In the GB market, cocktail growth is now at 10% growth year on year, taking the value of the category past the £600m mark for the very first time in 2020, with rum featuring heavily in this growth.

14 February, 2020

Rum in the on premise

CGA senior consumer research manager Charlie Mitchell

CGA senior consumer research manager Charlie Mitchell shares what we can expect from rum and trends to watch out for as the category continues to grow.

Often hailed as the “next gin” in terms of untapped potential, the start of 2020 has brought with it a renewed optimism around rum in the on premise, with bartenders, mixologists and cocktail aficionados alike enthusing about the possibilities for the category. Looking behind the buzz, CGA data highlights that there may well be reason to be excited ahead of what may be a vital year for the spirit, which has arguably taken a back seat over recent years, with consumer attention being stolen by the likes of gin, tequila hard seltzers and other boom categories.

Before looking ahead to what may be an exciting decade for rum, it is pertinent to take stock of where the rum category is and has come from over the past few years. Undoubtedly, one of the key trends that has had a significant impact on rum in the recent past has been the consumer demand for experience in the on premise and cocktails, which has combined to manifeste itself in the form of tiki bars. With rum at the very heart of these high tempo, experience-led outlets, the category has been at the forefront of cocktail growth and continues to reap the benefits.

In the GB market, cocktail growth is now at 10% growth year on year, taking the value of the category past the £600m mark for the very first time in 2020, while over in the States, a whopping 26% of all adults drink cocktails in the on premise – a huge audience that continues to diversify and grow. What’s more, rum features heavily in this growth.

In the GB market, white rum has increased its share of cocktail serves by 4.6 percentage points, stealing this from the likes of vodka and non-cream liqueurs and moving it into fourth place as the most used category for cocktails (after vodka, non-cream liqueurs and specialities). Similarly, golden and dark rum have increased share too, by 3.0 and 2.7 percentage points respectively.

For the US cocktail market, light rum ranks as the fourth most popular spirit base for cocktails, while dark/spiced rum places sixth – further signifying the importance of the category to what is an increasingly important cocktail market. This is further amplified when looking at the most popular cocktails in the US market. Of the top six cocktails chosen by consumers, four contain rum as a key element, with Daiquiri ranking as the second most popular cocktail overall.

However, rum is far broader than tiki and, while cocktails have a role to play within the category, the most frequent consumption in the GB market is with mixers – typically of the draught standard variety. Rum continues to hold its own against category threats, maintaining performance over the past year in both volume and value terms. However, delving further into this, it is flavoured and spiced rum that has driven growth, with nearly 20% value growth in on premise sales over the past year. This is offset by poorer performance in the larger, more predominant white and dark varieties.

With this increase in less mainstream rum variants, so too has come an increase and diversification in consumer base. There are nearly half a million more on premise rum drinkers in the GB market than in 2018, a figure only beaten by that of gin.

The story is a similar one in the US On Premise market, where volume performance has remained stable in 2019. However, below this top line picture is a fascinating indication of a changing consumer dynamic, which may have implications for the wider rum category. The nuances of the category are compelling, suggesting a shift away from more established brands towards more niche variants, including flavoured and more premium options. Indeed, looking at previous success stories in spirits, this demand for higher quality, along with an increased interest in provenance, heritage and back story may indicate that rum is very well positioned indeed to take advantage.

Taking note of this macro trend, operators are reacting accordingly. Indeed, CGA research with the most influential bars in the London on premise highlighted rum as one of the categories where bartenders were most likely to increase ranges. This has not been confined to top end outlets however, with the average GB outlet now stocking more rum brands than this time last year.

So what is driving this increase in brands stocked? Interestingly, this is biased towards flavoured / spiced, white and dark rum brands, whereas golden rum is perhaps being neglected somewhat by the mainstream. Of course, operators are considering performance, piggybacking on to some very impressive growth figures for spiced and flavoured rums and stocking accordingly. Indeed, the likes of coconut flavoured rum are increasingly popular in the US on premise, while spiced rum is a staple of any bar across the GB market. However, when considering the credentials of the golden rum consumer, it is perhaps being given an unfair ride.

Golden rum consumers are the most likely to consider themselves knowledgeable about spirits and are also the most likely to “trade up”, paying more for a higher quality of drink. Going back to those influential London outlets, it seems as though, far from leaving the category behind, they are utilising golden rum to attract these potentially lucrative and well-informed consumers into their bars. When compared to the next CGA level of quality; “Platinum” outlets across London, influencer bars stock double the amount of golden rums, averaging 8.2 brands.

With the macro trend of consumers drinking less, but better, alongside the desire for information and stories, it seems as though the opportunity for premium rum is primed and could well hold the key to future category growth.

However, what is clear is that to unlock this opportunity, consumers require support. Education is often heralded as the gateway to consumption within the high quality spirits market and this is no different for rum – a category which CGA data highlights as suffering from consumers lacking in the required confidence to be able to navigate what could be seen as a complex and intimidating category. Often unable to differentiate between age statements, sub-categories and brand families, consumers are keen to learn more about a drink that is steeped in history, but this all too often fails to translate. Whilst 59% of rum drinkers are choosing to drink at least one ‘spiced rum’ brand in the on-trade, only 41% claim to drink ‘spiced rum’ when asked which styles of rum they drink, highlighting a missing link between brand and category knowledge.

With such a rich heritage and story, alongside a product that often originates from aspirational holiday and travel venues, the stories of rum brands are some of the most intriguing in the drinks industry. With so much anticipation and intrigue at the start of the decade, it is the ability to pass this to knowledge-thirsty consumers that perhaps holds the secret to a decade of potential growth in the rum category.

With years of colective on-trade experience, CGA’s experts are ready to help you plan for the future with confidence. For more out-of-home eating and drinking insights and to discuss rum and coktail future trends and opportunities, explore our website and get in touch by emailing us at hello@cga.co.uk.

This is an edited version of an article that first appeared in Global Drinks Intel. 

     

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