UK-based Diageo is acquiring Philippine premium rum brand, Don Papa as it plans to introduce rum as a ‘super-premium’ liquor alongside its whiskey and tequila.
The acquisition of Don Papa cost Diageo US$280 million and it is optimistic of the brand growth potential, as demand for expensive spirits will remain robust despite a slowing global economy.
Don Papa will join Diageo’s 200-brand portfolio, including household names such as Johnnie Walker, Tanqueray, Smirnoff, and Baileys. Before the acquisition, Diageo only carried one rum brand, the mass-market product Captain Morgan.
Diageo is gearing up for the growth of high-end rum in global markets. The rum category is in the early stages of premiumization as people are becoming more willing to pay more for a quality product, citing a CAGR of 18% in Europe and 27% in the US between 2016-2021.
Don Papa consistently outperformed the market in Europe delivering 29% CAGR. Don Papa is currently being sold in 30 countries with France, Germany and Italy being its largest markets.
