Diageo has reached an agreement to acquire Don Papa Rum, a premium dark rum from the Philippines. The upfront consideration is €260m with a further potential payment of up to €177.5m through to 2028 subject to the brand’s performance.
The drinks giant noted that the super-premium plus segment of the rum category is in the early stages of premiumisation, with a compound annual growth rate (CAGR) of 18% in Europe and 27% in the US between 2016-2021. Through the same period, Don Papa Rum consistently outperformed the market in Europe, delivering a 29% CAGR.
Launched in 2012, Don Papa Rum is currently available in 30 countries, with France, Germany and Italy being its largest markets.
John Kennedy, President, Diageo Europe and India, said: “We are excited by the opportunity to bring Don Papa into the Diageo portfolio to complement our existing rums. This acquisition is in line with our strategy to acquire high-growth brands with attractive margins that support premiumisation, and enables us to participate in the fast-growing super-premium plus segment.”
Stephen Carroll, Founder, Don Papa Rum, commented: “Diageo has a strong track record in nurturing founder-led brands. They believe in our unique story and have genuinely embraced our brand idea. We believe this acquisition is a great opportunity to take Don Papa into the next exciting chapter of its development.”
