Launched in 2012 by entrepreneur Stephen Carroll and Andrew John Garcia, Don Papa Rum is currently available in 30 countries, counting France, Germany and Italy as its largest.
Spirits and beer giant Diageo will pay an upfront €260m for the brand with the possibility of additional performance related payments of up to €177.5m through to 2028.
Super-premium rum potential
Diageo identifies the super-premium plus segment of the rum category as one with attractive potential: with a compound annual growth rate (CAGR) of 18% in Europe and 27% in the US between 2016-2021.
Furthermore, Don Papa Rum consistently outperformed the market in Europe, delivering a 29% CAGR.
Don Papa Rum has a ‘unique flavor profile, highly distinctive packaging and an authentic brand story rooted in the beautiful island of Negros Occidental — known locally as ‘Sugarlandia’’.
The rum is distilled and aged on the island in American oak barrels. The combination of the local sugar cane and the oak barrel ageing in a hot tropical climate provides the foundation for Don Papa Rum’s ‘long, rich-textured finish, which carries flavors of vanilla, honey, and candied fruits’.
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 premiumization, and enables us to participate in the fast growing super-premium plus segment.”
Stephen Carroll, founder, Don Papa Rum, added: “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.”
Stephen Carroll will remain involved with the brand post-acquisition.
Diageo will fund the acquisition through existing cash reserves, with the acquisition expected to close in the first half of 2023.
