This article first appeared in the Drinks International Rum Supplement which can be read in full here
It’s been a disappointing few years for rum in the US market. While the country remains perhaps the category’s most important, it’s been on the decline.
According to IWSR data, in 2023 the US accounted for 25% of the global volume share for premium and above rum sales, but declined by 2% on the previous year. For standard and below rum, the country accounted for 12% of the global volume share in 2023, and here the declines are more pronounced – the segment dropped by 6% in volume between 2022 and 2023 and is expected to continue to fall by 3% CAGR until 2028.
And on a granular level, the results are more alarming. The IWSR’s US Navigator, which has tracked monthly volume data in the states since 2019 reports that from January to July 2024, rum fell in the US by 5% compared to the same period in the previous year.
The report points to a lack of innovation in the category. New products have entered the market at a markedly slower rate than rival categories such as American whiskey and agave spirits, but perhaps equally important is that the category has found it more difficult to convey premium value in a market where 43% of sales are in flavoured rum.
“The lack of a standardised framework for rum production makes it harder for brands to convey a quality ladder across rum products,” says Marten Lodewijks, president of IWSR’s US division.
“High-end rums, however, are relatively more affordable than high-end products in competing categories. Brands could lean into this, especially in the current economic climate.”
Rum’s declines only slightly outpace a spirits market in a downward trend. The Wine & Spirits Wholesalers of America (WSWA) reports that the spirits category fell by 3.9% in volume in the 12 months through August 2024 and predicts that the negative trend will continue into 2025 as consumption continues to decline.
However a silver lining could be found in the spirit-based RTD market. The sub-category now accounts for 16% of the US RTD market and in January to July 2024 recorded gains of 11% on same period of the previous year. Perhaps for rum in the US, the future could be pre-mixed.
