Rum’s Time

Despite a boost from spiced offerings in recent years, marketers still seek the rapid growth rates experienced by Bourbon.

Rum brands like The Patrón Spirits Co.’s Pyrat draw attention at the annual Tales of the Cocktail festival in New Orleans.
Rum brands like The Patrón Spirits Co.’s Pyrat draw attention at the annual Tales of the Cocktail festival in New Orleans.

In the wake of the whisk(e)y wave, rum marketers are striving to connect with consumers in new ways. When vodka and Tequila took the spotlight, rum waited patiently in the wings for consumers to transition from white spirits to brown offerings. But a few years ago, Americans instead jumped into whisk(e)y and haven’t shown signs of letting go.

“Growth for higher-end rum isn’t happening as quickly as we thought a year ago because the whisk(e)y renaissance isn’t even close to playing out,” says Andrew Floor, senior marketing director for dark spirits at Campari America. The company markets two Jamaican rum brands, Appleton Estate and J. Wray & Nephew.

“Rum is an underexploited category,” notes Lee Applbaum, chief marketing officer for Pyrat rum owner The Patrón Spirits Co. “The industry talks a lot about whisk(e)y, and artisanal Tequila has had explosive growth, but rum has the same complexity, and each brand has a great backstory on how it’s made. That potential hasn’t fully been recognized yet.”

Tara Heffernon, a self-described rum enthusiast and the bar director for Spoonbar in Healdsburg, California, claims rum often gets a bad rap. “It can be just as important as any other spirit in the cocktail world,” she says.

Some rum brands are making headway, particularly in the super-premium segment, but the overall category has been flat to down in recent years. Rum consumption increased throughout the 2000s, rising from about 16 million cases in 2000 to roughly 25 million cases in 2010, according to Impact Databank. The growth continued through 2012, then slumped in 2013 and again last year. Total depletions declined 1.4 percent to 25.3 million cases in 2014. The Bacardi brand made up about 29 percent of consumption, dropping 5.5 percent to 7.3 million cases, while Captain Morgan ranked second, with a 1.5-percent decline to 6.32 million cases.

Beam Suntory's Cruzan brand includes the premium Distiller's Collection range.
Beam Suntory's Cruzan brand includes the premium Distiller's Collection range.

Mass Appeal

Rum is a key ingredient in mixed drinks and cocktails, with options ranging from simple to complex. Both white and spiced rum are most commonly consumed with cola. “It’s an easy drink to make and that’s one of the key things driving the spiced category,” says Kate Latts, vice president of marketing for Heaven Hill Brands. The Bardstown, Kentucky–based company markets several rum brands, including Admiral Nelson’s and Blackheart.

Arvind Krishnan, vice president and brand managing director for the rum category at Bacardi USA, says part of rum’s broad popularity stems from its flexibility. “Bartenders love rum because it’s so versatile and mixable in cocktails,” he says. “It also has a lot more personality and character than other spirits types.”

The spiced segment has been driving much of rum’s growth over the past several years, and while some marketers say sales have softened recently, spiced offerings remain more dynamic than white rum. The category is also becoming increasingly competitive. “In the past four years alone, there have been nearly 60 new spiced entrants, a competitive trend we don’t foresee changing any time in the near future as consumers across all spirits categories look for new and sometimes even local craft options,” says Dan Kleinman, vice president of marketing for rums at Diageo. “Growth remains healthy and should continue to do so as consumers increase their interest in brown spirits.” The company’s portfolio includes the Captain Morgan, Zacapa and Myers’s rum brands.

New launches in the flavored rum segment are also contributing to gains, although opinions are mixed around the strength of flavors as a whole. “Flavored spirits continue to grow at a very healthy pace,” says Krishnan, noting that the company’s latest innovation, Bacardi Mango Fusion, received an “overwhelmingly positive” response from consumers. Brendan Lynch, senior director of rum and cordials at Cruzan rum marketer Beam Suntory, says flavored rums continue to drive the category, but he also notes the increasing consumer interest in aged rums. Heaven Hill’s Latts says there’s a bit of softness, as some consumers of flavored white spirits seem to be trading to flavored whiskies.

From at least one retailer perspective, flavored rums are a bit of last year’s news. “I’d say they’re kind of dying off,” says Mark Stuart, manager of Buster’s Liquors & Wines in Memphis, Tennessee. He also notes that, as the largest store in the area, Buster’s aims to stock nearly everything the suppliers offer. “The vodka world is worse, but rum is becoming saturated with flavors,” Stuart adds.

Brands such as Rémy Cointreau’s Mount Gay (Barbados aging facility pictured) are targeting whisk(e)y drinkers with dark rum offerings.
Brands such as Rémy Cointreau’s Mount Gay (Barbados aging facility pictured) are targeting whisk(e)y drinkers with dark rum offerings.

What’s Resonating

Stuart says the category’s current dynamism surrounds aged rums, although they’re simmering rather than exploding. “The growth is in dark rums,” he says, noting that the volumes remain minuscule compared to stalwarts like Bacardi Superior. “The first one we started carrying a few years ago was Zaya, which paved the way for everything else. People aren’t beating down our door for aged rums, but they all have a little following.” One big seller at Buster’s is the locally produced Prichard’s Crystal rum ($25.99 a 750-ml. bottle).

Marketers are keen to exploit the newfound interest in dark rums, partly crediting whisk(e)y for stoking interest in aged products with unique distilling processes that result in singular brand expressions. “Overall, the interest in whisk(e)y, in craft spirits and particularly in craft brown spirits has helped rum,” says Gene Song, vice president of marketing for Mount Gay rum at Rémy Cointreau USA. He notes that both bartenders and customers are increasingly intrigued by the category and specific brand histories. “The rum story is very old and artisanal and a lot of consumers aren’t aware of it,” Patrón’s Applbaum says.

Today’s consumers are also more knowledgeable about the quality of spirits in general. “Rather than competition, we see the influence of whiskies across the rum category,” Beam Suntory’s Lynch says. “Rum will always be rooted in a Caribbean lifestyle and the warm-weather occasion. Consumers are now simply more educated about darker spirits.”

The evolving interest in higher-end aged rums has brought a slew of new competition into the field. Last year, category leader Bacardi launched the Facundo Rum Collection, a range of four aged sipping rums. In California, Spoonbar offers roughly 50 aged rums. “There is strong interest in the wide variety of rums that we have, and each one has been selected for a reason, whether it’s the region or the style of rum making,” Heffernon says. “People seem drawn to the significance that rum has had in shaping cocktail history. One big trend is the layering and mixing of different types of rums, which we often do with our tiki-style drinks, as well as our classic cocktails.”

Consumers are discovering rum’s possibilities in cocktails like the Cabbages & Kings, made with Appleton Estate Reserve rum, Dolin Blanc vermouth, ginger liqueur and Angostura bitters.
Consumers are discovering rum’s possibilities in cocktails like the Cabbages & Kings, made with Appleton Estate Reserve rum, Dolin Blanc vermouth, ginger liqueur and Angostura bitters.

Mixology Matters

Heffernon’s customers tend to be more educated about the category than the average consumer, but aged rums are slowly gaining traction throughout the country. Marketers say dark rum’s similarities to whisk(e)y are helping to drive cocktail consumption to some extent, although rum has a storied cocktail past of its own.

Rémy Cointreau’s Song notes that while some brands have a small but loyal following of consumers who drink rum neat, the discovery of the spirit usually starts with cocktails, which provide an opportunity for education. “Many bartenders are well-versed in the stories behind the Mount Gay brand,” he says.

Kleinman of Diageo adds that attitudes are changing. “The market is opening up more than ever to seeing rum as a key ingredient in delivering excellently crafted cocktails,” he says. “We believe rum has the heritage and quality attributes to deliver premium experiences on par with whisk(e)y.”

Beam Suntory’s Lynch is also seeing opportunity with more traditional cocktails. “Cocktail bars across the country are reintroducing rum classics like the Mai Tai or Long Island Iced Tea, but with quality ingredients,” Lynch says. “And tiki is bigger than ever right now. Umbrella drinks, made primarily with rum and fresh fruit juices, will be popular this year as new takes on Rum Runners, Hurricanes and Piña Coladas appear on menus across the country.”

Rum is extremely popular at the Atrio restaurant and the Bar at Lvl 25 at the Conrad Hotel in Miami, according to Conrad Hotels & Resorts food and beverage manager Stephen Carter. In Florida’s warm-weather climate, Carter isn’t seeing much substitution of rum in cocktails that are traditionally made with whisk(e)y, but he notes that customers are branching out from the basics. “The Mojito is always going to be a classic, but more people are asking to upgrade and try different things, such as dark rums in Mojitos,” he says.

Popular drinks ($17) at the hotel include the Blackberry Mojito, blending Zacapa 23, fresh blackberries, fresh mint and agave syrup, and the Piruli, a take on a Cuban candy that comprises Zacapa 23, caramel syrup and fresh orange juice. At Spoonbar, a number of classic cocktails are made with rum. The summer months bring out even more variations because rum cocktails account for 70 percent of the menu’s drinks. One popular rum cocktail at Spoonbar is the classic Mai Tai ($9.50), mixing Neisson Élevé Sous Bois rhum agricole, Coruba Dark Jamaican rum, Pierre Ferrand Dry Curaçao liqueur, house-made orgeat and lime juice.

Beyond cocktails, some brands are emerging as sipping rums, although demand remains small. Either way, marketers see room for growth. “The super-premium rum sector is very small compared with Bourbons or craft whiskies, so we feel that the trend and growth will mirror what we’re seeing in the craft brown spirits category,” Rémy Cointreau’s Song says.

If that prediction comes to fruition, it will have only a small impact on the overall rum category, where the vast majority of volume is in the premium white and spiced segments. Nevertheless, the attention remains focused on the high end. Even Bacardi’s Krishnan notes the trend. “We see the category maturing and moving toward premiumization,” he says. “Consumer palates are becoming increasingly more sophisticated.”