The rum category has been experiencing significant success in the British market, with spiced and flavoured expressions driving much of its growth. What’s fuelling people’s thirst for flavoured rums? And where are the most promising opportunities for brands looking to innovate in this space?
Scope
Claims that rum is going to be ‘the next best thing’ have been circulating for a while, but figures from 2022 highlight it’s finally on its way to becoming one of the UK’s favourite tipple. [1] Rum sales totalled over £1 billion between July 2021 and July 2022, making the UK the third-largest rum market in the world. [2][3] And as it grows in popularity, rum is winning category share from long-held favourites: Sugarcane-based distillates now make up 13% of the whole spirit category – a greater share of the market than whisky – while food and drinks research firm CGA argues that rum is slowly replacing gin in many drinkers’ repertoires. [2] “There is this fatigue with gin,” says Jess Williamson, content manager at leading UK alcohol retailer Master of Malt. “I don’t think the gin bubble is bursting yet, it’s more plateauing than taking a nosedive, but rum’s appeal is certainly growing [to gin’s detriment].” [4]
Rum is particularly attractive to younger consumers, with figures showing that nearly half of British rum drinkers – some 48% – are older Gen Zers and younger Gen Yers, aged 18 to 34. [5] “[Younger consumers] are inherently more predisposed to experiment and, beneath the surface, there’s a desire to shun a lot of the conventional choices,” Lee Powney, a senior partner at brand consulting firm Vivaldi, told Canvas8.
As British drinkers become more adventurous, brands are developing new flavour profiles and expressions that cater to more explorative palates. “Flavoured rum is growing insanely,” says Williamson. “Last year, spiced and flavoured rum made up just shy of 50% of total rum sales and were growing at a rate of about 150% year-on-year.” [4] Indeed, flavoured and spiced expressions have been driving much of rum’s growth. In 2022, the two sub-categories combined grew by 1.2% points in the on-trade (bars, restaurants, nightclubs), taking a total of 6.3% share of spirits, while spiced and flavoured rum grew by 9% and 4.3% respectively for at home drinking. [5]
With British drinkers increasingly receptive to exotic flavourings and creative re-imaginings of their favourite drinks, rum is proving to be a potentially highly profitable playground for experimentation and innovation.
Get me out of here
Food and drink is increasingly being used as an avenue for escapism – a trend that first found articulation amid pandemic travel restrictions, but has sustained into life post-pandemic, too. [6] Commenting on people’s changing cooking and eating habits, managing director of Food and Parenting Alex White confirmed that “we’ve experienced a surge in people searching and engaging with content that helps them understand, appreciate, and participate in each other’s cultures and brings us closer together”. [7] Indeed, this appetite for exploration is extending to people’s drinking habits too, with one in five alcohol consumers saying that they are open to trying new concoctions they wouldn’t have before the pandemic. [8]
This isn’t to say that consumers aren’t still keen on classic spiced rum flavours. The world market for vanilla, for instance, is expected to grow at 5.5% annually over the next five years. [9] “The classic vanilla and Christmas spice flavoured rums are always a crowd favourite,” says Alexandru Sandu, bartender at leading London rum bar Trailer Happiness. However, he explains that coconut and fruit flavours are trending too, particularly pineapple and citrus fruits such as orange and clementine. [10]
For co-founder of premium spirits distributor Mangrove Nick Gillett, escapism plays a central role in the recent growth of the flavoured rum category. “Rum is made predominantly in fun, exotic places so brands can build on that lifestyle element. You’ll see that lifestyle element as we travel more [after Covid],” he says. [11] Indeed, tropical fruit flavours are predicted to increase in popularity across all sectors of the food and drinks industry as “their bright shades can inspire feelings of positivity and help to escape from stressful realities”, according to head of the global taste business unit at Döehler GmbH, Michael Falkenberg. Dragon fruit, lychee, guava, pomegranate, watermelon, mango, and passion fruit are just some of the exotic fruits that are expected to be integrated into juices, nectars, energy drinks, and spirits over the coming months. [12]
Recruiting gin drinkers
While rum with adjunct ingredients has traditionally been understood as a golden or dark spirit base added with vanilla, nutmeg, cinnamon, cloves, ginger, cardamom, or other tropical spices, people’s growing openness to novel flavour combinations has led to the development of two additional sub-categories: flavoured rum – which refers to all sorts of aromatised sugar-cane based distillates – and botanical rum, a gin-inspired flavoured white rum.
“Flavoured rum is a lot newer on the scene, less established, while spiced rum has been around for a very long time,” says Williamson. “The new flavoured rums are appealing to rum drinkers as well as gin drinkers, particularly botanical rums which build a bridge between these two spirits. They bend categories in a way that we haven't really seen in a lot of other spirits.” [4] Expressions such as Mad City Botanical Rum are clearly designed to attract curious drinkers who are moving away from the gin category, with its blurring of categories set to appeal to the 60% of British drinkers who are receptive to new versions and flavours of popular alcoholic beverages. [13]
“People are not switching from gin or vodka to only darker spirits. They want more discovery, more exploration, and botanical rum bridges between all these different spirits,” says Williamson. “There isn’t such a hard line between all those different categories. A drinker might have a gin, then maybe they’ll try a botanical rum, and maybe a flavoured dark rum afterwards.” [4]
A premium offering
While the spiced market is dominated by sweeter and uncomplicated mainstream brands including Captain Morgan, Bacardi Spiced, Dead Man’s Fingers, and Kraken, recent years have seen smaller, more premium brands entering the flavoured game. “You do see some premiumisation in the spiced and flavoured category,” says Gillett. “Some people create more delicate liquids that will allow some subtlety. Of course sweet sells, but there’s absolutely room for premium flavoured expressions too, maybe for a slightly older age group whose palate has evolved. As people learn more about rum, sugar levels, complexity of the spices, and the use of natural flavourings become ever more important.” [11]
Premiumisation is indeed a yet unexplored avenue for brands looking to innovate with new flavoured rum expressions. [14] In 2021, premium rum recorded an 18% increase in value sales in the off-trade (at-home drinking) as the average-priced segment experienced a decline of 1.7%. [3] Overall, the premium and super-premium segment has seen volumes grow by more than 140% in just five years, with higher-end rums now making up just short of 10% of the market. [15]
Sandu points out that while sweeter rums aren’t going out of fashion any time soon, premium, drier flavoured expressions made with natural ingredients rather than artificial aromas are a welcome addition to any back bar. “If I were given the choice I’d rather stock dry spiced or flavoured rums in my bar because it would be easier to make balanced cocktails with them since I can control the level of sweetness I can add to a drink. The only sugared flavoured rums I would be inclined to work with would be genuine rhum arrangé that have agricole rhum as a base. They use fresh fruits and spices that are macerated into the rhum, usually for months, and the results are simply delicious,” he says. [10]
Insights and opportunities
A ready-to-drink opportunity
The market for ready-to-drink (RTD) alcohol products shows considerable traction and demand from consumers. Volumes have been growing faster compared to any other major drinks category since 2018 and are expected to keep outperforming the entire beverage alcohol market over the coming years by increasing their market share from 4% in 2020 to 8% by 2025. [16] Vodka and tequila have been successfully tapping into the RTD opportunity, while rum has some catching up to do, despite the category offering plenty of potential to dominate this market. In July last year, Diageo’s Captain Morgan announced a range of three, 5% abv spiked coconut water expressions – Lime Mojito; Piña Colada; and Strawberry Daiquiri – in partnership with The Vita Coco Company. Similarly, The Kraken Rum, launched a three-strong range of 5% abv canned cocktails: Kraken & Cola, Kraken & Ginger and Kraken Rum Punch. With these products only available in the US, the UK market is entirely up for grabs.
Gastronomic influences
The coming months will see the wider spirits category embracing savoury flavours. [17] “These flavours are inspired by food,” says Williamson. “Aromas like chilli, miso, or herbs. Palates are changing, people prefer bold flavours now, which by the way explains the rise in peated whisky and IPAs. People are looking for something… ‘more’, and savoury flavours are a way to just do that.”[4] Bathtub Gin, for instance, has recently launched a Miso, Black Cardamom, and Pine expression, while Atom Lab unveiled a Smoked Chilli variant as part of its #173 Rum range. Both are designed to appeal to foodie-oriented consumers: Atom Lab even suggests consuming its Smoked Chilli rum at a BBQ, ‘neat, over ice, while we burn our sausages’.
White rums
Botanical rum might represent an effective avenue to lure gin consumers into the rum category, but white rum bases offer plenty more potential to brands keen on flavour innovation. Mainstream brands have successfully tapped into this opportunity in the North American market. Bacardi boasts an ample choice of flavours ranging from citrus to berries. Meanwhile, white-flavoured expressions are few and far between in the UK market, where the selection is limited to traditional rum flavourings such as Lytham White Chocolate and Coconut or classic exotic fruits such as House of Elrick Mango White Rum. Innovative flavoured white rums can offer drinkers greater variety in the preparation of classic rum cocktails such as Daiquiris and Mojitos, and can be employed as a replacement for vodka and gin too.
