Do you know the old adage that says, in business, if you’re not moving forward, you’re moving backward? Well, this applies even to the Rum sector, which is over 400 years old.
The competition is fierce; there are so many competitors that it would be impossible to list them all, and for a good reason. On the one hand, you have the large spirits companies and, on the other hand, the many agricultural structures in many countries that produce exceptional rums distilled in accordance with highest professional standards.
In this article, we will present the different types of rums, as well as several innovations that explain why rum is gaining in popularity and is on its way to becoming the number one spirit, to the delight of enthusiasts, investors, and professionals in the industry who can recognize a good yarn when they see one.
Innovation in the spirit industry
Whatever the business sector in which you operate, innovation is essential to avoid stagnation, improve productivity, outpace the competition, retain customers, and offer new products. In a nutshell, innovation is essential to growth. In the highly competitive world of spirits, innovation is also vital to set yourself apart.
The Oslo Manual for measuring innovation defines four types of innovation: product innovation, process innovation, marketing innovation and organizational innovation.
Rum from the French West Indies: an innovative product that is not new
Innovation can be found at the level of production, which tends toward eco-responsible agriculture, and thus greener production, reducing the carbon footprint associated with a brand to the lowest possible level. Some agricultural rums pride themselves on producing pure cane rum, which is 100% organic. You may think that all this is a trend, that it is just a desire to capture the attention of certain consumers, who are certainly growing in number, and you are right. Some companies are going to ride the wave of eco-friendly products, but as in everything, some names will stand out. The prize for the most environmentally friendly agricultural rum goes to certain rums from Martinique, which for more than 26 years has been striving to produce a rum that is energy self-sufficient, reducing the production process to a strict minimum in order to produce a 100% organic rum that is totally environmentally friendly. They have even gone so far as to select a sugar plant that is capable of transforming more carbon into oxygen, thus achieving carbon neutrality during the production process. Guadeloupe is currently in the same position.
The dynamic aging of Tres Hombres Rum
Have you heard of dynamic aging of alcohol? Well, heat, humidity, pressure and even vibrations (like the rhythmic beats of music) are all techniques known as “dynamic aging.” All of these processes exist and allow for more efficient maturation of certain spirits that require time to improve and extract the best aromas.
Tres Hombres Rum is aged on a wind-powered cargo ship that sails the Atlantic for several months in barrels of raw decanted rum. The movement of the ship allows the rum to shake against the barrel, while natural changes in temperature and atmospheric pressure cause the wood in the barrel to expand and contract. After only three months, the rum becomes so mature that even the distillers can hardly recognize their own product. The result is far superior to rum that has been stored in a warehouse or distillery, even for many months.
Rum, towards an announced premiumization
Although rum has largely lagged behind the premiumization trend that other spirits capitalized on early on, product innovation and targeted marketing are now driving rum’s potential in the UK and France.
Spirits that have gambled on a premium product or range have won their bet and made their fortune by opening up new markets for luxury products. Today, they have a turnover of more than 10% on their high-end products, while premium rum stagnates with difficulty at around 4%. To give a simple example, only 10 years ago, premium gin represented 5% of global gin sales. Today, this figure has exceeded 14%.
As for rum, the lack of a consistent set of rules worldwide, particularly with regard to aging and the relative diversity of products and styles, has made it more difficult for consumers to define and understand premium rums. The rum industry is already working to put these rules in place to clarify the consumer offer and allow the emergence of a premium rum recognized by professionals and enthusiasts worldwide.
Rum consumers in the UK have already started the trend and have been turning to more expensive and more complex rums for the past 5 years. With an increase of more than 140% over 5 years, these premium rums now represent 10% of the UK market.
Tastes are changing, and rum is evolving
Many brands recognize that millennial consumers represent the wellspring of their future sales and growth potential for the years to come. This is why they are turning to sweeter, fruitier and spicier products. Rum, a product of excellence recognized for its unique flavors, a spirit used in many cocktails around the world, is now sold spicy and fruity to the delight of “young” consumers. Coca-Cola has also recently launched a new premium range, “Signature Mixers” designed specifically to be mixed with spirits and particularly rum. Coca-Cola Signature Mixers offers smoky, woody, spicy or herbaceous drinks that, when mixed with good rum, create new flavors. The “Cuba Libre” is thus shaken up. There is no doubt that these innovations will continue to push up rum sales.
In France, premium rum is not left behind and has seen an increase of more than 30% in the last year. Little by little, the French, and the millennial generation in particular are moving away from cheap rum to quality and more complex rums. According to professionals and specialists, the next 5 years will continue to witness the growth of the rum industry, which has already grown strongly over the last 5 years.
The next trends in spirits
The younger generation is attracted by less bitter, sweeter and fruitier tastes produced in an eco-friendly way. These wellness-conscious consumers attach real importance to their alcohol consumption. The versatility of rum has allowed it to register the strongest growth last year compared to all other spirits (except gin). The combination of rum and coconut remains a best-seller among connoisseurs, and bartenders can attest to this.
Reasons why the big brands are turning to sweeter and more experimental tastes. What do you know about cocktails? Well, have you heard of alcohol-free or low-alcohol mocktails? A study showed that 46% of people under 35 are likely to drink a mocktail rather than a cocktail; this figure drops to 16% for the over 35 age group.
Rum preferred in cocktails, mocktails and sensory hybrids
A research by GlobalData company has highlighted the emergence of a new way of consuming spirits by combining different spirits to create new ones. This is how Vodquila (a combination of vodka and tequila) and Rumquila (a combination of rum and tequila) were born, but the experiments do not stop there, as Courvoisier cognac has been combined with 18% red wine to create Courvoisier rose. Other hybrid drinks are being proposed today in order to push back the boundaries of categories and allow the exploration of new tastes and flavors.
Faced with growing demand, the rum industry is becoming more structured and is offering consumers an increasingly clear and targeted range. Old rums are not left out, and nowadays we can find bottles of rum over 50 years old, with complex flavors that can’t be rivaled by the greatest whiskies. Rum is the only spirit in the world to be offered in three colors, white, amber or dark, offering rich and unique tastes to an increasingly sophisticated and demanding consumer. Professionals and major brands have made no mistake in investing heavily in rum, whether to innovate in taste, marketing, production or distribution. The industry is getting organized, and there is no doubt that premium rum will become a must for family dinners, restaurants and bars.
It is worth remembering here that if rum can be combined today under different facets, it is thanks to the work carried out by researchers on the quality of the cane, harvesting methods, distillation, aging, packaging and marketing. Today, innovation impacts all stages of production for the pleasure of producers and consumers.
In the context of this craze for rum, the first international rum summit, SIR 2023, will be held in Guadeloupe in May 2023.
The Crédit Agricole is an official partner of the SIR 2023 and naturally provides the services of Village by CA, a startup incubator and open innovation actor. Village by CA of Guadeloupe plays an instrumental role in assisting startups to maximize their expansion, the structure operates from the premises of the “Caisse Régionale Mutuelle de Guadeloupe” (Crédit Agricole).
Village by CA core values are revolving around Business development, Networking and Innovation, proof if any were needed, that the expansion of rum on a global scale will keep all its promises and continue its ascent towards a golden (if not amber-colored) future of all the sector actors.
The “Crédit Agricole” is a citizen bank, a well-known actor of sustainable development. It’s also the 10th largest bank in the world, 3rd in Europe and 1st bank in France. No. 1 insurer in France, No. 1 Bank insurance in Europe and No. 1 European asset manager.
