The third – rum – Newspaper Kommersant No. 23 (7468) dated 02/08/2023

Spirits producers are looking for new niches as popular whiskey and gin categories are saturated with local brands. So, a major vodka producer Tula Distillery 1911 launches bottling of rum from Dominican distillates. The Siberian Alcohol Group and Rust Group also plan to enter the category. There are many suppliers of rum spirits, but their quality varies greatly, and the demand for the drink is still growing at a slow pace.

A major vodka producer, the Tula Distillery 1911, is launching the production of rum from aged distillates supplied from the Dominican Republic, the company told Kommersant. The drink will be bottled under the Cristoforo and John Silver brands. The line includes white, gold and dark rum aged from one to four years, as well as a drink based on rum and coconut with a strength of 21%. This year it is planned to produce about 1 million liters of rum, the estimated retail price is 650–850 rubles. for a bottle of 0.5 liters, they say in the company.

According to the data of market participants available to Kommersant, in 2022 the Tula Distillery 1911 increased the bottling of vodka by 41%, to 2.93 million deciliters year on year, ranking eighth in terms of volume in the category. The portfolio of vodka brands includes the brands Prazdnichnaya, Medved, Starley, the plant also produces Noble Stag whiskey, Beatly gin, etc.

Russian producers of strong alcohol are actively expanding their range in the face of reduced imports of alcohol after the outbreak of hostilities in Ukraine. NielsenIQ estimates that 36 new local whiskey brands, 20 local gin brands and 13 liquor brands entered the market in the nine months of 2022. As noted by market participants, competition in some segments is already high. In addition, Kommersant’s interlocutors say that due to the high demand for whiskey in the world, it is very difficult to purchase a sufficient volume of high-quality spirits for a drink. At the Tula distillery 1911 they say that the demand for rum in the world is also high and long-term contracts and planning for three to five years in advance are needed to ensure the production of high-quality distillates.

The Beluga Group (produces rum under the Devil’s Island brand) says that the main supplier of spirits is the Dominican Barcelo and the logistics are working properly. According to the representative of the group, the category of Roma in the Russian Federation is already quite large and it will continue to grow.

Ladoga Development Director Dmitry Isachenkov says that the company launched Armator rum in the fall of 2022 and plans to expand the range in the category. “The potential is high even after the departure of one of the market leaders,” he points out. In 2022, British Diageo, whose portfolio includes Captain Morgan rum, announced a reduction in work in Russia.

The Alcoholic Siberian Group plans to release its rum this year from imported Caribbean spirits. Rust Group says it is in talks with several Caribbean rum suppliers and is also developing its own premium brand in the category, which it plans to launch by the end of 2023. The current volume of the Russian rum market in the group is estimated at 11.7 million liters. According to NielsenIQ, in 2022 rum sales in Russia grew by 1.7% in volume and by 10% in value year-on-year. For comparison: gin sales in physical terms over this period increased by 41%, whiskey sales decreased by 6.6% year-on-year.

Alexander Stavtsev, head of the WineRetail information center, says that rum may be the second most promising category on the alcohol market after gin. According to him, the drink is produced by a large number of producing countries – all of Latin America, India, etc. But the raw palette can vary greatly in quality, the expert points out. As Mr. Stavtsev points out, development in the category largely depends on the logistical capabilities of the manufacturer and the choice of distillate supplier.

KVK General Director Viktor Zlotnitsky says that the company is also preparing to launch the production of rum to expand the range, but sees the development of the Koktebel cognac and gin brands as a priority in the short term. The rum category is not growing very dynamically, and for successful competition, a strong brand is also needed here, he notes.

Anatoly Kostyrev