It’s been a difficult couple of years for the rum category. The sector has often been touted as the next big thing, but since the optimism of its 2022 peak and several high-profile acquisitions at the beginning of 2023, it’s struggled to make good on its promise.

The 2025 edition of Drinks International’s The Millionaire’s Club highlights the extent to which rum’s major players are finding the market conditions increasingly challenging.

Bacardi has seen consecutive year-on-year declines. So have the Diageo-owned spirit drink Captain Morgan and its regionally sold McDowell’s No.1 Celebration and Ypicoa cachaça, while Pernod Ricard’s flagship rum brand, Havana Club, has seen volumes decline from 4.6 million nine-litre cases in 2022 to 3.3 million in 2024 – a fall of more than 28% in two years.

And it seems Diageo, a company that has been struggling to find growth in this period, is actively divesting from the category, having offloaded Pampero Rum to Gruppo Montenegro in 2024 and Cacique to Bardinet at the beginning of 2025.

Bacardi, Havana Club and the brands in the Diageo portfolio are among the bestselling and most widely available rums on the planet, so, while a poor like-for-like comparison with smaller brands, they do reflect the generalities of a contracting global market.

“In a climate like this, independence is a real strength,” says Bernard D’Offay, co-founder and export director of the Seychelles-based Takamaka Rum.

“When you’re part of a large portfolio, you’re tied to a much bigger machine, and when that machine slows down, so do you.

“One advantage is that we can make long-term commitments to our distributors without being affected by the performance of other brands in a broader portfolio. And as a family-run brand, we can take the rough with the smooth without knee-jerk reactions.

“Of course, you don’t have the same safety net or resources as the multinationals. But what you gain is authenticity and control. You can decide what kind of company you want to be and what kind of rum you want to make, without compromise. That said, while we doubled in size in 2025 versus 2024, we’re still growing from a smaller base compared to the majors, so everything is relative.”

And with the impersonal, multinational powerhouses in decline, perhaps there’s an argument to be made for the hand sell.

“The connections we’ve made, the trust we’ve earned and the relationships we’ve maintained over the years are what have carried the brand forward,” says D’Offay.

“That includes everyone, not just [my brother and co-founder] Richard and me, but our whole team in Seychelles, the guys who distil, bottle and pack every case, the bartenders who believe in the brand, and the distributors who’ve stuck with us and championed Takamaka in their own markets. They’re all part of the story.”

Delivering a personal touch is by no means a novel marketing strategy within an industry built on conviviality, but when customers are consuming less, having a community pays dividends.

Investment options

Dropworks was founded in 2021 by UK-based rum bar owner and consultant Lewis Hayes. Although a newcomer to the industry, Dropworks is nothing if not ambitious. Its distillery in Nottinghamshire is the largest rum distillery in Europe and produces liquid, from scratch, on a scale unprecedented for the UK. When it came to a recent investment round, rather than opting for more traditional models, Dropworks turned to its community to raise funds.

“The reason we went down the route of crowdfunding is that community,” explains Hayes. “Saying that we don’t need the money would be wrong – every startup needs cash to help it through. But where the money comes from is absolutely critical. This was an opportunity for us to build our audience and build a community at the same time as raising.”

Going public to generate investment carries an inherent risk. Laying out your cards on a highly visible table brings increased scrutiny, but it does create a larger audience.

“You do have to be quite selective about when you do it – a crowd isn't just going to give a load of money for something they don't know anything about,” says Hayes.

“We had to build the proposition to a point that we were proud to present it to a group of people who could analyse it and decide if it was for them. That’s a very different thing to an angel investor, or an existing private equity firm, or a major conglomerate. “We have to try to mitigate the risk as much as possible. Different companies and different people will do that in different ways. But primarily for me, I back myself, I back what we're doing, I back Dropworks and, so far, we have succeeded.”

The crowdfunding round raised more than £430,000 from 295 investors, surpassing the company’s initial target.

“There are huge benefits with being selective in where the money comes from,” says Hayes.

“If I were to sell 10% of the company to a large corporate, there might be something within the terms of its investment that would include some sort of control over certain aspects of the business. With our company, the majority shareholders are always going to have control. I love working with other people – it’s not a power struggle on the board or with other shareholders – but I've got a vision, there are people backing that vision, and I've surrounded myself with people who can help shape, influence and guide me in the company.”

Crowdfunding is an old model – the construction of the Statue of Liberty was part-financed with contributions from readers of The World newspaper, but it represents an interesting new opportunity for drinks brands. When your customers are also part-owners, you’ve managed to build a legion of brand ambassadors.

If the Covid-19 pandemic created an artificially inflated spirits market, the craft distilling boom of the first decade of the 21st century was a gold rush. According to The Oxford Companion to Spirits & Cocktails, compiled and edited by David Wondrich and Noah Rothbaum, by 2016 there were almost a thousand craft distilleries in the US and Canada and many of the larger multinational spirits groups were looking among them for the next big thing.

William Grant & Sons purchased Hudson Whiskey, Rémy Cointreau purchased Westland Distillery, Bacardi purchased Angel’s Envy and Dublin’s Teeling, while Constellation Brands bought High West.

Relaunch move

Meanwhile, in 2017 Proximo Spirits acquired a Brooklyn-based craft rum distillery called Owney’s. Now, eight years later, the brand’s founder, Bridget Firtle, has bought it back with a view to relaunching Owney’s next year.

“At the time, there was a swell of these craft spirits being bought by larger groups and, to be honest with you, that was my goal,” explains Firtle.

“I came from Wall Street and I saw an opportunity in craft spirits, and specifically within rum, to build something and sell it. I didn't realise how personally attached I would become to the brand and to the business along the way.

“After the acquisition, the group clearly saw the opportunity but couldn't integrate Owney’s into its portfolios, which is understandable, it didn't have the resources and its focus needed to be on the brands that were responsible for most of the company's profit. At the time, everyone believed that indie spirits were the way of the future but often couldn't figure out how to fit them into a large spirits portfolio.”

The purchase arrived towards the end of the “move fast and break things” startup culture born out of the tech space. Venture capital backing provided rapid expansion for young drinks brands but put the market in a vulnerable position. The dissolution of the Diageo-backed Distill Ventures investment and incubation fund is an encapsulation of the failings of that era.

So how can a large spirits group successfully integrate a startup? Firtle believes the secret lies in a more hands-off approach. “Buy the company, or buy most of it, and the people who are operating it and brought it to success, give them freedom,” she says.

“Check them, act as a board and give them a budget, but let them operate as independently as possible within the organisation. I think that’s how to grow a small, fast-moving brand to the point where it takes up enough space within the portfolio to then smoothly build a team around it.

“One of the biggest takeaways from the experience was the execution of the acquisition itself and that my persona and my capabilities were part of the deal. What I would have done differently is to truly get as granular as possible with expectations and targets, and who makes decisions and approvals. Because if the actual mechanics aren’t specifically outlined, then it’s a risk. Doing anything is a risk, but to put these tangibles in place mitigates some of it.”

Now Firtle has a rare opportunity to have a second chance to grow Owney’s again as an independent.

“The opportunity to buy Owney’s back really came out of nowhere,” she explains. “We left amicably, but after not speaking to [Proximo] for over five years, I had a gut feeling and gave them a call. I feel very grateful to Proximo that they responded so kindly, they didn't have to sell it back to me.

“Now we’re back, we’re going to return what made us special in the first place. Right after the acquisition, we launched a line extension, which was a quality white rum, but it was a blend of the original product and an aged Dominican rum. That’s going to be phased out of the portfolio, and we’re going back to Owney’s original, the same exact liquid we made when we started, along with the overproof as well.

“Then, we're not going to go everywhere all at once. We're going to start regionally, specifically back to our roots in New York and grow from there. I wouldn't be jumping back in if I didn't think there was an opportunity for the brand, but this time I want this to be a legacy business for my family. My intent is different from when I started this, I’m not looking for an exit. I’m looking to build this consciously and profitably for the long term.”