Is 2024 the year rum explodes in GTR?

While rum often has the same pedigree as brown spirit rivals whisky and Cognac, in travel retail there is lots of potential for it to grow. We discover why 2024 could be the year in which the rum category booms in GTR.

*This feature was originally published in the December 2023 issue of The Spirits Business magazine. 

When it comes to global travel retail (GTR), rum has never reached the same heights as other brown spirits. Cognac and whisky perform comfortably in the super-premium space, and lead spirits sales in this channel. While rum has the quality and character to compete, it has long languished in the low- to mid-range, hindered, seemingly, by a lack of representation and investment, with most marketing budgets oriented towards standard variants.

“Duty free has been very slow to embrace the premiumisation trend for rums,” says Matthieu de Lassus, CEO of rum distributor Spiribam UK. “Until very recently, it wasn’t unusual to count no more than three or four rums on the shelves – most below £20 a bottle.” Now, the landscape is shifting. Demand for brown spirits is driving a growing interest in rum among travellers, and more brands are investing at the higher end.

Two major rum acquisitions took place in 2023 – Diageo’s purchase of Don Papa, and Brown-Forman’s acquisition of Diplomático. Moët Hennessy’s Eminente Cuban Rum made its GTR debut at Paris Charles de Gaulle Airport in June, following its domestic launch in 2020.

Campari, meanwhile, invested in a new permanent interactive boutique for its Appleton Estate Rum at Sangster International Airport in Jamaica. Cristhel Molina, global marketing manager for Don Papa, says GTR is “diversifying its range of rum listings from more mainstream premium brands to craft and unique ultra-premium rum brands – making the category even more interesting for both the operators and consumers alike.”

Smaller brands are betting big too. In 2022, Takamaka Rum opened an outlet in its homeland at Seychelles International Airport, where sales have “more than tripled over the past year”, according to co-founder Bernard d’Offay.

“From a global perspective we felt it was important to demonstrate our seriousness and commitment to GTR as a channel. We can see from our performance in Dubai Duty Free this year that we are tracking ahead of the wider rum category, and even ahead of the wider spirits category.”

While the premiumisation trend in all of GTR after the Covid-19 lockdowns is helping all categories, the rise of rum in domestic markets and its post-Covid recovery is also boosting confidence. Rum rebounded strongly compared with other spirits categories in 2022, says Jairo López Suárez, head of GTR insights at IWSR Drinks Market Analysis. Volume sales of rum in GTR rose by 100% in 2022 year on year – second only to gin at 112% – and is expected to rise by 7% CAGR to 2027. A full recovery is forecast in 2023, when volumes are expected to reach pre-pandemic levels.

“One of the biggest changes in the GTR market post-pandemic is the premiumisation of the offering,” says López Suárez. “This trend is particularly relevant in the rum category as it has a much higher presence of lower price band products compared with other spirits categories.”

Dark rum’s premiumisation

The growing awareness of rum as a sipping spirit is helping to lift perceptions, positioning some rums as “too special to be mixed”, says Melissa Carter, senior strategist at travel retail marketing agency Altavia. “We are seeing a lot more premiumisation of dark rum, with a mirroring behaviour and language from the whisky category, for example ‘barrel aged for eight years’.”

Takamaka unveiled a whisky cask-finished rum at Whisky Live in Paris this year, with the intention of hooking in whisky lovers, explains d’Offay. “This cross-category flavour experimentation will support consumers who historically would have just stopped at the whisky shelves to delve across categories.”

Don Papa is looking to offer limited time releases from its collection of one-off ultra-premium bottles as travel retail exclusives, such as its small batch Port-cask-finished rum, first launched in domestic markets in 2021. “In travel retail, people are always looking for product expressions that are unique and special – something that is not as easily available, so unique and interesting product offerings are more crucial in this channel,” says Molina.

Standalone boutiques and immersive experiences are part of targeting the luxury consumer, but will become more crucial for rum as more brands appear on shelves. Rum has a unique opportunity to stand out in this space, believes Carter. “Rum has the ability to be more colourful, playful and high tempo, as it is less bound by tradition,” she says. “Rum automatically gives you licence to have more fun with GTR activations. The operators and retailers are screaming out for more engagement, and rum is a category that can confidently deliver on this.”

Huge ambitions

Bacardi, which led the GTR rum market in 2022, has “huge ambitions” for its rum portfolio, says Ignacio Vazquez, the company’s global travel retail head of marketing. Its strategy is spearheaded by campaigns such as Rum Tales, a pop-up held at Miami International this year that showcased four brands: Bacardi; solera-aged Venezuelan rum Santa Teresa 1796; blended Caribbean rum Pyrat; and Facundo, from its ultra-premium Puerto Rican collection.

Its Rum Selector quiz tool paired customers with a liquid, helping them to explore the category. Vazquez says: “Rum is rapidly premiumising, in domestic markets and in travel retail, driven by the cocktail revolution and the global premiumisation trend.”

However, Tequila could hinder rum’s efforts to grab a share of the super-premium market. Volume sales of agave-based spirits in GTR grew by 11% from 2019 to 2022, making it the only category to have rebounded to pre-pandemic levels, according to IWSR. Both are seeing exponential growth in domestic markets, and both are keen to sweep up any gin enthusiasts looking for something different, while also working to be seen as a premium sipping spirit. Tequila shouldn’t be underestimated, but its presence in GTR, compared with rum, remains small. Rum has just as much to gain.

Could 2024 could be the year that rum works its way into the hearts and minds of the luxury consumer? There seems no better time for rum to make its move.