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Last Drop sale shows faith in Scotch

  • Did the purchase of The Last Drop come as a surprise? Not really. The always voluble James Espey hinted heavily when we interviewed him that eyelids were being batted at potential suitors.

    Was it a surprise that Sazerac stepped in? Initially, perhaps, but when you take a look at how it has developed its Bourbon portfolio – almost single-handedly creating a super-premium sector – you can begin to see why it views The Last Drop as a natural partner to brands such as van Winkle (which it distributes), Blanton’s and its annual Antique Collection limited release series. The firm was quite open in claiming that buying The Last Drop will ‘allow [it] to extend its portfolio into the super-premium, craft market’.

    It is certainly good for The Last Drop. The issue for firms such as this is, obviously, access to stock. The Last Drop is well named as it specialises in the rarest of the rare – precious and unusual whiskies. The advantage of this business model is that they are able to supply what few others can.

    The Last Drop Distillers

    Unusual offerings: The Last Drop specialises in the rarest of rare spirits

    Its drawback is that, by their very nature, these whiskies are in short supply – mere dribbles in some cases. How can you grow a business which stands on the pinnacle of the finite? The answer, it would seem, is investment from a larger player.

    It’s a good deal for both sides, giving Sazerac a small but snazzy string to its bow and access to this top-end market, while The Last Drop now has the capital to grow its business and, one would assume, widen the remit further (it has already bottled a Cognac) outwith Scotch.

    Already, the naysayers are bemoaning another Scotch whisky firm falling into foreign hands. I’d look at it from the other side. Why are American firms investing (again) in Scotch? In the past few months we’ve had Brown-Forman buying BenRiach. Now, albeit on a smaller scale, here comes Sazerac (and I wonder if this is the only purchase it will make).

    They have done so, not because both Scotch firms were being sold at bargain-basement prices, but because Scotch added something to their portfolio.

    Firms like these don’t buy into categories which are staid, boring and in decline. They want to invest in ones which are dynamic and which will benefit their bottom line – this is business, guys, not altruism. Scotch has prestige; it has heft. It’s not a stolid, dependable, performer but a drink which people continue to be excited about.

    It’s often hard to discern what any of these deals mean to whisky drinkers. I mean, does it matter to us who owns a whisky as long as it is still made and we can still buy a bottle?

    What the two American purchases do give us is an indication of how the world sees Scotch whisky – as a drink with a bright future; at the top end, Sazerac says; and with single malt, chips in Brown-Forman.

    Scotch isn’t in decline. It isn’t moribund, but in good health and is a drink which people – be they in the corporate world, or bellying up to a bar somewhere – continue to believe in.

    Now that is more relevant to the drinker than the intricacies of finance.

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