The rum market - Brazil

1.1 Definition and scope of study

Rum is an alcoholic beverage obtained through fermentation and distillation of its main ingredient: sugar cane. Sugarcane is a tropical plant whose sucrose is used as a raw material in the food and beverage industry. The first records of rum date back to the first half of the 17th century in the West Indies, when African slaves discovered that molasses - an ingredient generated during the sugar refining process - could ferment into alcohol. The popularity of the beverage reached North America and not long after, it became one of New England's most profitable industries. Today, the most important ingredient in rum - sugarcane - is the world's largest crop in production quantity.

Rum can be consumed at home or away from home and as a drink or used in cooking. There are different types of rum, the four main categories being :

• White rum
• Amber Rum
• Dark rum
• Spiced rum

The global spirits market is dominated by North America and Western Europe. The rum category accounts for a very large share of the world market for liqueur drinks. The global rum market is growing and is expected to continue doing so in the coming years, largely driven by a few brands with international dimensions.

Brazil is known as the country of caipirinha, even though beer is the most popular drink among Brazilians. It is responsible for 62% of alcoholic beverages consumption in the country. Like cachaça, rum is produced from molasses and other sugar derivatives, being the main ingredient of drinks like mojito and Cuba libre. Even so, the drink has fallen into disuse in recent decades, causing major brands to reposition rum with an eye on new generations from this proximity to cachaça, facilitating the entry of new potential consumers. [Health and Alcohol Information Center]

Like the global market, the Brazilian rum market is also dominated by international distilled beverage giants. However, it continues to be attractive for the arrival of new independent players, as rum is going through a process similar to that which occurred with beer, heading towards a wave of premium and handmade distillates. One of the reasons for this is the trend towards lower alcohol consumption among Brazilians, preferring higher quality over quantity. It is estimated that 44% of Brazilians believe in limiting alcohol consumption for health care purposes. Even so, the consumption of distilled beverages in 2019 was more or less 716 million liters. [Mintel]