Private Label Primer, Part VIII
Lesson VIII - Summary
Thank you for joining me for the last installment of the Private Label Primer. Hopefully you’ve been with me since January, learning about how to create your own private label. You can download previous versions from the “Archives” section of our website, www.gotrum.com.
An excellent way to succeed in the world of private labels is to always start with the end in mind. But having the end in mind does not mean knowing only what the brand name is and what the bottle looks like, it involves:
• Knowing exactly what a private label is. Knowing the types of private labels. We covered this in Lesson I.
• Knowing the financial considerations, recognizing the power of the economies of scale and knowing how to compete against them with a small operation. Knowing the risks of under-capitalization. We covered this in Lesson II.
• Knowing the importance and the consequences of bottle selection, closures and finishes. This was covered in Lesson III.
• Knowing the importance of proper rum selection, the impact of this selection on filtration, precipitation, age claims, quality control and laboratory tests. Knowing the risk of entering the market with a single product or a multi -product portfolio. This was covered in Lesson IV.
• Knowing all there is to know about bottle labels and their contents (optional and required information), for each of your target markets or Lesson V.
• Knowing about the logistics involved in producing and shipping the private label to its final destination (customs, brokers, warehousing, inland transportation). You also need to know about import licenses, tariff codes and shipping insurance. We talked about this in Lesson VI
. • Knowing about what to do once the private label reaches a distributor. Need to be well-versed in the world of marketing and promotions. Know how to help your distributors and what to expect from them. This was covered in Lesson VII .
If you know all the above points and still have the desire to get into the world of private labels, then –and only then you are ready to finalize your business plan and to start evaluating possible suppliers (of rum, bottles, closures, labels, boxes and bottling services).
There are dozens and dozens of “dry goods” suppliers and designers ready to send you samples and talk to you about placing an order. But there are fewer suppliers of “wet goods” (rum, in our case), due to the reasons discussed in Lesson I.
This does not mean that you can’t buy the rum from established rum producers, it only means that, if you are able to, it’ll typically be white or very young rum that will not compete against the distillery’s own brands.
Fortunately for private label owners, there is one company that has been buying white and young rums from many distilleries around the world, further aging it and finishing it, providing it in bulk to those wanting to bottle it themselves, or supplying it directly to selected co-packers who take care of the bottling and labeling.
The company is Rum Central (the website is www.RumCentral.com), it is owned and operated by Rum Runner Press, Inc., publishers of “Got Rum?” magazine.
The inventory at Rum Central includes:
• Rums from over a dozen countries
• 150 Standard Marks (rum types) and unlimited Custom Formulations
• Ability to finish any Mark or Custom Formulation in Ex-Bourbon, Limousin, Sherry, Port or Cognac Barrels
• The standard order quantity is 10,000 liters, but small private label owners can purchase as little as 1,000 liters to develop prototypes or proofs of concept
• US and International Warehouses For some private label owners however, having a successful brand may not be the ultimate end goal. For them, distilling their own craft rum may be the final destination, and launching the private label could be their proof of concept. This too is possible, and I am happy to have helped several such enterprises get off to a good start.
Once the profile of the private label rum has demonstrated to be a commercial success, we can sit down with the client to select the right distillation equipment and to design the aging warehouse with the correct number and type of barrels so the client can take over production of the rum in the future, making the transition from private label to house brand.
Luis Ayala
Rum Consultant