same factors that fuelled the expansion of vodka in global markets. Aside from its versatility, which has allowed it to profit from the cocktail boom (like vodka), rum has, again like vodka, lent itself to the development of flavoured brand extensions that have done well in some markets. Bacardi, in particular, has been active in this area, bringing out raspberryflavoured Bacardi Razz, chocolate-flavoured Bacardi Coco and Bacardi Vanilla, seeking, presumably, to attract those younger consumers who demand new tastes.

It has also followed vodka down the premium route, via aged rums, which have already captured growing interest in several markets.

 “Rum has so far been seen as a simple category in the minds of consumers but it is rich in variety, complexity, heritage and authenticity, not to mention the levels of ageing,” explains Fehmi Ozkan, senior VP, Global Rums, Diageo. “This is just being discovered and promoted across several developed rum markets in Europe. Several premium and super-premium rum brands have been successful in markets like Spain and Italy (such as Ron Añejo Dos Maderas) and the US (Appleton 21 Year Old has been a particular success story here, despite the £50+ price tag). We are likely to see other brands developed in the near future in these and other markets as consumers start to discover the complexity of rums,” he continues.

Down On the Street

So what does the future hold for rum then? It certainly looks positive at street level but do the analysts’ forecasts bear this out? According to Euromonitor, they certainly do, with world volumes set to reach 120 billion litres by 2009, 24bn litres of that in the US, 22bn in Latin America and 12bn in Western Europe. And then there are the emerging markets in the East. “Japan is slowly awakening to quality rum,” confirms John Barrett of Bristol Spirits, whose portfolio includes Ron Paraiso and Very Old Jamaica Rum. “However, it is still a small percentage of spirits consumption there, and other markets, such as Korea, have not yet even seen the light.” Other markets like Thailand and India are also likely to provide growth, with the growing population between 20 and 49 years old with rising disposable income providing particularly fertile feeding ground in India.

It does look as though, at last, vodka is being given a run for its money in the global spirits stakes and not by any of the expected contenders either – not gin or even white rum, but golden and dark aged rums. A rum situation indeed.


There is some polarisation in the rum sector epitomised perhaps by the differing strategies adopted by Dominican producer Brugal and the Indian UB Group. Brugal has adopted a strong international focus, having achieved a dominant position in its domestic market and this has paid off. Europe currently represents some 40% of the company’s exports, with the US responsible for another 30%. The strategy has seen Brugal’s share in global volumes increase steadily from 2001 to 2003.

On the other hand, the UB Group has achieved success over the same period by expanding its domestic market. The group was among the few manufacturers whose marketing activity spurred the growth seen in the Indian rum market during this period.

It remains to be seen whether the category will become more internationally focused on big brands or whether, unusually, rum’s heritage as a locally produced spirit will bring success to smaller producers.

According to John Barrett of Bristol Spirits, “While brands are vital to push the basic message to consumers – and Bacardi has done much over the years to raise the profile in consumer’s minds – smaller producers all benefit in the slipstream while enjoying individual points of difference.”

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