The Latin America Rum market was valued at USD 2,225 million in 2021 and is projected to reach USD 3,258 million by 2031, registering a CAGR of 3.6% during the forecast period (2022-2031).
Rum is the second most popular spirit after whiskey, and consumers are growing interested in flavor profiles other than dark and golden rums. Flavored rums are also frequently utilized to create cocktails, shakers, and drink mixes. Until a few decades ago, the therapeutic benefits of Rum did not save the lives of troops and soldiers in battle. Totorum was used to keep soldiers healthy during World War I. Rum can make bones denser. In this way, eating in moderation helps lessen arthritic symptoms and prevent osteoporosis. Rum helps lower bad cholesterol or LDL cholesterol, keeping the arteries from clogging, which can help avoid heart attacks and heart disease. One of the first alcoholic beverages is Rum. Traditional rum drinkers seek out premium rum items with distinctive flavor profiles.
Rum is just one example of the high-end goods that people in the area increasingly seek as they become more prosperous. Several things influence this tendency. For instance, craft cocktails and mixology's rise in popularity presents premium rum producers with new business options as customers and bartenders look for distinctive and premium components. Additionally, the region's distinctive rum culture is becoming more widely known to tourists, boosting demand for high-end goods domestically and internationally.
Zacapa is one of the premium rum brands with rapid expansion in the market. This Guatemalan Rum utilizes a special aging procedure that combines different barrel types and high-altitude aging to generate a unique flavor profile that rum connoisseurs respect. As a result of Zacapa's effective positioning as a luxury product, its sales have increased dramatically in recent years.
Auto accidents may negatively impact the market's expansion. Accidents might harm or even death, undermining consumer confidence and lowering demand for alcoholic beverages. For instance, Brazil was one of the world's deadliest countries for traffic accidents in 2019, with over 30,000 fatalities. Even though not every accident is directly caused by drinking, drunk driving is a significant contributing factor. Furthermore, certain Latin American nations have established tighter laws against drinking and driving. For instance, drivers in Mexico may be subject to heavy penalties and even incarceration if their blood alcohol percentage is beyond a specific level. These laws aim to lessen drunk driving and increase traffic safety, but they may also harm the demand for alcoholic drinks like Rum.
Consumers in remote or disadvantaged locations now have better access to a greater choice of rum goods thanks to e-commerce platforms. E-commerce has emerged as a crucial tool for reaching customers who would not have access to physical stores in nations like Brazil and Colombia, which have sizable rural populations. For instance, one of the biggest alcohol businesses in the world, Diageo, revealed that rising demand for premium spirits in Brazil led to an increase of over 100% in its e-commerce sales there in 2020. Consumers are increasingly turning to Internet shopping as a safer and more practical means of purchasing due to the COVID-19 pandemic. E-commerce platforms have allowed customers to buy rum products without leaving the comfort of their homes or going to actual stores. As a result, the Latin American rum market has grown, especially in nations like Chile and Argentina, where e-commerce sales have increased significantly in recent years.
The Latin American rum market is segmented based on Type, sales channel, and region.
The Type is further segmented into white Rum, dark and gold Rum, spiced, and others.
The Dark and gold Rum dominated the market and is expected to register a CAGR of 3.2% over the forecast period.
Based on sales channels, the market is sub-segmented into Hypermarkets and supermarkets, specialty stores, online retail, and others.
Specialty stores are expected to dominate the market, registering the highest CAGR of 3.4% over the forecast period.
Latin America is segmented by region into Brazil, Argentina, and the rest of Latin America. Brazil dominated the market and is expected to grow at a CAGR of 3.0% during the forecast period.
Brazil and Argentina drive regional market growth. Brazil is a major alcohol consumer. In 2016, Brazil's alcohol industry earned USD 33.79 billion in net revenue, up 109.48% from 2010. Luxury spirits, especially premium Rum, have increased alcohol consumption in South America. Market merchants are working on local distribution. In July 2019, Suntory Holdings Ltd.'s Beam Suntory commenced Brazilian distribution. Suntory and Bacardi, two other local rum brands, are also well-known. Due to rising rum demand and vendor presence, rum sales will rise during the forecast timeframe.
South American Rum will encounter several challenges. Alcohol contributes to car accidents in Argentina. Thus, some automakers promote non-alcoholic drinks. Volkswagen Beer debuted in Buenos Aires, Argentina, in May 2018. This non-alcoholic drink was created to reduce drunk driving nationwide. Such ads may diminish the nation's alcohol use and rum sales during the expected period. Alcohol ingestion causes excitement, unconsciousness, and lowered inhibitions. The Panamanian government implemented the Spring Break Laws in March 2018 to reduce beach partying and underage drinking. These rules will hurt the South American rum market.
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