Florida Leads U.S. Rum Market Toward Premiumisation

Florida has emerged as a key state driving the premiumisation of rum in the United States, according to new data from IWSR US Navigator, which tracks trends in the beverage alcohol market. While rum has generally faced declining volumes across the country, Florida stands out for its impressive shift towards higher-quality rum products.

The report details that rum experienced only modest growth during the pandemic, with volume increases of 4% from 2019 to 2020 and 2% from 2020 to 2021. This uptick was smaller compared to the overall spirits market, which saw 5% growth in both years. Since 2022, rum sales have mostly declined, with flavored rum—making up 43% of total rum volumes in the U.S.—facing the steepest losses.

Eight states account for half of the nation's rum consumption, with Florida leading as the largest market. Florida's share of total rum consumption rose from 12% in 2019 to 15% in 2024. Following Florida are New York at 8%, California at 7%, Texas at 6%, and Pennsylvania, Michigan, Illinois, and Wisconsin each at 4%. Nonetheless, all these major markets have suffered volume drops since rum peaked in 2021. Florida's decline was relatively moderate at 3%, while New York saw a 1% dip and California a substantial 7% decrease. Several states, including New Jersey, Massachusetts, and Georgia, experienced even larger declines, reaching up to 8%.

Despite this overall contraction, the trend of premiumisation—consumers shifting from cheaper to higher-quality options—has remained strong. In Florida, the Standard price tier for rum grew dramatically from a 15% market share in 2019 to 43% in 2024, while the Value segment shrank from 80% to 51%. New York saw different dynamics, with the Premium-and-above segment expanding from 7% to 12% of the market, the largest growth in premium rum among the top states.

Premiumisation across rum segments shows that while rum is moving upscale, the shift is still concentrated at lower price tiers. Between 2019 and 2024, the Value tier's share dropped from 52% to 42%, while Standard rose from 42% to 51%. The Premium-and-above category edged up slightly, from 6% to 7%. Dark rum is an exception, seeing more robust gains; its Premium-and-above segment climbed from 11% to 17% market share. However, white and flavored rum have failed to upscale significantly, with Premium-and-above languishing at just 4%.

According to Marten Lodewijks, President of IWSR's US Division, a major challenge for rum is the lack of a unified production standard, which complicates efforts to build a clear quality hierarchy. He also noted that premium rums remain relatively affordable compared to high-end whiskies and tequilas, presenting a strategic opportunity for brands. Despite frequent launches of new variants, the absence of entirely new rum brands has hindered consumer excitement, especially compared to booming categories like tequila and American whiskey.

Lodewijks suggests that the rum category could benefit from an increased focus on ready-to-drink (RTD) products, which are gaining popularity. Innovations like Captain Morgan's collaboration with Vita Coco, which pairs rum with coconut water, may be a way to reignite interest in rum and cater to evolving consumer preferences.