Diageo has added the Philippines rum brand Don Papa to its stable, where it will sit between Zacapa and Captain Morgan.
The transaction comes as the “super-premium-plus” end of the rum category displays “early stages of premiumisation”, the group said in today’s announcement. Don Papa’s core expression is available in 30 markets, the largest being France, Germany and Italy where it carries an SRP of EUR40 [US$43] per 70cl bottle.
Speaking to Global Drinks Intel, a Diageo spokesperson noted that Don Papa is priced below Guatemalan brand Zacapa [EUR48] and above Captain Morgan [“US$30.60 per litre for Europe”] in the company’s rum portfolio. The 13-year-old brand, distilled on the island of Negros Occidental and matured in American oak barrels, carries a similar price point to Diageo’s Ron Santiago de Cuba [EUR41] but is more expensive than Venezuelan rums Cacique [EUR25] and Pampero [EUR30].
The group will pay EUR260m [US$281.6m] for Don Papa, with up to EUR177.5m to follow, based on performance between now and 2028. The acquisition follows Brown-Forman’s purchase, for an undisclosed sum, of Venezuela’s Diplomático Rum three months ago.
“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,” said group president for Europe & India, John Kennedy, who is set to leave Diageo later this year.
The premiumisation opportunity for aged rum is particularly prevalent in the Global Travel Retail channel. Speaking to Global Drinks Intel in October, Diplomático's global marketing director, Edouard Beaslay, said: “The category, particularly the premium and super-premium segments, are still underrepresented in GTR.”
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