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The rum category is experiencing a remarkable evolution, shedding its traditional image to emerge as a modern, sophisticated and luxurious offering. New-age rum brands are driving premiumisation through refined production techniques, innovative flavour profiles, and unique ageing processes, appealing to an audience that values craftsmanship and authenticity. In this context, Diageo India has taken a remarkable step forward with its new offerings, says Ruchira Jaitly, Chief Marketing Officer, Diageo India.
In India, the rum category is predominantly driven by the popular or value segment, which accounts for over 90 percent of sales. However, the sector is beginning to witness an exciting shift towards premiumisation. This trend, although in its early stages, reflects evolving consumer preferences, particularly with younger, urban audiences seeking differentiated and sophisticated beverage options. At the same time, these consumers maintain a strong connection to rum’s legacy as a beverage of choice in India. This shift highlights the significant potential for growth in the premium rum segment.
As such, Diageo India’s outlook on shaping premiumisation in the segment remains the steadfast. That said, unlike whisky, where the codes of premiumisation are well-established, rum faces unique challenges in creating clear benchmarks for premium offerings. “To address this, we are leveraging our expertise and consumer insights to craft compelling brand stories, innovate with new and premium blends, and elevate the drinking experience through premium packaging, craftsmanship and heritage,” explains Ruchira.
Evolving Portfolio
Through its portfolio, Diageo India wants to create new moments of celebration and connection, positioning rum as a versatile spirit that seamlessly fits into modern lifestyles, while honouring its rich legacy. This approach aligns with the brand’s commitment to innovation and expansion of the rum category.
In terms of performance, Diageo India continues to be a leading player in the category, with McDowell’s Celebration Rum dominating the value segment. The brand has established a robust presence across key markets, particularly in regions with a high demand for value-driven offerings. “Our strategy focuses on select markets that deliver profitability while aligning with consumer demand,” Ruchira states.
To cater to the evolving tastes of Indian consumers, the company launched two new propositions just ahead of the festive season: X Series by McDowell’s and Co., featuring a vibrant citron rum and a rich dark rum and Captain Morgan Original Spiced Gold Rum. These launches mark a significant transformation on rum propositions in market, given the price points and liquid innovation, particularly with McDowell’s and Co.
With a diverse portfolio and a strong distribution network, Diageo India is reimagining the way rum is perceived and consumed in India. This allows it to capitalise on growth opportunities in the premiumisation of the category while maintaining its leadership in the value segment. And as Ruchira elaborates, younger consumers are playing a pivotal role in reshaping the rum category. Millennials and Gen Z are driving the demand for modern, elevated drinking experiences, influenced by evolving social trends, rising affluence, and a post-pandemic desire for vibrant social connections and celebrations. “Their preferences are steering a shift towards diverse and premiumised offerings, with cocktail culture and repertoire drinking gaining strong momentum,” Ruchira notes.
McDowell’s and Co., a legendary 125-year-old powerhouse, is responding to this shift with the X Series, tailored to meet the aspirations of experimental consumers. X Series redefines fun and experimentation with honest ingredients, unique blends and vibrant packaging. This range is crafted to elevate mixability, driving inventive cocktails and new ways of celebrating.
India’s Rum landscape
The rum category in India remains robust, anchored by the widespread popularity of traditional dark rum across diverse age groups. However, evolving consumer preferences are signalling a shift. Younger consumers are increasingly embracing mixability and experimentation—areas where traditional dark rums have historically fallen short, says Ruchira Jaitly. This creates a compelling opportunity to reimagine and modernise rum for contemporary consumers, broadening its appeal for a wider range of social and celebratory occasions.
In contrast, lighter and more versatile rums have emerged as a growth driver, leveraging the cocktail trends, and feeding into the larger desire for experimentation and premium experiences. Their aspirational appeal aligns well with the rising desire for refined and innovative drinking experiences, particularly among millennials and Gen Z, who are also eager to explore new liquids and serves. According to Ruchira, the cocktail culture and increasing repertoire consumption are propelling rum back into the spotlight, showcasing its potential to shine in the evolving alcohol landscape.
Colour Code
In India, dark rum dominates the category, accounting for over 90 percent of the market by volume. This preference, Ruchira says, can be attributed to the traditional affinity for rich, robust flavours that dark rum offers, resonating deeply with the Indian palate. Dark rum’s versatility, both as a standalone drink and in cocktails, further enhances its appeal in a market where heritage and depth often take precedence.
“While white rum has carved a niche in urban centres, driven by cocktail culture and a younger, more experimental consumer base, its market share remains relatively small,” she adds. As the rum category continues to premiumise, there is potential for white rum to grow, particularly among younger, urban, consumers seeking lighter and more versatile options.
Overcoming Obstacles
Balancing profitability and delivering premium liquid experiences at scale is a challenge, particularly because the majority of consumers in this segment are price-sensitive, making premiumisation a gradual and resource-intensive process. Additionally, India’s regulatory landscape is marked by state- specific complexities in licensing, pricing and taxation, which slow the rollout of premium propositions across markets. “These variations along with ensuring compliance and optimising market access, add to the complexity,” Ruchira says.
From a consumer standpoint, the established familiarity with traditional rums often sets a high bar for acceptance of new innovations.
While this highlights the strength of dark rum in India, it also underscores the need for robust consumer education to drive awareness and encourage trials of new premium offerings. This is particularly true for Captain Morgan, one of the bestselling rums in the world. “Our opportunity on Captain Morgan Original Spiced Gold Rum shall be around building narratives regarding premium liquid experiences, mixability, and new ways to enjoy the brand. We believe these new propositions will attract younger, more experimental, and globally savvy consumers,” Ruchira elaborates.
Enhancing Business Ecosystem
Creating a conducive business environment for the rum category in India requires a holistic approach that recognises its integral connection to the broader alcoholic beverages sector. Ruchira puts forward some suggestions to achieve this. First and foremost, there is a need for simplified and uniform regulations. The fragmented regulatory framework across states often hampers seamless operations. Establishing a more unified and predictable regime for licensing, taxation and pricing would encourage investment and innovation in the rum segment while ensuring fair competition.
Secondly, taxation policies must be rationalised. “Addressing the disparities in excise duty structures can help create a level playing field for all categories in this industry. A balanced tax policy would enable rum producers to focus on delivering high-quality, consumer- centric offerings without excessive financial strain,” explains Ruchira. Additionally, supporting innovation through incentives for research and development and new product development can further promote premiumisation within the category. Innovations like the X Series and Captain Morgan Original Spiced Gold Rum demonstrate the potential for modern, consumer-focused products to drive growth and expand consumer repertoires.