Diageo deepens rum presence in Caribbean - Positions 'Captain Morgan' for growth
Published:Wednesday | December 8, 2010 | 12:00 AM
Diageo Plc, the global drinks giant and parent company to Red Stripe Jamaica, is reportedly negotiating a takeover of Guatemalan rum brand Zacapa, in a transaction expected to close next April.
It is seeking to buy a 50 per cent equity stake in the rum brand, which Diageo has been distributing for two years on behalf of Industrias Licoreras, according to reports by Drinks International.
The reports of Guatemalan talks emerged days after Diageo USVI's formal announcement of the commissioning of its new 20 million gallon capacity rum distillery in St Croix, from where the drinks giant will produce its Captain Morgan rum.
Diageo said the distillery was a US$139 million investment in a statement announcing that it will also be developing a US$5 million visitor centre at the property.
The Caribbean distillery as well as another at Roseisle in Scotland, was a combined US$220 million investment in 'green' production, Diageo said.
The St Croix plant will recycle 90 per cent of its washwater, use rainwater in the production process, incorporate roof ventilation and natural lighting as its energy-saving strategies, as well as creating bio-fuel from by-products from the plant from which gas will be extracted—all designed to cut carbon emissions by 15,000 tons per year.
Diageo's plan for Captain Morgan is to grow the rum into a "global mega brand", it said last week.
The brand, which is distributed in the United States (US), reportedly sold more than eight million cases in 2009, a poor second to Bacardi's 18-19 million cases.
Zacapata, which is sold in the US and parts of Europe, is also targeted for growth as are Cacique and Pampero, two Venezuelan brands, under a broader plan described by Diageo's global category director for vodka, gin and rum Ed Pilkington to reporters to develop a "strong Latin rum business".
Diageo has set global targets to cut carbon emissions at wholly-owned sites by 50 per cent, increase water efficiency by 30 per cent, reduce the pollution associated with washwater by 60 per cent and reduce waste sent to landfill by 100 per cent, it said in a statement.
Roseisle aims to reduce carbon emissions by approximately 13,000 tons per year "through direct savings on fuel use for steam raising, and ultimately aims to achieve near neutral use of fossil fuels and water."