Shaking Up the Beverage Industry

An idea for a new product can create wonderful new opportunities. 
But it can also mean risk, upheaval and uncertainty.

RumChata

Read their full story below

Makers of RumChata featured on Mad Money

The makers of RumChata were recently featured on an episode of Mad Money. Watch the video below.


The RumChata Story

In 2008, Tom Maas and his father Duane were looking for a new challenge. Each had retired after successful careers in the liquor and beverage industries. They wanted to work together so they formed Pewaukee-based Midwest Custom Bottling with Duane as president and Tom as vice president. Clients for the new venture were low-volume specialty beverage brands. Despite their best efforts, growth was slow.

“At first there just wasn’t much margin in it,” says Duane. “The projects from our clients were usually difficult and highly labor-intensive.”

Then one day, Tom hit upon an idea that would take their business in a new direction. 

In his kitchen, Tom experimented with various blends of flavored liqueurs. His goal was to peddle new recipes to established liquor companies. One of his creations was a mixture of rum, cream and a touch of natural cinnamon, vanilla, sugar and other flavors. It was an immediate hit with family and friends. They convinced Tom to bottle and market the beverage himself instead of selling the formula to a big-name liquor company. Duane gave Tom the thumbs-up. They would develop, bottle and market the drink on their own, calling it “RumChata,” a mashup of the words “rum” and “horchata,” a summer drink popular in Spain and Latin America. 

With Tom’s liquor industry connections and Duane’s know-how in custom bottling, the father-son duo founded Pewaukee-based Agave Loco LLC to produce and market RumChata. The market was right for their product if they could move quickly. All they needed was capital. But it was 2008. The economy had tanked. Credit was impossibly tight.

"They Just Didn’t Get It"

“The large bank we had been dealing with figured on getting approvals from their loan committee and everything would be fine,” Duane recalls. “Well, they got to the loan committee and found out that the bank now required about 20 more signatures, which were going to take a couple months to get. We just didn't have the time.” 

Even some mid-size banks were unable to help Agave Loco. “Most community banks are comfortable in a certain niche, for example helping shopping malls get going,” says Tom. “We are really a very different specialty business, because there is not going to be a bottling company in every community. With some of these other banks it was very easy for them to say ‘no’ to us because our vision was something they didn't understand. They just didn't get it.” 


The Perfect Fit

By 2009, the RumChata business plan was ready for launch but still in need of a bank just as ready. “We started talking with Park Bank,” says Tom. “It was the perfect fit for us because they understood the issues of small businesses.”

“With Park Bank, I think the big difference is we got more of a personal approach because they came in and talked to us. It wasn’t just ‘Send me an email, send me a letter or talk to us on the phone,’” Tom explains. “I think their personal approach of actually getting into our business and understanding what we are doing has been helpful, for both parties.”

“We were in dire need because we were expanding very, very quickly,” adds Duane. “With Park Bank, we had access to the right people who understood our vision and saw the potential. As we have evolved, we have gone into a lot of construction and bought a lot of new equipment. Each time we came to Park Bank saying ‘We need X number of dollars for this,’ they put together a program and we got it.” 

Partnership Not Paperwork

One year after the introduction of RumChata, more than 64,000 cases had been sold. Just five years later Agave Loco sold its one-millionth case of RumChata in April 2014. Today, thanks in large part to the exploding popularity of RumChata via social media, Agave Loco LLC continues to operate in the fast lane. The company employs 30 full time and up to 150 temporary service employees. Tom and Duane project revenues of $75 million by the end of 2014.

To expand on its success, Agave Loco introduced a new brand of rum-infused cream liqueurs in select U.S. markets during the first quarter of 2014. Tippy Cow is a Wisconsin-themed beverage featuring four “old-fashioned” flavor profiles including orange cream, chocolate, vanilla soft serve and shamrock mint.

Tom and Duane credit Park Bank for being able to understand their business and their vision. “I would say it came down to partnership not paperwork,” says Tom. “These other banks, all they cared about was ‘Were the papers filled out properly?’ Park Bank actually wants to partner with you and see what your business is, and that to me in a nut shell is what our relationship with them is all about.”