Fun, pirates, Tiki bars, tropical serves, mojitos… the connotations associated with rum are forever imprinted across the mainstream, making the category an absolute must-stock across all on-premise venues. Despite this mainstream popularity, rum has seen some serious declines in sales over the last 52 weeks, performing behind total market, meaning that the category is perhaps in need of a rethink to get consumers experimenting once again.
The Fifth Biggest Spirits Category, but Declines are Evident
9% of all dollars spent on spirits in U.S. bars and restaurants is on a rum serve, making the category the fifth largest behind whiskey, tequila vodka and cordials. Despite this, the category is losing share, with volumes down -10% in the latest 52 weeks versus a year ago. In fact, it is only whiskey—the spirit industry’s number one—that is seeing greater share declines than rum. Across golden, dark, and white rum, declines remain consistent, with golden down -11%, dark down -10%, and white down -9%.
Premiumization and the Decline of the Mainstream
When you look beyond the headline numbers, there are some intriguing dynamics at play across the rum category. In the on-premise, the category is dominated by the top three biggest, well-known, mainstream brands. The top three account for a huge 59% of all sales and are driving the performance of the entire category.
This shows that there may be an opportunity for higher-end, more premium products to start to make a dent in the on-premise by capturing the imagination of consumers. In terms of share, all products that are categorized by NIQ as ultra, super premium, or premium are outperforming those in the mid category, stealing share along the way.
Lessons to be Learnt from Tequila
We have seen dynamics like this at play on a much grander scale in the tequila category, which has consistently been a top performer over recent years. With greater education around the category and consumers becoming more consistently aware of a grander scale of products, it has been the ultra and super premium brands that have driven tequila’s growth.
This begs the question, could rum do something similar? Winning with influential bartenders will be key in doing this—over a third of consumers around the world say their drink choice is influenced by bartender recommendation.
The Cocktail Opportunity
And of course, one of the major reasons for tequila’s success has been the continued adoption of the margarita across all kinds of on-premise locations. With the mojito being touted in recent industry reports as the cocktail of 2025, this should give rum a huge boost and attract many consumers who might not necessarily order the category otherwise.
It is not just the mojito though; rum’s flexibility means a whole variety of relatively simple cocktails and serves, such as the dark & stormy and mai tais, can help promote the category on cocktail menus.
Can the Category Grow Outside of Core Markets?
At CGA by NIQ, our OPM database allows us to assess sales performance in bars and restaurants by major city and state. This throws up some interesting opportunities in areas that might not always first come to mind when you think of rum.
Florida naturally sees rum’s greatest share of spirits (13%), but it is actually in Oregon and Texas where the category is stealing share from other spirit sub-categories. Could tailored activations across developing markets help brands push to the forefront of the consumers mindset?
A Younger Consumer – Experience Wins!
CGA by NIQ’s latest On-Premise User Survey, which gets the thoughts of 15,000 On-Premise visitors bi-annually, tells us that the average rum consumer is more likely to be male and skew younger. It is for this type of consumer that experience is key. Group servings in particular should be looked at—two in five rum drinkers say this type of serve would be a key driver of purchase in experiential bars and eatertainment venues.
To Finish…
There is still a lot to shout about for the rum category in the on-premise, and despite some worrying declines, there are pockets of growth and opportunity. The key for brand owners is to work through their operator partners to put the fun back into the category and to educate the consumer around the variety of the category and how the cocktail experience can help grow sales further.
Originally published in Bar and Restaurant news
CGA by NIQ On Premise sales measurement and consumer research solutions provide many more insights into the no and low alcohol category in the US, with expert analysis of categories, channels, occasions and much more. To learn more about core services and opportunities for tailored analysis, contact the CGA team.
