The rum market has a strong potential

© AdobeStock / User: razoomanetu
© AdobeStock / User: razoomanetu

The market for rum has grown vigorously in recent years both worldwide and in Germany with the premium price segment, in particular, expanding steadily. The variety of spirits is also a major factor in rum’s success.

Globally, rum is one of the winners of the spirits market. According to international market research data from 2019, in the retail and restaurant sector, more than 14 billion euros in revenue was generated with just over one billion liters. In 2010, that figure was just under 11 billion euros. The upward trend continues with experts estimating that the curve will continue to rise steadily in the coming years.

According to IRI market research, sales in the overall product group stagnated in the past year (–0.8 percent) with just a slight increase in value of 1.2 percent to the current 526.5 million euros (grocery retail incl. discount, GAM, C&C and drugstores).

As is often the case, however, the premium segment offers good news with signs pointing to growth in Germany. Rum sold at a price point of more than 15 euros and grew by more than 16 percent to 59.4 million euros.

Major manufacturers and importers confirm this positive development. “Even though this segment is still small, it is growing quickly, both in on-trade and off-trade segments,” says Tjalling Simoons, marketing director for Germany, Austria and Switzerland (DACH) at Bacardi. The potential for premium qualities is therefore “immense”, emphasizes Simoons, who has insight into international markets thanks to his association with the world’s leading rum brand.

Rum herstellen aus Zuckerrohr
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Aged varieties are especially popular in the rum market

“The premiumization of rum is already more advanced” in other countries, says Simoons. One can therefore conclude that the trend will continue in Germany, as well. He expects the strongest growth to be in aged rums such as Bacardi specialties Añejo Cuatro (4 years) or Gran Reserva Diez (10 years), which was launched last year.

According to surveys by the London-based market research institute IWSR, India, the U.S. and the Philippines hold the top international positions in the rum market based on sales figures. Cuba and France are in fourth and fifth place, and Germany holds sixth place.

Pernod Ricard Germany also has a very good outlook for the category. A company spokesman points out, “The trend in craft beverages is sweeping the rum category, too.” This can be seen in the “significant growth of the ultra premium segment in an overall stagnating market.” The Havana Club Quality 7 Años and the handcrafted Pacto Navio are among the rums from Pernod Ricard sharing in the positive development.

Referring to the upward trend of the premium category in the rum market, “The less-but-better principle is in full swing here,” says an enthusiastic Markus Hotze, president of Eggers & Franke. With brands such as Mount Gay, Flor de Caña and The Kraken spiced rum, Hotze  believes that the company is “well positioned to take advantage of the opportunities in the market.” With “a wonderful momentum” apparent among high-quality rums starting at 16 euros, the Bremen import company and distributor of premium spirits sees “yet more great potential for development”.

The right rum for every taste

Its wide variety is one major success factor for rum, explains Tina Ingwersen-Matthiesen, president of Borco-Marken-Import. She points out that given its different regions of origin and range of varieties and taste profiles, rum is so appealing because it is the right beverage for every taste and occasion.

Consumers first have to become familiar with these taste experiences, like Ron Vacilón’s luxury range, which is available in 15, 18 and 25 Años varieties, for example. Borco educates consumers about the rum’s varieties through tasting sessions and food pairings which “are playing an increasingly important role.” Tasting sessions in connection with fine chocolate are just one example.

Despite the growing demand for premium products, the strongest category in the full-range retail grocery segment is still the medium-price segment, as Jan Rock, spokesman for Henkell Freixenet, points out. However, the trend towards premium is evident here, as well. He explains, “Due to its complexity and multi-dimensional taste and qualities, rum is becoming more and more appealing to end consumers.” Rock says, “Here, too, we are noticing that the end consumer is increasingly demanding a larger product selection in order to cover many different occasions.”

“A bit of the Caribbean in Germany”

To share in the positive market development, Henkell Freixenet, based in Wiesbaden and the market leader in the traditional German rum segment, is continuing to promote its Pott rum more heavily than rum from overseas. Pott is a blend of rum from Jamaica and La Réunion. “Thanks to this lineage, we are able to offer every Pott enthusiast a bit of the Caribbean in Germany,” explains the company spokesman. While the brand used to be known more as an ingredient in warm winter beverages or baked goods, it is now increasingly popular for cocktails.

Incidentally, rum holds an impressive position in a ranking of the major spirit categories. Along with clear spirits, liqueurs, brandy/cognac and whiskey, it is one of the top 5 segments in Germany. For a global comparison, the German market is in sixth place.

Those interested in the technical background of spirits production will find the right forum at the international industry trade fair drinktec from October 4 through 8, 2021 at Messe München, where exhibitors from all over the world present their solutions – from stills to bottling facilities. Are you looking for a platform to showcase your innovations in spirits production? You’ll find the relevant information for exhibitors here.

Rum Cocktails des neuen Rum Marktes
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Barbara Rademacher

Barbara Rademacher

Barbara Rademacher worked for 18 years as an editor for a renowned trade magazine for the beverage industry. In July 2018, the trained journalist and her long-time colleague Dirk Omlor founded a text and consulting office with the central project getraenke-news.de.