The Challenge
House of Rare faced significant challenges in securing exclusive tequila sources that would appeal to niche investors looking for high-value, appreciable assets. They needed to ensure that the tequila barrels they invested in were not only of exceptional quality but also had potential for value appreciation, which required deep industry insights and access to top-tier distilleries.
Additionally, managing logistics and maintaining quality throughout the aging process posed operational challenges, especially in scaling their offerings without compromising exclusivity. The complexity of navigating international trade laws and agreements to facilitate the import of tequila barrels further complicated their operations.
After completing Maguey Exchange’s SpiritsFlow Analysis, we identified three main roadblocks standing between them and successful expansion across the U.S.: supply chain optimization, product sourcing, and quality control.
The Solution
MGx leveraged its extensive network in the tequila industry to identify and secure partnerships with distilleries that specialize in high-quality, limited production tequila. MGx facilitated the procurement process by:
- Negotiating terms that ensured exclusivity and favorable pricing for House of Rare.
- Assisting in the establishment of long-term contracts with tequila producers to ensure a steady supply of premium products.
- Implementing a tracking system for barrel aging and quality assurance to maintain and increase the investment value.
Results
- House of Rare expanded its portfolio with exclusive tequila offerings that are not available to the general market.
- Enhanced investor confidence through provenance and quality assurance, leading to a 20% increase in investment year over year.
- Established a stronger brand presence in the marketplace as a leader in rare tequila investments.
Analysis
Lessons Learned
- Strategic Partnerships: Developing strong relationships with distilleries was key to securing exclusive access to premium products.
- Quality Assurance: Implementing robust tracking and quality control systems ensured the integrity and value of the tequila remained high, which is critical for investment-grade spirits.
- Regulatory Navigation: Understanding and complying with international trade regulations was essential to streamline the import process and avoid legal pitfalls.
Next Steps
- Explore additional rare spirit categories to diversify investment offerings.
- Develop a proprietary platform for investors to track their barrel aging process and market value in real-time.
Expand educational initiatives to increase investor knowledge on tequila investment, enhancing client engagement and trust.
Building a tequila barrel program means sourcing premium Blanco from the right distilleries—and connecting to potential brands. MGx connected us with brands, handled the vetting, and helped us establish relationships that would have taken years to build on our own. Now we're aging barrels from multiple partner distilleries with full confidence in quality and provenance.
