Rum lightens up

The US is the biggest global market for white rum. It reported 0% growth in volume and -13% in value in the five year-period 2009-14, according to Euromonitor.

“We’ve seen Bacardi and Captain Morgan continue to lead the US rum market with a combined share of close to 60% and expect that trend to continue as both leading brands intensify their efforts to regain ground lost during the past few years,” says Marina Velez, senior product manager for data & insights at the Beverage Information & Insights Group.

“While the major players were challenged, over the past few years competition has grown from smaller newcomers to the category,” she says.

The lifting of the embargo in Cuba would change the face of the US market not only for Pernod Ricard, but also for its competitors.

Diageo told Drinks International: “We believe white rum will further grow with the removal of the half-century trade embargo in Cuba, as this is likely to stimulate conversation about new imports, increasing the interest in the rum category again. We expect to see a similar renaissance trend we’ve witnessed in gin, when new premium and/or craft brands entered the category and reignited the consumer interest.”

From a US analyst’s perspective, Velez says: “We don’t expect to see much of an immediate impact. Most of the major players have already been operating outside of Cuba. What small brands that do operate in Cuba have been producing and shipping to all other markets, except the US, for all the years since the embargo was placed and would have already been major competitors to the key rum brands on a global basis. By lifting the embargo, yes it would open business ties with the US market, perhaps infuse renewed interest in the category, but we would not expect key brands like Bacardi to be adversely impacted by those smaller brands.”

For Perrot at Saint James, the opening up of the category in any way can only be a good thing. She says: “I think it will bring a big dynamism to the category at first, that will then calm down. An opening of this kind can only be positive, for the sector and all the rest.”

Looking to the horizon – embargo or no embargo – white rum is forecast to stabilise and steer its way out of decline. With new entrants to the category and a concerted effort to educate consumers on the spirit, it is hoped that white rum can piggyback on the success of brown spirits and gin.

Politically, economically and socially, all eyes are fixed on the soon-to-be squally white rum category.