Though total rum sales slipped 1% in 2018 to 22.8 million 9-liter cases, according to Impact Databank, there’s no lack of excitement about the category. “Rum is one of our slowest sellers right now, but it seems like it’s gearing up,” says Tasha Zonski-Armijo, general manager at Jubilation Wine & Spirits in Albuquerque, New Mexico. “A lot of new eclectic brands are reenergizing the category.”

Joe Selby, purchasing director and principal at the Boston-area retailer Kappy’s Fine Wine & Spirits, is also sanguine about rum’s future. “Rum sales have been relatively flat for the past five years or so, but profitability has grown slightly due to increased sales of higher-end and higher-margin items,” he says. “I foresee category sales growing modestly over the next few years as premiumization continues. Flavored rum sales will likely decline in the way flavored vodkas did, but that will be more than offset by increased sales of more premium products.”

Like many other spirits categories, rum is seeing a flurry of activity at the premium and super-premium tier. “It’s no secret that some of the long-tenured rum players are struggling,” notes Sean Yelle, category director of dark spirits for Campari America, which owns the Appleton Estate and Wray & Nephew rum brands. “What encourages us is the shift toward drinking less, but better. Consumers are reaching for a 12-year-old rum to enjoy neat or in a cocktail rather than defaulting to a Rum and Coke.”

Yelle adds that there’s still a long way to go in helping consumers navigate the higher-end rum segment. “Jamaican rum standards and taste profile differ greatly from Barbados rums, for example, but they’re both great options for consumers,” he says. “It’s a brand’s responsibility to help consumers understand the differences among rums that are $30 and up.”

Indeed, focusing efforts on the upper end of the category appears to be the key to success. “We need to show consumers that rum can compete with the likes of whiskies and Cognac,” says Edouard Beaslay, director of global marketing for Venezuelan rum brand Diplomático. “With the growth of super-premium aged rum, you can see that people are starting to realize that it’s a noble product and an interesting spirit to explore.”

Top Tier Triumphs

At Jubilation, Zonski-Armijo notes that while the store’s rum selection hasn’t grown in recent years, it has become more refined. “We’ve been a little more selective about what we add to our rum assortment—we’re going for higher-quality brands as a way to bring validity and interest to the category,” she explains. “It seems to be working—one of our biggest sellers is the Ron Zacapa 23 Solera ($51 a 750-ml.), which is definitely not inexpensive, but consumers are gravitating toward something like that.” She notes that another rum that does well is Panamá-Pacific 23-year-old ($61).

Zonski-Armijo adds that her rum consumers, who are mainly millennials, are looking for something out of the ordinary. “They have a ‘been there, done that’ feeling toward established brands, so there’s a greater appreciation for the more exotic labels,” she says, pointing to the Kirk & Sweeney 12-year-old ($37 a 750-ml.) and Pusser’s Gunpowder Proof ($39) as examples. According to Impact Databank, Kirk & Sweeney depleted 23,397 cases in 2018, up from 17,285 in 2017, while Pusser’s grew from 35,000 cases sold in 2017 to 37,000 cases in 2018.

Across spirit categories, today’s consumers don’t shy away from spending $15-$25 on a premium spirit, or even $25 and up for a super-premium label. At Calvert Woodley Wines & Spirits in Washington, D.C., owner Ed Sands says that the pricing sweet spot for rum is $19-$30. Bacardi, Captain Morgan, and Mount Gay sell best, but he’s seeing more interest in different countries of origin and higher-priced brands, which is helping to increase sales, albeit at a slower pace than other spirits.

At Kappy’s, Selby says the sweet spot is at around $15—with Bacardi, Captain Morgan, Malibu, and Sailor Jerry leading the pack—though the store also sees success in the $25-$30 range. “We do very well with traditional brands like Zaya, Barbancourt, Diplomático, and Plantation; new arrivals like Grander; and local brands such as Privateer, Old Ipswich, Deacon Giles, and the Black Dog,” he says. “More expensive aged rums appeal mostly to two demographics: a small but not insignificant group of die-hard rum aficionados, and a younger group of drinkers who like to try different and newer brands in the $25-and-up price point.” Selby also notes increased interest in different types of cask aging—like Bourbon and Sherry—and high-proof expressions, including Wray & Nephew White Overproof and Privateer Navy Yard.

“Super-premium is where the action is happening,” says Beaslay of Diplomático. According to Impact Databank, the super-premium rum segment grew 57% over the last five years, and 11.5% in 2018. “With our flagship Reserva Exclusiva ($40 a 750-ml.), we’ve outgrown the category quite significantly over the last five years,” he adds. Last July, E. & J. Gallo agreed to become Diplomático’s new U.S. importer, which will help increase the brand’s footprint nationwide and strengthen its presence in key states. In 2018, Diplomático—which depleted 38,000 cases last year, up from 35,500 in 2017, according to Impact Databank—released the first two expressions of its Distillery Collection (all $79), including Single Batch Kettle and Single Barbet Column, and will release the third, a pot still rum, this year. The brand is also releasing a 2005 single vintage expression ($120) later this year.

“Aged rum for sipping is definitely growing on the consumer end, and price points are increasing,” says Guillaume Lamy, vice president of the Americas for Maison Ferrand, owner of Plantation rum. “Above $60 a bottle is still a stretch for rum, but I’m hoping that with more education and quality coming to the market, we’ll be able to break that ceiling.” Plantation has more than doubled its case depletions since 2016, selling 78,000 cases in 2018. “We expect Plantation rum to pass the 100,000-case mark in 2019 on at least 25% growth,” Lamy says, adding that the brand’s Original Dark ($20 a 750-ml.) and 3 Stars ($20) expressions are driving momentum. Plantation has put more work into distribution of its specialty rums as well, including XO 20th Anniversary ($50), Peru 2004 Vintage ($46), Jamaica 2005 Vintage ($46), Trinidad 2005 Vintage ($46), Barbados 2005 Vintage ($46), and Fiji 2009 Vintage ($46). In late 2018, the company released Xaymaca, a Jamaican rum priced at $25.

Competition Spurs Innovation

There’s no question that rum’s biggest names are feeling the pressure from newer super-premium entrants. The No.-1 rum brand in the U.S., Bacardi, slipped 1.5% in 2018 to 6.58 million cases, following several years of losses. But the brand is determined to keep up with consumer demand for top-tier products. To that end, it launched a new line of premium rums last year, including Añejo Cuatro ($20 a 750-ml.), Reserva Ocho ($30), Gran Reserva Diez ($40), and Gran Reserva Limitada ($100).

“We’ve nearly doubled our market share of the premium rum segment as a result of this launch,” says Roberto Ramirez Laverde, vice president of Bacardi North America. “Premium rum is only 15% of the category, whereas the premium tier has a much greater share in other categories—53% in Tequila and 43% in whiskies. We see potential for over $550 million in additional sales if we capture an additional 25% of the premium segment.”

Last October, Campari’s Appleton Estate launched a 30-year-old expression ($495 a 750-ml.), which Yelle says is part of an “overall strategy in helping consumers re-evaluate the belief that rum is low-brow and just for poolside drinks, when it realistically can be a prestige liquid comparable to aged single malts, Bourbons, and Japanese whiskies.” In 2018, Appleton Estate was one of only five rums in the top 15 brands to post gains, up 2% to 225,000 cases.

Dorothée Hériard Dubreuil, director of brand marketing for Rémy Cointreau-owned Mount Gay, notes that consumers are forcing the rum category to evolve as they seek more complex spirits for sipping and making elevated cocktails. “There are a large number of new entrants to the market catering to a client that has a willingness to explore and trade up,” she says. “With this move toward more premium products, we’re seeing a blurring of lines, with rums releasing new casks and finishes one might associate with whiskies.” Last October, Mount Gay introduced the first edition of its Master Blender collection, Mount Gay XO: The Peat Smoke Expression ($250 a 750-ml.), which is a blend of rums aged between 8 and 15 years and finished in peated Islay Scotch whisky casks. 

William Grant & Sons’ Sailor Jerry spiced rum brand ($15 a 750-ml.) slipped 1.6% in 2018 to 713,000 cases, following several years of yo-yo-ing sales. “I’ve worked in the rum category for 18 years and I’ve never seen it as competitive as it’s been recently,” says Josh Hayes, senior brand manager for Sailor Jerry. Meanwhile, William Grant portfoliomate Flor de Caña is faring better. “It’s exceeding expectations, outperforming the category in nearly every metric,” says Will Orsburn, senior brand manager for Flor de Caña, noting that the focus over the last two years has been on building awareness of the brand’s 12-year-old ($40), 18-year-old ($50), and 25-year-old ($145) expressions. “Later this year we’ll introduce an exclusive, limited-edition rum that will appeal to those looking for the ultimate Flor de Caña expression,” Orsburn adds.

As Diageo’s super-premium Ron Zacapa continues to make waves—the brand depleted 41,000 cases in 2018, up from 39,996 in 2017—the company’s Captain Morgan brand is doubling down on what it does best, including launching new flavors such as Apple Smash ($15 a 750-ml.), which was released in October 2018. “Captain Morgan has been a mainstay in popular culture for decades and there’s a certain passion that people have for it,” says Linda Bethea, vice president of the brand. The No.-2 rum in the U.S., Captain Morgan fell 2% to 5.68 million cases in 2018. “In addition to focusing on maintaining quality standards, working to connect the brand with fun moments and inserting it into relevant cultural happenings is necessary for growing market share,” Bethea adds.

Industry Influencers

There’s perhaps no group more influential in the spirits industry today than bartenders and mixologists—if a brand can win them over, it’s sure to be reflected in its sales. “Today’s bar professionals are picky about the spirits they mix with,” Maison Ferrand’s Lamy says. “This attention to quality in cocktails has affected rum tremendously and trickled down to consumers and store sales.”

As the name suggests, Caña Rum Bar in Los Angeles focuses on rum, offering more than 400 different varieties, as well as numerous rum-based cocktails. “We all truly enjoy working with rum because it’s such an underrated spirit that’s slowly but surely building up its reputation,” says general manager Erbin Garcia. “There’s so much rich history behind the spirit, and it’s created a passion in us to prove disbelievers wrong and make them rum lovers.” Mount Gay, Plantation, Diplomático, Brugal, and Flor de Caña are top-selling brands at the bar, and the most popular drinks tend toward classics like The Mojito ($12), featuring Plantation 3 Stars, fresh lime juice, raw sugar syrup, muddled mint, and soda water, and the Rum Old Fashioned ($12), comprising Plantation 5-year-old, raw sugar syrup, and Angostura bitters.

“Advocacy in the mixology community is always a big focus for us,” Bacardi’s Laverde says. “Bartenders are the gatekeepers of our industry and many consumers look to them for recommendations, so it’s our job to make sure they’re well-acquainted with our products and can help consumers navigate the different options and drinking opportunities.” In 2015, Bacardi acquired Banks rum, which was created in 2008 as a brand specifically for bartenders. Acclaimed mixologist Jim Meehan is a co-founder of Banks, which specializes in super-premium blends sourced from locations such as Trinidad, Jamaica, Guyana, Barbados, Guatemala, Panama, and Java. The primary range includes Banks 5 Island rum ($30 a 750-ml.), which features 21 rums from six distilleries, and Banks 7 Golden Age Blend ($37), made with 23 rums from eight distilleries. 

“The cocktail resurgence has clearly boosted the whisk(e)y category, and we’re starting to see that interest shift to aged rums,” Campari’s Yelle says. “The complexity and approachability of aged rum is starting to heat up in this space and we expect it to explode over the next few years.” He adds that the resurgence of tiki cocktails has been a major boon to rum.

Dylan Seo, lead bartender at The Sixth in Chicago, agrees. “While there are many possibilities for rum cocktails, the main trend is tiki—an islander style that brings to mind sinking toes in the sand, waves rhythmically crashing the shore, and magic in the air,” he says. On the Sixth’s latest spring menu, the Dr. Zaius’ Rx ($12) has a definite tiki flair, blending Gustoso Aguardiente Blanco rum, St. Elizabeth allspice dram, Hiram Walker White Crème de Cacao, Cherry Heering and Fernet-Vallet liqueurs, house-made avocado orgeat syrup, fresh lime juice, Bittermens ’Elemakule Tiki bitters, and a house-made blend of coconut cream and roasted plantains and banana.

“There’s some serious dedication out there today to creating brilliant tiki cocktails,” Yelle says. “They’re fun and delicious and that’s where the category will win in the coming years.”