The rum business is not unlike a mutual fund whose portfolio consists of a mix of high-dividend, blue-chip equities and small cap growth stocks — with maybe a smattering of “.com” high-flyers thrown in as well.
While “past performance is no guarantee of future results,” rum marketers have valid reasons to expect that current consumption trends will continue to drive their business and create some profitable new opportunities in the process. All of which is also good news for retailers both on-premise and off-premise.
Rum has consistently outperformed the total distilled spirits business for many years and remains one of its brightest and most vibrant categories. Rum consumption is up about 24% since 1994, according to the latest data from Adams Business Media (preliminary estimates from Adams Liquor Handbook 1999). During that same period, total spirits consumption grew by less than 1%. Today, rum accounts for 10.3% of all liquor consumed in America–less than vodka (23.8%) and cordials (11.6%) but more than gin (8%) and tequila (4.7%).
Tequila has been making headlines recently as the fastest-growing type of spirit in the U.S. It is up 45% since 1994. But at 6.8 million 9 liter cases in 1998, tequila accounts for less than half the actual volume of rum (14.5 million cases). Yet there are some noteworthy similarities between the two categories as well as some significant differences.
Both categories have long been dominated by single brands — Bacardi in rum and Cuervo in tequila — that only recently began to experience serious challenges from competitive brands (Captain Morgan and Sauza respectively). But unlike many other categories, new brands and line extensions in both rum and tequila appear to be truly invigorating the business and drawing in new consumers. Both categories also share a fun-loving, hard-partying and relatively youthful exuberance (in a moderate and responsible sort of way). And both categories are complementing this strong base by cultivating a small, growing and increasingly sophisticated consumer segment for their a