Sorgho Whiskey Blended With Rye to Produce A "Rye Like No Other"
April 30, 2019 - Epec - James FC Hyde has filed for a Certificate of Label Approval (COLA) with the TTB ( Alcohol and Tobacco Tax and Trade Bureau).
For a little background, before any spirit can be marketed its producer must submit a label to TTB for approval. TTB then reviews and decides if the label conforms to the strict labeling requirements for various distilled spirits. We submitted the above label with the intention of entering the Rye Whiskey market with a Blended Rye.
Why It Makes Sense for Us
The American whiskey market remains hot (2017 revenue up over 8%), especially in the super premium (over $30 per bottle; up over 18%) category, and within the American whiskey market, rye (2017 revenue up over 16%) is red hot.
Rye is making a remarkable resurgence, up 800% since 2009, but remains a relatively small slice of the overall market still. American whiskey volume is over 23 million 9 liter cases, and rye is only 900,000 cases (about 4%) of the market. There are no dominant brands in rye like Jack Daniels on the Tennessee Whiskey front or Jim Beam in the bourbon market.
Notice I didn't say "no dominant players" but "no dominant brands". That's because there is one dominant player. Midwest Grain Products (aka "MGP") of Indiana who quietly and under non disclosure, "cover of darkness" supplies many of the brands with at least some of their aged rye whiskey. Here's a list of some of the more popular Ryes (many considered craft) sourced from MGP (source of information is Holmes Osbourne - Osbourne Global Investments):
Over the years, we've invested a substantial sum (and continue to invest) to build up our barrel aging Sorgho Whiskey inventory - the most unique asset in the industry. A "Whiskey like no other". However, it's a fact of life, 1) that no matter how much we have at any one moment in time, it's a finite amount; and 2) as we add to our inventory we're adding new unaged whiskey that will take time to mature. So the way we see it, our job isn't necessarily to maximize the SALES of our pure 100% Sorgho Whiskey but to maximize the VALUE of our pure 100% Sorgho Whiskey.
So what if instead of only selling a single whiskey made with 100% Sorgho Whiskey, we could also use it as an ingredient to create other unique and proprietary products too? What if we could blend it with MGP Rye - like most others do in the Rye market - and create a new "Rye like no other"? What if by blending 1 bottle of Sorgho Whiskey with 3 or 4 bottles of MGP Rye, we could have 4 or 5 bottles of our "Rye like no other" to sell? The revenue potential of our finite supply of aged Sorgho Whiskey expands exponentially and because it does, so does its VALUE.
With the filing of our application for a COLA (Certificate of Label Approval) we're down to the last barrier to entry into the Rye market with our "Rye like no other". A note of due caution, getting the approval of any federal bureaucracy is always an unpredictable process. Wish us luck.
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