Diageo to acquire Don Papa Rum

Diageo is set to acquire Philippines' super-prem rum brand, Don Papa Rum, a super-premium, for AUD$401m with a further potential consideration of up to AUD$274m through to 2028 dependent on performance.

Crafted in the Philippines, Don Papa Rum is a super-premium, dark rum from the Philippines. It was launched in 2012 by former Rémy Cointreau executive Stephen Carroll with Andrew John Garcia.

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, “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 will remain involved with the brand, working alongside Diageo to build on Don Papa Rum’s growth potential.

Carroll said: “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.”

Don Papa Rum is made from sugar cane grown on the island of of Negros Occidental — known locally as ‘Sugarlandia’. The rum is distilled and aged on the island in American oak barrels. Don Papa says that the local sugar cane and the oak barrel ageing in a hot tropical climate result in a rum with a 'long, rich-textured finish, which carries flavours of vanilla, honey, and candied fruits'.

The news follows Brown Forman's acquisition of Diplomático Rum brand as the super-premium plus segment continues to grow with a compound annual growth rate (CAGR) of 18 per cent in Europe and 27 per cent in the US between 2016-2021. Diageo reports that through the same period, Don Papa Rum consistently outperformed the market in Europe, delivering a 29 per cent CAGR.

The acquisition will be funded through existing cash reserves and is expected to close in the first half of 2023.