A revolution that few talk about is taking place in the world: that of rum.
Little by little, but without stopping, the world consumption of rum is increasing in all its presentations, with premium rum as the standard bearer of growth.
According to a report by the International Wine and Spirits Record (IWSR), global rum sales rose 4.3 percent to reach a record 44.7 million nine-litre cases. The data is from 2018 and everything indicates that it continued to increase with the pandemic.
And a fact: sales of premium rum rose four times more: 17.2 percent.
Spirits giant Diageo is at the forefront of the rum revolution. The company has invested heavily in premium rum brands such as Zacapa and Don Julio, brands that have experienced unprecedented sales growth in recent years. In 2018 alone, Diageo reported a 7.5 percent increase in net sales of its premium rum brands, to a total of $3.3 billion.
Diageo is also looking to expand its presence in the rum market through strategic acquisitions. The company acquired legendary Jamaican rum producer J. Wray & Nephew, which is the maker of the popular Appleton Estate rum, and is now going for Don Papa, a premium Filipino rum that landed in Mexico in 2022.
As announced on Tuesday, January 17, Diageo has agreed to buy Don Papa Rum, a high-end dark rum from the Philippines, in a deal worth nearly $475 million.
The company that owns Johnnie Walker whiskey and Tanqueray gin will pay $280 million upfront for Don Papa, with additional up to $195 million through 2028 subject to results.
What Diaego does has an explanation, he says wsjcompanies in the alcohol industry are looking to increase their exposure to high-end products as consumers are willing to pay for more expensive alcoholic beverages.
The trend accelerated during the pandemic, boosting sales of scotch, bourbon and tequila, although some more recent data points to a gradual slowdown in growth due to inflation and the economic problems of families.
It’s a statement, Diageo said Don Papa falls into the “superpremium plus” rum category.
The company expanded by saying that the segment is in the early stages of “premiumization,” with a compound annual growth rate of 18 percent in Europe and 27 percent in the United States between 2016 and 2021.
In the same period, Don Papa’s sales growth outpaced the European market, with an annual rate of 29 percent.
Don Papa was born in the Philippines in 2012 and is already sold in 30 countries, including Mexico. France, Germany and Italy are its main markets.
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