BROWN SPIRITS: RUM
The future of rum could be dark and stormy
While the rum category in travel retail as a whole has suffered from reduced demand in recent years, the popularity of premium and dark rums appears to be growing, according to analysts, large suppliers and smaller brands. Charlotte Turner discovers how the rum sector plans to increase its share of voice in duty free in the coming years.
Above: There has been an increased demand for dark and premium rums - for sipping - in travel retail.
Right: Edrington believes that Brugal is perfectly positioned for new generations of rum consumers.
O
ver the last three years rum has struggled to keep pace with the likes of whisky and
gin and the total category witnessed a decline of 3.7% in 2018 year-on-year according to IWSR, which has also forecasted a decline of -0.6% CAGR from 2018 to 2023. However, it was surprising to
learn that premium-and-above rum in travel retail performed well with a +2.2% sales increase in 2018 (forecasted up +4.0% CAGR between 2018 and 2023). It was the ‘below premium’
segment which registered the greatest losses in 2018; a decline in sales of -4.8% in 2018 (and forecasted
“The Halewood travel retail growth story to date has been set mostly in the European market, but recently we have secured new listings and witnessed strong growth in South East Asia.”
Simon Roffe,
Managing Director Global Travel Retail
58 TRBUSINESS
down -1.5% CAGR 2018-2023). From IWSR’s Drinks Market
Analysis TRBusiness understands that white rum sales (overall in travel retail) also contracted in 2018, with dark, golden rums faring better for some companies. “Higher-end lines are
becoming more prominent in the rum category and should continue to increase their share of sales,” Sandra Newman, Travel Retail Research Director at IWSR Drinks Market Analysis tells TRBusiness.
Premium position “Volumes of standard- and-below variants have been declining and most of the growth in the next few years is expected to come from premium- and-above rums.” Bacardi Global Travel Retail (in-
depth interview with Vinay Golikeri appears on p61) is certainly prepared for this trend to continue. “It’s a great time for rum as
premiumisation is opening up the category to new audiences,” Vinay
Golikeri, Bacardi GTR Managing Director tells TRBusiness. Juan Gentile, Managing Director
Travel Retail Americas for Edrington also insists that Brugal is perfectly positioned for new generations of rum consumers. However, there are some markets which hold greater potential than others. “Our focus is on super-
premium rum and this segment has grown strongly in travel retail over the past five years (+10% 5Y CAGR). However, it has grown at a slower rate
than domestic markets, with a slowdown in 2018.” “The premiumisation trend
of the rum category in duty free is led by the Americas, followed by Europe. Both of these regions account for around 80% of the segment and are driving growth.”
Gentile says Brugal had a very
good year in key Americas and Europe local markets last year, recording ‘a very positive performance in duty free’, which was driven by its 1888 expression growing in high double- digits, albeit from a small base. “Our main priority for Brugal is
MARCH 2020
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