High-end rum up double digits in US bars

18th September, 2017 by Annie Hayes

While total rum volume sales declined in the US on-trade during 2016/17, the ultra-premium segment increased by 15.8% – signalling “a new wave of premiumisation” for the category, according to analyst Nielsen.

The ultra-premium rum segment increased by 15.8% in 2016/17

Total rum volumes declined by 0.4% in the year ending 15 July 2017, while flavoured rum, which accounts for 22% of the category and does not include spiced rum, grew volumes by just 1% year-on-year.

Tequila overtook rum as the fourth biggest sub-category within spirits – accounting for 11.7% share of spirits volumes, while rum’s share declined to 11.4%.

However Scott Elliott, senior vice president of Nielsen CGA, says rum “has plenty of options to meet the desire for premiumisation and experience that on-premise visitors come to expect”.

“As consumers continue to visit on-premise channels for the experience, bars and restaurants should continue to broaden their rum range in the same way it does other categories,” he explained.

“There is a portfolio distribution opportunity where, compared to the well-represented light rum category – stocked in 90% of traditional on-premise – 43% of bars and restaurants don’t stock a dark rum, and 24% don’t stock a gold rum.”

According to Nielsen, if current velocity per outlet is maintained and 25% of distribution gaps were closed, additional sales for the category would generate US$74m for light rum and US$180m for gold and dark rum combined.

The analyst suggests that retailers will need to move rum “beyond the confines of generic serve styles” to focus on premium mixers, sipping rums and offering rum-based takes on classic cocktails, such as the Old Fashioned.

Looking across the spirits sector, premium spirits grew by 2.6% year-on-year, while ‘mainstream’ brands grew volumes by just 0.5%.

Overall, total spirits volumes were up by 1.8% in the period, driven by Tequila, up by 6.4%; Cognac, up by 13.6%; vodka, which increased by 1.3% and whiskey, which reported 1.7% growth.

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