Monday, September 29, 2014

The Future Of Craft Rum


For those of us who follow the Craft Rum business (and really the entire Craft Distilled Spirits Industry as they are all intertwined) an article in Lehrman Beverage Law came out discussing some problems that Tito's Handmade Vodka may be experiencing via a class action Suit. Also other articles are bringing up questions of what is a Craft Sprit and one specifically about Rum and its growth potential and futere.  

The First article can be found here: The Tito's Lawsuit: When Approval is not Approval

I can't publish it in part or its entirety but follow the link (it opens in another window in your browser) and we can sort of leap through it. In a nutshell a class action lawsuit has been filed against Tito's because their advertising and label proclaims the product to be "Handmade". Since Tito's has grown over teh years and now produces some 1.3 million cases a year, the suit contends just haw many hands are actually making the vodka.

Similarly, Templeton Rye is getting hit with a suit claiming: "The class-action lawsuit filed in late August in Cook County Circuit Court in Illinois on behalf of "all individuals in the United States who've purchased a bottle of Templeton Rye," comes after revelations in August that the whiskey is made using the stock recipe of an Indiana distillery.
Since the company released its first bottles of whiskey in 2006, its marketing materials have said the founders were inspired by the Prohibition-era recipe of Alphonse Kerkhoff handed down through his family on a scrap of paper. But in an interview last month, company chairman Vern Underwood said federal regulations prevent the company from making the whiskey using the Kerkhoff recipe, said to have been loved and bootlegged by Chicago gangster Al Capone."

This in a USA TODAY article: Here

The article goes on to mention: "The company also announced plans to begin printing on its labels that the whiskey is distilled in Indiana. The issue gained national media attention after The Daily Beast published an article in July detailing how numerous "craft" whiskey brands buy their product from MGP Ingredients, a Lawrenceburg, Ind., distillery.
Prior to the company's recent admissions, Templeton Rye worked to deceive drinkers into believing "the good stuff" was a craft whiskey made in Iowa, violating the Iowa Consumer Fraud Act, according to the lawsuit. The complaint includes pictures of the company's marketing tools, including a T-shirt reading, "Templeton Rye: Made in Iowa" and a flyer from a tasting at a Chicago bar that advertises the "small-batch rye whiskey made in the tiny town of Templeton."
"Consumers, seeking an alternative to mainstream, mass-produced alcoholic beverages have purchased hundreds of thousands of bottles of Defendant's Templeton Rye and have paid a premium price over other whiskeys to obtain those qualities," the lawsuit said. "Unfortunately, thousands of consumers across the country have been injured by Defendant's deceptive marketing practices."

So, consumers are beginning to find that some Distillers of Craft Spirits sometime don't craft anything and don't even, sometimes, distill... Bummer





Lets add to this an article in The Drinks Report, dated June 2, 2014... Here is the Link

The content of the article is below

The future for rum lies with clubbers

Over 150 rum industry experts gathered in the City of London last month to debate whether the future of rum lies with connoisseurs or clubbers.
On arrival, ‘connoisseurship’ was considered the way ahead. After presentations on global rum sales by Melissa Earlam of UBS, and passionate opinions from Ed Pilkington, marketing and innovation director at Diageo, and Chris Searle, recently retired international affairs supremo from Bacardi, the vote was cast again. The room had turned.
The volume and scale of opportunity provided by clubbers in a truly global world had convinced the hall connoisseurship was too narrow an opportunity on which to focus – especially when up to 10% of a cask of rum may evaporate each year.
With global rum sales at 145m cases in 2013, or 4.7% of global spirits sales, and 940 launches in the US alone in the past five years, this is clearly a vibrant sector. However, how does the category gain growth at the top end when premium rum is considered just $100 – and premium whisky may be US$10,000?
The nature of the questions and answers exposed the underbelly of the issue being that both sides of the coin are critical to the future of rum. Without the volume and scale the “clubbers” offer, the sector would not be facing an exciting future; without connoisseurship, rum will not claim the high ground that its true value and labour should engender. A category filled with passion, warmth and fun was truly brought to life.
David Grant, past Master of the Worshipful Company of Distillers, said “Melissa Earlam set the scene with succinct statistics; Ed’s passionate delivery was a really hard act to follow; but Chris just blew him away!”
The Distillers’ 2014 City Debate
First held in 2012, the debate’s aims are to raise the profile of the spirits industry and to place the Worshipful Company of Distillers at the very heart of the sector.
2 June 2014 - Felicity Murray The Drinks Report, editor 


This article tosses in another segment of growing your craft business without growing out of your craft. While the first articles are arguing against distillers that may not really fall into the "Craft" designation any more, how does a growing concern handle growth? And, more importantly how to inspire growth without losing the drink?

In the Drinks Report article the growth potential for rum is discussed via "Clubbers" and Connoisseurs. What is meant here? Clubbers are people who frequent places where spirits are offered for sale... This could encompass - Dance Clubs, Rum Bars, Liquor Bars etc -- Clubs. While a top notch Premium Rum may cost $100 a bottle, some of the Premium Whiskeys can demand $10000.00!
Why? Well they have been around longer, have a huge following even outside the Craft market and have been accepted by pretty much everyone - particularly both sides of this comparison.

With Rum being the subject, most Rum Industry Experts felt that the Connoisseurs drove the acceptance and success of Craft rum. But after discussion and sale facts - it seems the Clubbers share an equal share of the force needed to propel the Rum Distillers into a wide acceptance and growing market.

Now comes the question... How? Toby Beall of Tailwinds Distillery says on the subject, "I think a lot
of the problems facing rum are the same as those causing lawsuits in the US right now; lack of transparency."  .... "This and the lack of education. You have four brands that have dominated the category for many many years and unfortunately dumbed down the palettes of the consumers as to what rum can taste like. There many great non sugar-bomb brands out there. Rick I think you are correct: clubbers are those that identify with fads or trendy marketing and usually grow out of the trends as they grow older. That is where they presume connoisseurs will pick up and grow old with the spirits that they love . Though I won't hold my breath at seeing Craft rum in clubs anytime soon. Even Chicago's self proclaimed rum and tiki bars do little at focusing on the stories behind the brands and instead are more cocktail focused."
Mr. Beall is very interested in growing the Rum market and I think his description of Clubbers is spot on. The problem in my mind is the reputation of Rum. When I have gone into a restaurant or bar and ask to see their selection of rums, I get the regulars. Occasionally I have seen one that I can accept as, if not a small batch craft Rum, at least a more crafted rum, one with a bold taste and genuine flavor. What Toby says even places that specialize in Rums avoid the Smaller Craft rums and stick to a narrow menu. Those of us who have discovered rum under a new light need to press on. But the battle is tough; "You have four brands that have dominated the category for many many years and unfortunately dumbed down the palettes of the consumers as to what rum can taste like. There many great non sugar-bomb brands out there." This is a legitimate point. 

Later;

Feel free to comment away here and we can continue this talk a things move forward. In the meantime - enjoy Craft Rum - Rum that you know the story and drink the Distiller's passion.





We will be going to The Chicago Independent Spirits Expo!!! I hope to meet and sample all you great Rum Distillers that will be there!
As a reader of Rick The Rum Runner -- we are also offering a discount code thanks to the kind efforts of the Expo Promoters. If you go to their site to buy a ticket - HERE - You will get $20 off either a VIP or GA ticket which are $85 and $65 (now $65 and $45 respectively) Just use the code: rumrunner
If you want to know more or need updates, Just go here!


Use FeedSpot as your RSS to keep up with RTRR

Tito’s vodka was doing great for the past 15 years, then hit a gigantic speedbump this week in the form of a class action lawsuit.
Tito’s therefore provides a good example of when an approval is not really an approval. Tito Beveridge has more than 30 TTB label approvals for his vodka from 1997 to 2013 (as in the above image, from LabelVision). They may not do him much good in this lawsuit, even though, in years past, most would assume the federal approval would be dispositive. It’s a good thing most TTB approvals are not paper anymore because these would “not be worth the paper they are printed on.”
Summary:  in Hoffman v. Fifth Dimension, Inc., Gary
Hoffman (a consumer)
sued Tito’s vodka on behalf
of all Tito’s customers in California, claiming that

the company misleads people about whether the
product is “handmade.”
The lawsuit was filed
September 15, 2014 in San Diego county court. The
federal government reviewed and approved the
Tito’s labels, but has no definition for the term at issue.
The classic case of an approval that is not really an approval would be your garden variety Napa Valley Chardonnay, Vintage 2010. TTB will take almost every one of those italicized words at face value. To the extent any one of those words is not true, your approval is not going to help you too much, in the event of an inquiry. Like an IRS tax return, the COLA (and any formula approval) is, to a surprisingly large degree, something of an honor system, stapled together with the penalty of perjury on every such document.
- See more at: http://www.bevlaw.com/bevlog/vodka/the-titos-lawsuit-when-approval-is-not-approval#sthash.ZnkeVSIj.dpuf

The Tito’s Lawsuit: When Approval is Not Approval

t
Tito’s vodka was doing great for the past 15 years, then hit a gigantic speedbump this week in the form of a class action lawsuit.
Tito’s therefore provides a good example of when an approval is not really an approval. Tito Beveridge has more than 30 TTB label approvals for his vodka from 1997 to 2013 (as in the above image, from LabelVision). They may not do him much good in this lawsuit, even though, in years past, most would assume the federal approval would be dispositive. It’s a good thing most TTB approvals are not paper anymore because these would “not be worth the paper they are printed on.”
Summary:  in Hoffman v. Fifth Dimension, Inc., Gary
Hoffman (a consumer)
sued Tito’s vodka on behalf
of all Tito’s customers in California, claiming that

the company misleads people about whether the
product is “handmade.”
The lawsuit was filed
September 15, 2014 in San Diego county court. The
federal government reviewed and approved the
Tito’s labels, but has no definition for the term at issue.
The classic case of an approval that is not really an approval would be your garden variety Napa Valley Chardonnay, Vintage 2010. TTB will take almost every one of those italicized words at face value. To the extent any one of those words is not true, your approval is not going to help you too much, in the event of an inquiry. Like an IRS tax return, the COLA (and any formula approval) is, to a surprisingly large degree, something of an honor system, stapled together with the penalty of perjury on every such document.
Updates:
9/23/2014: Tito’s apparently put out a press release, sketching out a defense. I sure hope they have more. They took a jab at the plaintiff for botching the defendant’s proper name, Fifth Generation, Inc. Shanken points out that the brand is at 1.3 million cases per year (that’s a lot of hands!). Tito says “he will vigorously contest the lawsuit.” Tito largely hangs his hat on the fact that TTB approved the labels.
- See more at: http://www.bevlaw.com/bevlog/vodka/the-titos-lawsuit-when-approval-is-not-approval#sthash.ZnkeVSIj.dpuf

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