Could rum be the dark horse of spirits? Rum author and importer sees it chip away at whiskey’s supremacy

By Mary Ellen Shoup contact

- Last updated on GMT

Consumer preference of rum will keep growing as whiskey prices continue to climb. ©iStock/K-Paul
Consumer preference of rum will keep growing as whiskey prices continue to climb. ©iStock/K-Paul
Driven by the rising price of whiskey many US consumers are switching over to rum in the search for an alternative brown spirit. 

In 2016, revenues of bourbon and American whiskey rose 7.7%, reaching $3.1bn compared to rum which generated $2.3bn in revenue after being on the decline for the last few years, according to the Distilled Spirits Council.

Despite its declines, rum is in the midst of a resurgence as whiskey prices climb, according to Ed Hamilton, rum importer and author of The Complete Guide to Rum​.

“Brown spirits drinkers are getting sticker shock when they see that their good bottle of whiskey is now $75 or $100,”​ Hamilton told BeverageDaily.

“If you look at the good, solid drinking rums, most of them are under $50.”

Bartenders in particular are playing an influential “gatekeeper”​ role in educating and converting consumers to rum through cocktails and other alcoholic beverages, according to Hamilton.  

“Before, most people didn’t think of rum as a credible spirit,”​ he said.

Educating customers about rum seems to be paying off as two-thirds of consumers who try a spirits drink they enjoy at a bar are likely to go out and purchase the same product at retail, according to Beverage Marketing Corporation research.

Infiltration of knockoff rums

“Although rum is growing, I’m also seeing a lot of ‘pirate-type’ rums that have no provenance,” ​Hamilton said.

In order for a rum to be considered credible in the spirits market, it should have its origin of distillation and where it was bottled either on the label or on its website, according to Hamilton, pointing to generically labeled “Caribbean rum” ​as a red flag.

“I don’t subscribe to the ‘proprietary this and proprietary that’ and ‘we can’t tell you’,”​ he added.

“If you look at the biggest guys like Diageo, they tell you where it comes from and that’s true for any spirit.”

Consolidation of rum industry

“There’s been a consolidation since 1995,”​ said Hamilton, who has seen more Caribbean distilleries close than open since the mid-90s.

Some of the largest rum producing countries like Puerto Rico and Trinidad have stopped producing sugar, an essential ingredient for the rum distillation process. Because of this, these countries have had to start importing molasses to continue their rum production, Hamilton explained.

“Molasses is getting more expensive and there are fewer producers of it,”​ he said.

Despite these pricing pressures, the outlook on the rum market is positive as people are “drinking less, but better” ​and flocking to more affordable quality spirits options with transparent origin stories. 

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