Spirits-focused private equity group InvestBev has found its next partner.
The Chicago-based firm, founded in 2015 by industry veteran Brian Rosen, has built a reputation for investing in categories with more barriers to entry such as brown or agave spirits, with portfolio brands like Siempre Tequila, which aims to offer an antidote to celebrity brands, and the first mezcal RTD to enter the U.S. market, Elenita. With its $1 million investment in Ten to One Rum – founded in 2019 by former Starbucks vice president Marc Farrell and backed by pop star Ciara as a co-owner and director – the company is hoping to replicate that formula in the ultra-premium rum space.
The firm recently closed its fourth fund at $45 million and launched a sister debt platform for the crafts spirits industry. Its parent company, Growth Beverage also recently debuted a new incubator that aims to support adult beverage brands that don’t meet the private equity fund’s revenue thresholds.
“We are thrilled to partner with Ten to One Rum and founder Marc Farrell,” said Rosen. “Marc and his team have built an incredible brand for what we feel is the next hot category. Data shows that Rum is gaining share monthly, and we are excited to support Ten To One in their growth journey.”
Rum sales by volume fell 2.8% from 2021 to 2022 according to the Distilled Spirits Council of the United States (DISCUS), although premium-plus rums have fared a little better and been a growing bright spot for the category globally. The rum category as a whole was down -3.4% off-premise in the last four weeks ending August 12, with super premium and ultra down -1%. But premium-plus rum volumes are expected to climb by a CAGR of +7% between 2021 and 2026 in the U.S., with value increasing by a CAGR of +8%, forecasts data company the IWSR.
Farrell, who was born and raised in Trinidad, is part of a generation of new rum entrepreneurs reframing the category through the lens of their cultural heritage or as a sustainable, higher end spirit. Some global spirit companies are also hedging their bets on the upper price tiers of the category: last year Brown-Forman invested in the Diplomático Rum family of brands, which hold top placements for super and ultra premium rums, and Diageo acquired super-premium dark rum label Don Papa Rum for an initial fee of $281.5 million in January.
The collaboration aims to open new markets, meet growing demand, and establish Ten to One Rum as a premium market leader within the rum category, according to the press release. InvestBev will now join forces with Pronghorn, which kicked off its pledge to back 57 Black-owned spirits brands by 2032 with an investment in Ten to One last August.
“We’ve always sought to identify great investors who not only have resonance with our aspirations for Ten to One but also have the ability to directly impact those ambitions to build something iconic with the brand,” said Farrell. “Brian and the InvestBev team fit the bill on both fronts, and so we’re thrilled to welcome them to the Ten To One family.”