The rum market - Italy (2024)

1.2 The global market

The size of the global rum market was worth $**.** billion in **** and is estimated to grow further at a compound annual growth rate (***) of *.* percent from **** to ****, reaching $**.** billion by ****, up from $**.** billion in ****. This represents an overall increase of **.* percent over five years. The global rum market is booming because the mental category is receiving a lot of attention. Rum is the second favorite drink among all spirits. Consumers are increasingly interested in new flavor profiles beyond those offered by dark and golden rum, and flavored rums are widely used in the preparation of cocktails, shakers, and drink mixes. The medicinal properties of rum have saved the lives of troops and soldiers in war, although not until a few decades ago. During World War I, "Totorum" was used to keep soldiers healthy. Rum can increase bone density. As such, consumed in moderation, it can help prevent osteoporosis and relieve symptoms of arthritis. Rum can help prevent heart attacks and heart disease by increasing good cholesterol, also known as HDL cholesterol, and preventing clogged arteries. Rum is one of the oldest alcoholic beverages. Traditional rum consumers are looking for premium rum products with a unique flavor profile.

Global rum market value World, ...

1.3 The European market

The European rum market is expected to grow steadily from **** to ****. Starting from a value of $*.** billion in ****, it is expected to reach $*.** billion by ****. This represents an increase of **.* percent at a compound annual growth rate (***) of *.** percent. The growing urban population, coupled with rising disposable income in European countries, is fueling market growth.

European rum market value Europe, ****-****, in US$ billion MarketDataForecast

Europe is a promising regional segment in the global market and is expected to show the fastest growth during the forecast period.

In ****, Italy stands out as the leading European rum exporter, with a value of US$***.* million, significantly outpacing other countries. It is followed by the Netherlands and France, with exports of $***.* million and $***.* million, respectively, demonstrating similar competitiveness. Spain, with ***.* million, maintains a significant position, while the United Kingdom and Germany show smaller volumes, with $**.* and $**.* million, respectively. Belgium and Austria, with values of $**.* and $**.* million, occupy minor positions. Major European rum exporters Europe, ****, in million US$ UNComtrade

In ****, Italy emerges as the leading European importer, with a value of US$***.* million, significantly distancing itself from the other countries. Spain and Germany follow with imports of US$***.* and US$***.* million respectively, indicating strong demand ...

1.4 The Italian market

In ****, the market is estimated at ***.** million euros, with a gradual increase expected to bring it to ***.** million euros by ****. This represents an overall increase of **.* percent in six years at an assumed CAGR equal to the European CAGR of *.** percent. Italian market value forecast Italy, ****-****, in millions of € Istat, MarkeDataForecast, Businescoot elaboration

The value of production sold showed significant growth from **** to ****. Starting from €**.* million in ****, the value more than tripled to €***.* million in ****. However, **** saw a decline to ***.* million, probably due to the impacts of the pandemic. Thereafter, the market recovered, reaching ***.* million in ****, an increase of ***.* percent from ****.

Value of rum production sold [***] Italy, ****-****, in millions of € Istat

Between **** and ****, the turnover of Italian companies operating in the distillation, rectification and blending of spirits, therefore including those specializing in rum, grew by ** percent, from €*.** billion to €*.** billion. Despite a decrease in ****, probably due to the pandemic, the sector showed significant recovery in the following two years. In ****, turnover increased ** percent from the previous year to *.** billion euros, and continued to grow to *.** billion euros in ****. Turnover of companies engaged in distillation, rectification and blending of spirits Italy, ****-****, in billion € Istat, Company Register The domestic value ...

1.5 Imports and Exports

From **** to ****, Italy saw a fluctuation in rum imports and exports. Exports peaked in **** at $***.* million, then dropped to $***.* million in ****. Imports, on the other hand, increased slightly, starting from $***.* million in **** to reach $***.* million in ****, then declining to $***.* million in ****. The coverage rate, which indicates the ratio of exports to imports, has remained below * in all years, signaling a steady trade deficit. After a low of *.*** in ****, it has fluctuated close to *.* in subsequent years. This indicates that although exports are significant, Italy continues to import rum in larger quantities than it exports.

Imports, exports and rum coverage rate Italy, ****-****, in millions of US$ UNComtrade

In ****, the United Kingdom was the main recipient of Italian rum exports, with **.** percent of the total, followed by Belgium and Germany, with **.** percent and **.** percent, respectively. Spain received **.** percent, while France, China, Greece and Poland imported smaller shares, varying between *.** percent and *.** percent. The "Others" category accounted for **.**% of exports, indicating a fairly diverse distribution among other markets. Main destination countries for rum exports Italy, ****, in % UNComtrade

In ****, the United States dominated Italian rum imports, accounting for **.** percent of the total, showing a strong dependence on U.S. imports. Other major supplier countries ...

1.6 Inflation suffered by the sector

The distilled spirits sector in Italy has faced inflation by adopting various strategies to cope with rising costs and maintain competitiveness. Rising prices of raw materials, production and logistics have forced many companies to adjust the prices of their products upward. This price increase has been reflected both on store shelves and in bars, making alcoholic beverages more expensive for consumers. To counter this, some companies have sought to reduce operating and production costs by streamlining processes and adopting more efficient technologies. Reducing staff and seeking cheaper solutions have been other strategies deployed to contain expenses. Faced with an increasingly difficult domestic market, many distilleries focused on innovation, introducing new product lines or variants that could attract new market segments. Diversifying offerings became crucial, especially by launching lower-end products to reach a wider audience. Marketing and promotional activities played a key role in keeping consumers interested and retaining their loyalty. Targeted advertising campaigns, tasting events and special offers have become essential tools for companies in the industry. In addition, many producers have increased exports to international markets less affected by inflation, seeking to offset declining domestic sales with increased sales abroad. Despite the difficulties, the quality and craftsmanship of Italian products ...

2.1 Overview of demand

Between **** and ****, the average household expenditure item for distilled spirits in Italy showed a gradual increase. In ****, the average expenditure was *.** euros, decreasing slightly to *.** euros in **** and remaining stable in ****. Starting in ****, spending began to rise, reaching *.** euros and continuing to increase in **** to *.** euros. In ****, it rose to *.** euros, marking an overall increase of ** percent compared to ****.

Average household expenditure item for distilled spirits Italy, ****-****, in current &euro Istat

Per capita spending has also steadily increased. In ****, it was €**.**, rising to €**.** in **** and €**.** in ****. In ****, spending reached **.** euros, continuing to rise to **.** euros in **** and **.** euros in ****. In ****, per capita spending reached **.** euros. This represents an overall increase of **.* percent from **** to ****. National per-capita spending on distilled spirits Italy, ****-****, in current &euro ReportLinker

Rum production in Italy, measured in millions of liters of pure alcohol, showed a significant increase between **** and ****. Starting from *.** million liters in ****, production nearly quadrupled, reaching **.* million liters in ****. The greatest period of growth was between **** and ****, when production increased from **.** to **.** million liters. After a slight decline in ****, production remained stable in **** and then peaked again in ****. This trend reflects a significant expansion of production capacity and demand for rum in Italy. Realized ...

2.2 Geographical distribution of demand

In ****, the average monthly household expenditure on distilled spirits in Italy shows significant variations geographically. Households in the Northeast and Northwest record the highest expenditure, with *.** euros each. In the Center, the average expenditure falls to *.** euros, while in the regions of the South and Islands it stands at *.** euros. These data indicate a greater propensity to spend on distilled spirits in northern regions than in central and southern regions.

2.3 Demand drivers

In ****, the consumption of bitters among people aged ** years and older in Italy varies significantly among different age groups. Data in thousands indicate that the **-** age group has the largest number of consumers, with *,*** people. This is followed by the age groups **-** years (***) have the lowest percentages of consumption.

People aged ** and older who consume bitters Italy, ****, in thousands, per *** people with the same characteristics Istat

In ****, liquor consumption in Italy among people aged ** years and older varies widely across age groups. Data in thousands show that the **-** age group has the largest number of consumers, with *,*** people, followed by the **-** age group (***) show the lowest percentages of consumption. People aged ** and older who consume liquor Italy, ****, in thousands, per *** people with the same characteristics Istat

In ****, the national breakdown of beverage spending in Italy shows a relatively balanced distribution among different categories. Water accounts for ** percent of total spending, followed by wine and soft drinks, both at ** percent. Beer makes up ** percent of spending, while other alcoholic beverages account for ** percent. Sparkling wines have the lowest share, at * percent. These data indicate that Italians distribute their beverage spending among water, wine, and soft drinks almost evenly, ...

2.4 Trends in rum demand

The trend of online rum searches in Italy between August **** and August **** shows an overall stable trend with some significant fluctuations during holiday periods. From August **** to August ****, the index increased by *.* percent, from **.* to **.*. A notable peak is observed in December **** (***), probably due to the interest in rum during the holiday season. However, in the months following these peaks, the index tends to decline, returning to values similar to the initial ones.

The numbers represent search interest relative to the highest point on the graph in relation to the region and period indicated. A value of *** indicates the highest frequency of search for the term; ** indicates half as many searches. A score of *, on the other hand, indicates that not enough data were found for the term.

Trend of online rum searches Italy, ****-****, index Google Trends, Businesscoot elaboration

Online searches for rum in Italy show a geographic distribution with a strong concentration in the regions of the South and Islands. Basilicata records the highest interest with an index of ***, followed by Puglia (***) show relatively less interest. This distribution suggests that rum is particularly popular in Southern Italy, with lower interest in the North, despite a significant presence in regions ...

2.5 New trends in demand

The rum market is undergoing a significant transformation, driven by a number of new trends that are redefining global demand for this distilled spirit. These trends indicate that the rum market is in a dynamic phase of evolution, with a promising future fueled by innovation, quality and increased awareness among consumers.

*. Premiumization and Super-Premiumization

High-end growth: There is a growing demand for premium and super-premium rums. Consumers are willing to spend more for high-quality bottles, often produced in limited editions and with a focus on provenance and production technique. These rums are often aged for long periods, offering a more complex and refined flavor. Provenance and terroir: As has been the case with wine and whiskey, rum consumers are becoming increasingly interested in the provenance of the product. Distilleries that highlight the unique characteristics of their regions (***) are gaining popularity.

*. Sustainability and Ethical Practices

Demand for sustainable products: Consumers are increasingly aware of the environmental impact of their purchases. This has led to an increased demand for rum produced with sustainable practices, such as using renewable energy, reducing carbon emissions, and adopting environmentally friendly farming techniques. Ethical certifications: Transparency in production practices has become crucial. Certifications such as "Fair ...

3.1 Structure and dynamics of the Italian market

Between **** and ****, the number of enterprises active in distillation, rectification and blending of spirits in Italy showed steady growth. In ****, there were *** active enterprises, increasing to *** in **** and *** in ****. In ****, the number increased to ***, continuing to grow to *** in **** and reaching *** enterprises in ****. This represents an overall increase of **.* percent in six years. The steady growth suggests an expanding sector, with new enterprises entering the market and contributing to the development of the spirits industry in Italy.

Number of enterprises active in distillation, rectification and blending of spirits [***] Italy, ****-****, in number Istat

In ****, most enterprises active in alcohol distillation, rectification and blending in Italy were limited liability companies, accounting for **.** percent of the total. Sole proprietors, freelancers and the self-employed made up **.** percent, while limited partnerships and general partnerships accounted for **.** percent and *.** percent, respectively. Joint stock and limited partnerships accounted for *.** percent, and other business forms made up only *.** percent. These figures indicate a prevalence of more formal and organized business structures, such as limited liability companies, in the distillation sector in Italy, while less structured legal forms, such as sole proprietors, are still significantly represented. Legal form of enterprises active in distillation, rectification and blending of spirits Italy, ...

3.2 Value chain

*. Acquisition of raw materials:

At this stage, the necessary raw materials are selected and collected, mainly sugarcane or its derivatives such as molasses. The quality of the raw materials is crucial to the final quality of the rum.

*. Processing and Fermentation:

Raw materials are processed to extract the sugars, which are then fermented with the help of yeast. During fermentation, the sugars are transformed into alcohol.

*. Distillation:

The fermented liquid is distilled to separate the alcohol from the rest of the must. Distillation can take place in copper stills or in distillation columns, affecting the flavor and purity of the rum.

*. Aging and Maturation (***):

At this stage, the rum is left to mature in wooden barrels, often oak. This process can last from a few months to several years, giving the rum complex aromas and character.

*. Blending and Finishing:

Aged rums can be blended to create a uniform and harmonious final product. Some rums may undergo additional treatments, such as aging in barrels that have previously contained other spirits, to enrich their flavor profile.

*. Bottling and Packaging:

Once the rum has achieved the desired flavor, it is bottled and packaged for distribution. This stage also includes ...

3.3 Distribution channels

In ****, in Italy, alcohol sales by value in large-scale retail trade (***) were dominated by distilled spirits and brandies, accounting for **.* percent of the total. This was followed by sweet liqueurs with **.* percent, alcoholic aperitifs with **.* percent, and finally bitters with **.* percent. This indicates a clear dominance of distilled spirits and brandies over other categories of alcoholic beverages, highlighting a consumer preference for these products.

Breakdown of categories in total value sales in the large-scale retail trade Italy, ****, in % Federvini

Between **** and ****, value sales in Italy's large-scale retail trade showed growth for alcoholic aperitifs (***). Sales trends by category in the large-scale retail trade Italy, ****-****, in % Federvini

3.4 The main players in the market

The main Italian distribution and production companies are as follows:

Pernod Ricard: is a French multinational company founded in ****, a leader in the alcoholic beverage sector. In the rum market, it owns the famous Havana Club brand, one of the world's best-known Cuban rums, produced in the Cuban tradition. The company is known for its portfolio of premium brands, global distribution, and strong commitment to sustainability and responsible consumption.

Diageo: British multinational, a world leader in the production of alcoholic beverages. Founded in ****, it has an extensive portfolio of rum and other spirits brands. In the rum sector, it has prominent brands such as Captain Morgan, one of the world's best-selling rums, and Zacapa, a premium Guatemalan rum prized for its quality and aging process.

Velier: This is an Italian company founded in ****, initially as an importer of spirits and wines, which over time has become famous for selecting and distributing rare and high-quality rums. Over the years it has acquired a worldwide reputation for its focus on rum tradition and authenticity, collaborating with historic and artisanal distilleries to bottle limited editions. Among the most celebrated brands and series selected are the Caribbean rums Habitation Velier, Caroni (***). The company is recognized ...

4.1 Supply analysis

The rum market is rich and diverse, with a wide range of offerings that reflect the diversity of production traditions, raw materials used, aging techniques, and consumer preferences. These types of rums reflect the wide range of offerings available in the market, each with unique characteristics that suit different preferences and consumption occasions. Differences in production methods, choice of raw materials and aging contribute to a varied and fascinating world.

4.2 The price analysis

The Consumer Price Index for spirits in Italy shows an upward trend between July **** and July ****. Starting from a value of ***.* in July ****, the index reaches ***.* in July ****, marking a *.* percent increase in two years. In detail, the index rose relatively steadily until November ****, followed by a brief decrease in December of the same year. From January **** onward, the index resumed its upward trend, with some minor fluctuations but generally remaining above **** levels. Despite a slight decline at the beginning of ****, the index ended the period analyzed higher than in previous months, suggesting continued inflationary pressure on super spirits.

Consumer price index of spirits [***] for the whole community (***) - monthly data Italy, ****-****, index Istat

The Consumer Price Index for spirits in Italy shows a significant increase between **** and ****. Starting from ***.* in ****, the index rises to ***.* in ****, marking an overall increase of **.* percent in eight years. The trend was relatively stable between **** and ****, with a moderate increase of * percent during this period. However, a sharper acceleration is observed from **** to ****, with a *.* percent increase in the last year alone.

Consumer price index of spirits [***] for the whole community (***) - annual averages Italy, ****-****, index Istat

A proxy for rum pricing can ...

4.3 New supply trends

The rum market has been undergoing significant evolution in recent years, driven by increasing demand for premium products, innovation in production techniques, and increased consumer awareness of various rum styles and origins. Here is a detailed description of the main trends that are shaping the supply of rum in ****:

*. Premiumization and Luxury

One of the most obvious trends is theincrease in demand for premium and super-premium rums. Consumers are increasingly willing to pay high prices for high-quality rums, often produced in limited editions or by artisanal methods. This phenomenon parallels that already observed in the whiskey and gin sectors. Brands are launching rums aged for long periods, often over ** to ** years, that are positioned as luxury products. These premium rums are often sold with sophisticated packaging, such as designer bottles and elegant cases, to reinforce the perception of exclusivity.

*. Regional Diversification and Traditional Styles

Producers are focusing onbroad regional diversification, promoting rums according to their geographical origins and traditional production methods. Controlled designations of origin (***). Discerning consumers are interested in exploring these differences and learning more about the various styles.

*. Innovation in Aging Techniques

Experimentation with aging methods is another key trend. More and more distilleries are adopting ...

5.1 Rum regulation

In Italy, the production and distribution of rum is regulated by a series of regulations that combine national and European laws, setting strict standards to ensure product quality and consumer safety. The starting point for the regulation of rum is Regulation (***) No. ****/*** of the European Parliament and of the Council of April **, ****, which establishes general rules for the definition, description, presentation and labeling of spirit drinks. This regulation specifies that rum must be produced exclusively by fermentation and distillation of sugarcane juice or molasses, and must have a minimum alcohol content of **.* percent. This means that the product must maintain the organoleptic characteristics of the sugarcane, with the addition of caramel allowed only to equalize the color and never to alter the flavor.

Regarding production, regulations state that rum must be distilled to a maximum of ** percent alcohol by volume to maintain the aromas of the raw material. Aging, if stated on the label, must take place in wooden barrels, and the age stated must correspond to the youngest rum in the blend, in accordance with the traditions of European regulations.

Italian and EU regulations also require that the labeling of rum comply with precise rules, as stipulated in Regulation (***) No. ...

6.1 Market segmentation

• Pernod Ricard
• Diageo
• Velier
• Rossi & Rossi
• Compagnia dei Caraibi
• Moon Import
• Bacardi Limited
• Destillerìa Serrallés
• Appleton Estate (Campari)
• Mount Gay Rum