Don Papa bought by Diageo
Last week Diageo announced the purchase of Don Papa rum. The total price is between 260 and 437.5 mln USD (260 mln USD upfront payment and up to 177.5 mln USD based on the market performance of the brand until 2028).
Diageo is one of the biggest players in the spirit world. Its portfolio includes one of the most popular brands, like Johnnie Walker, Bell’s and J&B whisky, Smirnoff vodka, Hennessy cognac, Guinness beer, Dom Pérignon champagne and Gordon’s and Tanqueray gin, just to mention a few. At some point, they were even the owners of the Burger King. Diageo owns Captain Morgan, Zacapa, Bundaberg, Pampero, Cacique and Botran. Clearly, the company controls several of the mainstream rum brands.
Let’s talk a little bit about Don Papa. Even though it is a relatively young rum brand, it quickly gained popularity. Their basic “Small Batch” (up-to-)7-years-old rum is the 9th most rated rum in RumRatings (RR) (922 ratings) and has 529 reviews on RumX (RX). Although it has so many ratings, it earns only 5.6/10 at RR and 70/100 at RX. The negative reviews usually complain about the heavy sugaring and other additives.
Actually, a certain study shows that Don Papa is not only heavily sugared but also contains glycerol and vanillin. The brand was even sued in the USA for not disclosing these additives in the label (like a spiced rum should) and dishonestly claiming to be a non-spiced rum. The same study shows that some other Diageo brands (Zacapa, Botran and Pampero) also contain post-distillation additives.
Diageo states that they consider Don Papa as the super-premium rum (though this definition is based only on price, according to International Wine and Spirit Competition, the super-premium spirits cost between 30 – 45 USD and the premium spirits cost 22.5 – 30 USD). They also add that “The super-premium plus segment (45+ USD per bottle) of the rum category is in the early stages of premiumization”. The majority of Diageo rum brands are cheaper than Don Papa. Recently, the sales of the cheaper rums have fallen and the clients tend to switch to the more expensive ones. From this perspective, Don Papa fills a hole in the offer of Diageo.
The purchase of Zacapa Ron shares by Diageo in 2011 caused the quality deterioration of the brand and we still can see people seeking “pre-Diageo Zacapa” on rum forums and auctions. It’s doubtful the same will happen to Don Papa, considering its current ratings. We may, however, expect new and more fancy marketing campaigns and an even higher shop presence in the future.
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