Brown‑Forman will purchase the Diplomático Rum brand and related assets from Destillers United Group for an undisclosed amount, the Jack Daniel’s owner said in a statement.
Upon completion of the transaction, which is expected to occur within 90 days, Brown‑Forman will add the Diplomático Rum family of brands to its portfolio and acquire a production facility in Panama.
The purchase of Diplomático is the latest in a series of acquisitions by spirit companies to expand their premium offerings amid increased demand from consumers around the world.
Brown-Forman is best known for its portfolio of whiskey, tequila, vodka and other alcoholic beverages. It had been missing rum, a void to be filled by Diplomático, the first brand it’s owned in that space.
The Diplomático Rum family of brands is the No. 1 super- and ultra-premium rum and the No. 2 super-premium-plus rum worldwide, according to IWSR data cited by Brown-Forman. Super-premium-plus rum has grown at an annual rate of 17% during the past five years. Rum accounts for about 8% of global spirits, Brown-Forman noted.
Brown‑Forman’s CEO Lawson Whiting said Diplomático, known for its distinctive packaging, strong brand positioning and taste, will give his company “a market-leading entry into the fast-growing super-premium rum category.”
Diplomático has a broad global reach that Brown‑Forman could tap into to sell some of its other brands. Diplomático is sold in more than 100 countries, with France, Germany and the United States as its top markets.
Consumers have increasingly shown a fondness for premium brands and a willingness to pay more for them. The alcohol space has been no exception, prompting Brown-Forman, Constellation Brands, Diageo and others to expand their portfolios in this category to capture a portion of that growth.
Diageo bought 21Seeds, a rapidly growing flavored tequila infused with fruit juice, earlier this year. Constellation Brands’ venture capital unit acquired a minority stake in Dos Hombres, the artisanal mezcal brand created by “Breaking Bad” stars Bryan Cranston and Aaron Paul, in 2021. And Beam Suntory purchased the premium ready-to-drink cocktail brand On The Rocks in 2020.
The global premium spirits market is expected to surge to $235.74 billion by 2027, a compound annual growth rate of 10.3% from 2020, according to Grand View Research. The marketing data firm said that is led by the growing popularity of high-end drinks among millennials. Grand View noted growth in the high-end alcohol segment has been outpacing that of alcohol overall.