Diageo has acquired Don Papa Rum, a super-premium, dark rum from Negros Occidental (known locally as ‘Sugarlandia’), Philippines. The upfront consideration is $281 million (€260 million) with a further potential consideration of up to $192 million (€177.5 million) through to 2028 subject to performance, reflecting the brand’s current growth potential.
The super-premium plus segment of the rum category is in the early stages of premiumization, 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 by entrepreneur Stephen Carroll, together with Andrew John Garcia, Don Papa Rum is currently available in 30 countries, with France, Germany and Italy being its largest markets. Don Papa Rum has a unique flavor profile, highly distinctive packaging and an authentic brand story rooted in the beautiful island of Negros Occidental. 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, commented: “We are excited by the opportunity to bring Don Papa into the Diageo portfolio to complement our existing rums [Captain Morgan]. 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.”
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“Diageo has a strong track record in nurturing founder-led brands,” said Don Papa Rum Founder Stephen Carroll. “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, working alongside Diageo to build on Don Papa Rum’s growth potential.
The acquisition will be funded through existing cash reserves and is expected to close in the first half of 2023. The company will be available to discuss the transaction in more detail after the release of Diageo’s fiscal 23 interim results on 26 January 2023.
Diageo is a global leader in beverage alcohol with an outstanding collection of brands including Johnnie Walker, Crown Royal and JεB whiskies, Smirnoff, Cîroc and Ketel One vodkas, Captain Morgan, Baileys, Don Julio, Tanqueray and Guinness. Diageo products are sold in more than 180 countries around the world.
The namesake of Don Papa Rum is inspired by the unsung hero and mystic, Papa Isio, who was one of the leading figures of the late 19th century Philippine revolution. Initially a foreman at a sugar plantation, his leadership and courage played a critical part in liberating the island of Negros from Spanish rule. Don Papa is inspired by his legend and captures his spirit and sense of magic in every bottle.