Business ideas for 2020: Rum

Forget what you think you know about rum. Forget the navy. Forget pirates. Forget the rum and coke you buy when you want to feel like a local on holiday. And forget lazy Caribbean stereotypes.

This is the message from a new wave of UK rum producers, who want to chuck out the old assumptions and show you that rum is probably the most diverse spirit on earth. It varies hugely in terms of colour, aroma, and taste and is rapidly being embraced by millennial consumers.

You can be forgiven for not being too familiar with the ins and outs of rum. You may not even know when you’re drinking it… It’s the base for loads of cocktails and Bacardi, the UK’s leading rum brand, has forged a brand identity which hardly ever mentions the word rum. But it’s a drink with a fascinating backstory. Created by slaves working on Caribbean plantations, it was once accepted as currency, played a central role in the American Revolution, prompted a coup in colonial Australia, and continued to be given as a ration to Royal Navy sailors until 1970.

While there aren’t strict regulations dictating rum production, it’s always made from sugarcane molasses or sugarcane juice, which is then fermented and distilled, with the precise ingredients used and distilling process all impacting the flavour.

Why rum is a good business idea

First, we had the craft beer boom. Then came the “ginaissaince”, as the spirit cast off its associations with middle-aged women, pushed its origin story, and massively increased sales. And now rum is next in line for a similar resurgence. Sales have already begun to record strong growth, with figures from The Wine and Spirit Trade Association (WSTA) showing that in 2018, almost 35 million bottles were sold in the UK, with a total market value of just over £1 billion.

Sales of white rum, a mild version of the spirit that accounts for the majority of the UK market, are actually falling, with the overall improvement driven by the increasing appetite for golden and dark rums. Golden rum is aged in wooden casks and generally has a sweet flavour, while dark rum is aged for much longer and has a more smoky flavour. Both are favoured by a new generation of rum drinkers, with sales of golden rum in pubs, bars, and restaurants increasing by 7% from 2017 to reach £374 million. Moreover, the number of rum brands on the UK market increased from around 50 in 2006 to nearly 200 in 2018, underlining the rapidly increasing popularity of the spirit.

WSTA figures also show that flavoured and spiced rums are recording strong sales growth  – with 10 million bottles sold in 2018 – as drinkers seek new creations with novel flavour profiles that replicate the cocktail experience.

John Smith, the owner of Exmoor Distillery, a craft gin producer which is currently preparing to launch a rum made in-house from fermented molasses, notes that this growth is being driven by new drinking habits among younger consumers: “Although millennials drink less, they seek higher quality drinks and are known to be much more exploratory with new spirits and drink trends. Rum is becoming more of a premium and diverse product, which are qualities a lot of millennials seek when choosing a bottle from the shelves”. This chimes with research Harris Interactive conducted for The Grocer, which found that nearly 80% of 25-34 year-old spirit drinkers are partial to rum, as opposed to just over half of those aged over 55.

Bartenders are also central to this spirit of discovery, as Pete Holland, Global Brand Ambassador at That Boutique-y Rum Company, points out: “We have a highly motivated group of bartenders who are actively seeking out new flavour experiences to work with, and this helps the demand, which in turn showcases the rums.” One of this new breed, Sly Augustin, owner of London’s Trailer Happiness tiki bar agrees, saying that “the number of producers making traditional unaltered rum has increased alongside the public’s curiosity, meaning our selection has increased considerably,” and “we don’t have enough space to house all the rums we’d like to.”

Insider opinion

One word has driven the rise of craft spirits and comes up again and again when talking to independent rum producers – authenticity. Tom Read, Head Distiller at Genuine British Rum says: “Brands need to be as honest and as transparent as possible. If you are serious about what you do, then educate the consumer and build a brand that offers, quality, trust and authenticity.”

John Smith, owner of Exmoor Distillery, adds: “Do your research and find what makes your rum different to other brands. Source the finest ingredients, and don’t stop until you have found the winning recipe. As with gin, I think the rum market will soon be filled new recipes from all over the UK, so brands must stand out to be seen.” And Tom Hurst, founder of Rockstar Spirits stresses the need to be creative and take risks: “Be bold, the drinks market is currently extremely open to innovation, so try and create something that’s not been done before and you may be able to seriously reap the rewards of your bravery.”

Finally, Matt England, founder of Sun Rum, stresses the importance of patience and persistence: “The consistency of your message is crucial. If you believe the brand and product are relevant, keep on going even if no one seems to be listening. Eventually people will take notice and when they do, you’ll be more credible and compelling if you’ve maintained your brand story throughout.”