Diageo Strikes Again 🥃

GM and Happy Wednesday, folks. Here's a preview of what we're covering this morning: 

• Diageo buys a rum company 🥃

• Novak Djokovic invests seven-figures in Waterdrop 🥤

• Sazerac sues RNDC for $38.6m in unpaid invoices 💰

• Scotch Porter is one of the fastest-growing male grooming brands 📈

The Big Story

Global spirits firm Diageo agreed to acquire Don Papa, a super-premium, single-island rum brand from the Philippines. Diageo will pay an initial $281m for the brand, along with a potential performance-based earnout of $192m. Last year's financials aren't publicly available, but the company generated revenue of $33m in 2021. 

Founded in 2012 by former Remy Cointreau exec Stephen Carroll and Andrew John Garcia, Don Papa has built a loyal following among high-end rum consumers across the globe. 

For Diageo this move makes a lot of sense. While rum only accounts for about 5% of Diageo's net sales, lately the super-premium rum market has experienced spectacular growth. From 2016 to 2021, the super-premium rum market showed a compound annual growth rate of 27% in the US, and 18% in Europe. 

Diageo might already own one of the world's most recognizable rum brands — Captain Morgan — but until today, the spirits giant wasn't in a position to take advantage of the stratospheric growth at the premium end of the market. With Don Papa, Diageo now has a proven brand with global appeal to plug into its formidable distribution network. 

Overall it's been a busy six months for the rum category: 

• Diageo acquired Don Papa 

• Brown-Forman purchased Diplomatico Rum

• Pronghorn invested in Ten To One Rum 

• Duppy Share raised $2.4m

• Distill Ventures incubated Kromanti Rum 

For the first time in awhile, tequila isn't the "hottest" spirit on the market. 

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Deals 

• Warsteiner Group, one of Germany's oldest brewers, invested in Hye, a functional water brand from Augsburg, Germany. Hye's products contain active ingredients like ashwagandha and L-Tyrosine. The packaging is pretty great IMO. Warsteiner has been an active investor as of late. Last November they acquired a minority stake in Irish brewery Rye River Brewing Company. Link

• Tennis star Novak Djokovic invested seven-figures in Waterdrop, an Austrian hydration brand known for its dissolvable water enhancers. Incredible company and brand. Big fan of their products. Waterdrop raised $70m from Temasek last February despite being profitable. Link

• Pronghorn, an investor in black-owned beverage companies like Ten To One and Den of Thieves, invested in premium mixers brand Hella Cocktail Co. The company was founded in 2012 and has grown to over 20,000 points of distribution. Link

• As mentioned above, Diageo acquired Philippine rum brand Don Papa. Diageo has been in acquisition mode lately. Last November they acquired Texas whisky distillery Balcones. Link

What's New...

• Singer John Legend partnered with brand incubator A-Frame on a new skincare brand, Loved01 (pronounced Loved One). A-Frame is the same group that developed Naomi Osaka's skincare brand, KINLO, and Gabrielle Union's baby care brand, Proudly. Loved01 will launch at CVS and select Walmart stores in March. Link

• Lifestyle brand Playboy launched a new sexual wellness brand, Playboy Pleasure. The line of 34 products will be available exclusively at Lovers, a sexual wellness retailer that Playboy Enterprises acquired in '21. Link

• Miles, a new personal care brand for teenagers, officially launched. The company was founded by former Target merchandising exec Carly Broderick. The products look pretty cool, but I'm skeptical of the notion that parents & teenagers want another $9 deodorant. I hope to be proven wrong, though. Link

• Per IRI, Scotch Porter is the fastest-growing male grooming brand within the US beard & haircare market. Link

• Who Gives A Crap, the charitable toilet paper brand from Australia, is approaching $11m in donations over a ten-year period. The company donated $5.85m in 2020 alone. Very cool. Link

• Iconic American craft beer brand Fat Tire received a fantastic brand refresh. Link

• Mandatory Spirit Co., an Australian beverage company known their boxed cocktails, launched the first boxed liquor in Australia. By using lightweight boxes instead of bottles, transport capacity is maximized which reduces their carbon footprint. The difference is pretty staggering. Link

• Skincare brand Beekman 1802 just rolled out a fantastic campaign that gives back to the nursing company. You love to see it. Link

• Sazerac, the New Orleans spirits firm that owns dozens of iconic liquor brands, is suing its former distributor, RNDC, over $38.6m in unpaid invoices. No wonder the split seemed so abrupt earlier this month...Link

• The former Director of Operations at Sonoma Brands, Peter Barrick, is launching a better-for-you version of COMBOS called Rivalz. Link

• ONE Brands, the protein bar brand that Hershey acquired for $397m in 2019, just launched caffeinated protein bars. I'm in. Link

• Singer Kelly Clarkson and Rob's Backstage Popcorn (founded by the Jonas Brothers) collaborated on a new BBQ popcorn. Link

Distribution Quickfire

• Better-for-you mac & cheese brand Goodles is launching at Costco.

• Nutrafol will be available online and at select Sephora stores.

• Planet Based Foods will launch at Fred Meyer.

• Eco-friendly nail polish brand Kure Bazaar rolled out at Saks.

As always, thanks for reading. If you have any thoughts or feedback, you can find me at [email protected].