Rogue One Inc. (OTCMKTS: ROAG) is using its private label operation to grow its market, fill its coffers, and get more consumers asking for its unique tequila.
Through its Hacienda Capellania brand, ROAG markets its tequila for purchase in bulk quantities or for private label distribution.
-While its private label business is unique in how it allows ROAG to corner the market, it is not the only line of business ROAG operates.
ROAG also operates:
-Armero Tequila, its own brand of tequila
-The award-winning Santa Cantina and Santo Coyote restaurants—part of its Human Brands line.
-Capacity Beverage, which is, in part, responsible for the Shinju Japanese Whisky sold through the Rogue Baron (OTCMKTS: SHNJF) subsidiary
-Museo, a tequila-themed boutique hotel
-More than 450,000 blue agave plants under ROAG ownership or contract
How ROAG’s Private Label Operations Open New Doors
Increased Capture of Current Market
-ROAG currently sells its own brand of tequila, Armero, as a standalone brand.
-In using private label, ROAG is able to capture larger pieces of the market to which it already sells.
-This “doubling up” means that demand for ROAG’s tequila is driven by its Armero customers, but also, in part, by consumers who are choosing to not drink Armero.
Exposure to New Markets with Little-to-No Cost
-One often overlooked benefit of private labeling is the exposure to untested markets.
-As a tequila maker, ROAG is able to gauge response to its tequila through the demand created by its private label customers.
-Rather than investing its money in market research, advertising, and marketing efforts, ROAG can simply see how its tequila is received under the label of another brand.
-If the tequila is received well by drinkers in a given geographic, demographic, or psychographic subgroup, it may mean its Armero brand will do well in the same market.
Greater market stability
-Because of the diversification created by private label customers, ROAG spreads out its risk.
-In spreading out its risk, ROAG creates a more stable operation for the whole company simply by being a private label and bulk tequila provider.
-If one private label customer begins to experience slowing or diminished demand, that can be supplemented by other private label brands and ROAG’s Armero brand.
-Additionally, because demand for Armero cannot simply be created out of thin air, the counterbalance of demand from private label customers can go a long way if the Armero brand has a slow period.
Each of these factors are not limited to the Armero brand, but to the whole of ROAG’s operations.
Private label can help to subsidize, test consumer interest, and supplement demand across markets for Armero, ROAG’s restaurants and hotels, and its other spirit brands.
ROAG as an investment
-ROAG is trading lower than it was a year ago, but that could be a great opportunity for investors to get involved.
-Currently trading at $0.0048 per share, ROAG is certainly a low-cost stock for investors looking to grab a piece of the tequila and premier spirits market.
-As it continues to use its private label strategy as a canary in the coal mine for new markets, ROAG may be able to expand, with a strong indication of where their flavors and expressions are desired most.
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