Can You Build a Solid Business Model Around Rare Spirits?

Every drop of booze The Last Drop Distillers sells is a limited edition—literally. The London company is known for buying and bottling parcels of rare spirits, often traveling the world to procure them from distilleries that have closed and even rejecting spirits that just aren’t exquisite enough.

“Our business model is unique,” says joint managing director Beanie Espey. “We only sell fine, rare, very old spirits. We don’t sell anything at a budget—everything we do is limited and exclusive.” She admits this is “both a privilege and a pressure,” since the pipeline for sourcing rare spirits can be uncertain. If a release is unsuccessful, there’s nothing to prop it up with,” she says.

Last Drop was founded in 2008 by spirits industry veterans James Espey, Peter Fleck and Tom Jago, who passed away last October. Collectively, they spent decades working with scotch makers, including Chivas and Johnnie Walker, and helped develop well-known brands such as Baileys and Malibu. Today, the company is run by Espey’s daughter, Beanie Espy, and Jago’s daughter, Rebecca Jago.

The three men started Last Drop when they realized rare parcels of spirits were secreted away across Europe, in distilleries, private collections and elsewhere. “[My father] knew these parcels of amazing spirits existed and wanted them to see the light of day,” says Beanie Espey. “He wanted to get them into the hands of people who would appreciate them.”

It seems like an impractical business. Espey says she sometimes has to turn down a cask of a rare single-malt scotch made by a well-known distillery because it isn’t exceptional enough. To give you an idea of just how selective they are, last year, Last Drop sold just over 1,000 bottles.

“It’s tiny,” says Espey. “And that’s an increase over previous years. Once upon a time, we released at most one per year. Now, we release two and sometimes three. But each release is limited by how much we find.” The largest release they’ve ever had was 1,300 bottles; the smallest, just 32 bottles.

Is it possible to make a profit with numbers that small? “The numbers are slim,” says Espey. “Obviously, the business model is safe, or we wouldn’t be here now.” Sazerac agreed, acquiring Last Drop in 2016, adding an even more aspirational tier beyond its already lofty Pappy Van Winkle expressions and Buffalo Trace Antique Collection.

While cognac and scotch remain Last Drop’s core products, expanding beyond those confines has helped grow the business. Of course, that prospect became easier under the Sazerac umbrella. “One of the advantages of being part of a larger entity is that they have tentacles that go out further than our little team in London,” says Espey. Currently, they’re looking at rum, American whiskeys, cognac and Armagnac, and “never say never to Japan,” says Espey. “Although that’s more difficult.”

Those additional resources have arrived at a time when acquiring rare spirits has become more challenging. “When we started out, it wasn’t as easy to find things that were of the right quality, but people were more open-minded about parting with single casks they didn’t have a clear plan for,” she says. Espey says that today “most of the distilleries are holding on to their crown jewels.” However, Last Drop is hoping to position itself as “a trusted route to market” for brands that have rare casks or expressions but don’t have the resources or inclination to market them.

Looking ahead, Last Drop is also collaborating with Buffalo Trace on making a super-aged American whiskey—an interesting development for a company that brands itself “The Last Drop Distillers” but until now has had nothing to do with distilling spirits.

Last year, Last Drop teamed up with Sazerac chief executive Mark Brown to lay down barrels of newly made bourbon, rye and other spirits in a super-chilled, climate-controlled Kentucky warehouse, with the intention of perhaps one day bottling 30-to-50-year-old bourbon, an age range usually associated with fine Scotch whiskies, not bourbon, where 20 years tends to be the upper age limit for drinkability.

“It’s a very big gamble, and it may not pay off,” says Espey. “But it’s a very exciting one. They put together the best of the best of the whiskies into this warehouse, and hopefully, if everything comes together, maybe in 20-odd years’ time, we’ll be launching our first spirit from end to end. It’s an exciting evolution of our story.”