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Riding the spiced rum category wave

The owner and CEO of Neptune Rum, Raymond Pugh, gives an overview of the global spiced rum category from Neptune Rum’s point of view and looks at its prospects for driving continued growth

Raymond Pugh Neptune Rum

Until recently, gin had been the darling of the UK spirits world. With everything from classic London Dry G&Ts to coloured, flavoured and infused varieties, the gin market has hit great heights with more than 500 gin distilleries alone in Britain.

Today, many British drinkers have expanded their horizons and moved on from gin to enjoy the approachable and easy-to-drink nature of rum - and I think it is only a matter of time before rum steps further into the spotlight.

A 2020 report by Sainsbury’s confirmed the ‘rumnaissance’, with a 40 per cent increase in sales of rum reported compared to other spirits. The same report revealed that one third of gin fans would opt for rum as their next drink of choice. Since then, rum has grown to become one of the country’s favourite spirits, with the rum market worth £539.5m.

Where traditionally white rum brands like Bacardi dominated the rum space, discerning consumers are now seeking out something new and different, and are turning to dark, spiced and flavoured rum drinks. This has resulted in spiced rum sitting ahead of white rum, with some interesting trends developing. 

As demand for spiced rum began to grow at the height of the pandemic, Neptune Rum Caribbean Spiced saw a welcome uplift in interest. This unexpected growth was fuelled by both a consumer desire to experiment and buy better during challenging times. Mintel research (2020) shows that during the pandemic, at-home drinkers were opting for new flavours of rum-based spirit and investing in more expensive products from brands with diversified portfolios, as well as from challenger brands.

In 2020, we developed the recipe for Caribbean Spiced and it has gone down a storm with consumers and industry professionals alike - it even scooped a coveted gold medal at the prestigious 2021 Spirits Masters awards. 

As a result of the fast-growing demand for spiced rum, we now have some serious players in the segment. This is great news for producers and consumers, as well as the on-trade, which is driven by a desire to innovate.

Key to this growth has also been a shift in perception. Spiced rum is no longer viewed as a novelty or a gimmick and more consumers are buying into the premiumisation of spiced rum, which today stands for refined flavour profiles, provenance, and quality. 

As the popularity of rum has increased, so too has consumer curiosity around ways to serve and drink this versatile spirit. Drinkers are increasing their knowledge through experimentation, trying out different serves and cocktails at home and when out socialising.

No longer are we simply asking for a ‘rum and coke’ at the bar; patrons tend to be quite specific about the type and age of rum they want, as well as the recommended serve for a particular brand. Cocktails remain hugely popular and now premium brands are elevating popular rum cocktails, like daiquiris and mojitos, with superior rums.

For me, however, the most interesting trend to emerge from the spiced rum segment is the mounting desire from the general public to purchase from brands with strong ethics and environmental commitments. Some 12 per cent of consumers surveyed by Mintel said brand ethics influenced their decision to buy a spiced rum, while 11 per cent opted for eco-friendly brands. 

This desire to purchase from brands with purpose certainly rings true for customers buying into Neptune Rum. Our fans tell us they are motivated to buy from Neptune Rum for both the quality of our products and to back our environmental pledges. We contribute profits from the purchase of every bottle to help prevent and clean up ocean pollution, supporting Seabin Project, Surfers Against Sewage and Our Only World.

While the impact of the pandemic has created difficulties for the on-trade, it has revolutionised the at-home market. When we bought into Neptune Rum nearly two years ago, we could never have predicted that Covid-19 could have given us a competitive advantage. Our first real year of trading, while tough, was a surprising success in the end, leading to a once-ailing rum business on the brink of administration being revived by consumer demand for premium rums to be enjoyed at home. 

A strong digital and social media strategy has been key to sustaining sales and reaching new audiences in 2020. The introduction of a new Neptune-owned e-commerce platform in 2021 has helped to further widen our sales channels while allowing customers to buy directly from us.   

While direct-to-consumer has been great for the category and the revival of Neptune Rum, we strongly believe in the power of experience and connection and have been relishing opportunities to introduce our exceptional quality rums to consumers and trade customers through live activations and tastings since the summer. 

It has been great to get Neptune Rum in front of industry and the general public again and see people, especially younger generations (Gen Z and Millennials) being drawn towards quality rums with purpose.

I am truly excited about the current 'rumnaissance' and am delighted to wrap up 2021 having agreed nine new deals that will see our rums roll out across the country through key on-trade, off-trade and bottle clubs.

To satiate consumer thirst for premium spiced and white rums, we have we have a steady NPD pipeline for 2022 with planned launches of innovative RTD and cask editions and a busy calendar of activations.

3 December 2021