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June 2008
James Espey: A life of liquor to The Last Drop
Not many marketing careers begin in accountancy, but that’s how James Espey started out (he enjoyed bookkeeping at school). Luckily for anyone who has enjoyed the many alcoholic fruits of his labour, he majored in finance and marketing, couldn’t afford his articles, and took a position at the Cape Town Chamber of Commerce. “It taught me the big picture”, he says, “and after a spell as an assistant Marketing Manager at Spar Retail and a new-fangled MBA which had just come into being at the time, I joined Coca Cola and then Grand Met”. Grand Metropolitan was the first step in an illustrious career in the liquor industry which continues to this day.
 Espey still adores the liquor trade: “It transcends every facet of society”, he says with glee. In 1977 he came to the UK, and has since worked at board level for virtually all of the world’s most successful distillers- IDV, Diageo, and Seagram to name but three. He is also a non-executive director of several other drinks companies, including AG Barr (the makers of Irn-Bru) and brewers Fullers.
Stroll down your local high street, however, and few people will have heard of these companies. Espey has made money for these businesses by launching and managing their familiar brands. He is proud of his many successes, and just as comfortable with those that failed.
His first big brand involvement- and one he believes to be his greatest achievement- was Baileys; a drinks concept invented by his current business partner, Tom Jago. “In 1977 I was tasked with driving the Baileys brand. We converted it from a mixable drink into a serious liqueur. The advertising was classy- we ensured there was nothing frivolous about the brand. We took it up from 40,000 cases per year- today it sells more than seven million.”
Malibu is another liquor-store staple with a surprising history. “Malibu wasn’t invented in Barbados”, he chuckles. “It began its life in South Africa as ‘Coco Rico’ [a creation of his friend, ex-Gilbey’s SA CEO and current business partner, Peter Fleck]. Peter was responsible for the painted white bottles, and at the end of 1978 Peter, Tom Jago and I arranged a new product conference in the Bahamas. I persuaded Professor Ted Levitt, the Harvard marketing guru, to join us in order to catalyse some good ideas. Well, Coco Rico turned out to be registered elsewhere, but we already owned a failed brand called Malibu, so we appropriated the name. Shortly after the Bahamas conference, we came up with the strapline ‘It comes from Paradise and tastes like heaven’- even though at the time Malibu was bottled in Harlow, Essex!” The Caribbean connection is now complete- there is a big distillery in Barbados and Malibu is Caribbean through and through. The brand was sold to Allied Domecq and then Pernod; and Espey puts a thumb-in-the-air value on it today at £1 billion.
He and Jago are also responsible for the success of innumerable other famous drinks to have graced your cabinet in the past three decades, including Piat D’Or, Johnnie Walker Blue Label, the Classic Malts and Chivas Regal 18.
In all these successes, Espey’s achievement is to understand the business from top to bottom. “The consumer votes with his feet”, he says. “The sales team often only goes as far as the retailer. Our job as marketers is to sell through the retailer to the consumer. Marketing and sales teams in big brands need to understand and support each other. It’s a shame that politics drives them apart in some businesses. With the wrong point-of-sale material or branding, no amount of sales to the retailer will work. As marketers, we have to use shoe-leather in an international marketplace. I can’t design sales literature for Tokyo from London. We think globally, but act locally.”
Espey believes that instinct also plays a crucial role in new brand launches. “Baileys failed dismally in research”, he notes. “So the research was suppressed. Equally, I remember we had a brand called Greensleeves- it was a bright green colour and researched brilliantly, but utterly failed to have any impact. Research isn’t the holy grail, it’s just an aid to decision-making. It should never be the basis of the decision itself. If you’d researched Yahoo, would you have come up with the right answers?” Similarly, just as research can be wrong, so can instinct. “You need the courage to accept the occasional failure”, says Espey. “Tom invented Baileys. We also invented Greensleeves. The difference is that fame has many fathers: lots of other people claim to have invented Baileys, whereas the Greensleeves fan club would comfortably fit into a phone booth.”
What of existing brands? Espey has plenty of good advice:
- Beware of arrogance: “The minute you’re on top of the world, you’ve got problems”, he says. “Competitors will know the value of what you’re up to. Always assume ‘creative obsolescence’: the need to ask yourself what’s just round the corner. There will always be someone else with a good idea nipping at your heels.”
- Take your time: “It takes ten years to build a really good spirits brand. Brands which go up fast tend to come down fast, too. If you can create enduring style, then you’ve got a brand with longevity”. Espey cites Coco Chanel as one of his favourite brands- one which has style in spades, and therefore the ability to weather the fickle turns of fashion. “As a director of Fullers Brewery, for example, we’re facing the current recessionary trend like any other brand. But by keeping to a quality product, we know we can withstand any recession- and come out stronger”. There are no quick fixes with brands, and growing too fast is a definite danger signal. Aim for enduring style.
- Motivate your people: “If the people who work for a brand don’t act according to its values, then the brand will disintegrate. I think it’s pretty hard, for example, for BA to justify its claim to be the world’s favourite airline right now.”
Today, Espey is kept busy with a portfolio career which includes several non-exec and directorial positions; plus another venture in the drinks trade. “The Last Drop” is a perfect boutique business which he joyfully describes as “Three old duffers having some fun” and which is run from an office at the bottom of his Wimbledon garden. Peter Fleck, his old chum from the Coco Rico days (and let it be noted here that Espey keeps friends for life: no conversation with him fails to include credit to the many associates with whom he has worked along the way) owns a group of hotels around Cape Town called “The Last Word”, in which Espey is a shareholder. Guests can sample branded “The Last Word” wines, and Fleck thought it might be pleasant for guests to enjoy a branded whisky too.
The seed of an idea was sown. In 2006, Espey and Fleck hooked up again with long-time collaborator (and now octogenarian) Tom Jago; still a respected grand old man of the distilling business. They came up with the idea of “The Last Drop”: rare, exclusive blends of whiskies which in many cases are simply the last of their kind. “We wanted to make something special, and we wanted to honour the virtue of whisky’s 500-year history. People get excited about single malts, but that’s like hearing one note from one instrument. A good blend is like a symphonic orchestration. There are 82 whiskies in our blend, 70 malts and 12 grains [The Last Drop’s first launch, the 1960, is available now, with more to follow]. Of the twelve grains, only seven are now on the market- the other five are the final stocks in the world.”
Espey and Jago scoured the whisky trade, finally partnering with Morrison Bowmore Distillers to obtain the rare stocks. Espey got the blessing of Whyte & Mackay, of which he is a director, and The Last Drop was good to go. (Whyte & Mackay is now chaired by legendary Indian entrepreneur Vijay Mallya, indeed, one can’t help thinking that the flamboyant Mallya would most certainly approve).
Whilst trades description legislation requires that this first expression can only be claimed to be a 1960 blend, in fact 1960 is the youngest of the different whiskies to be included. With a rich, port-like flavour, hand-bottled and signed by the bottler at Bowmore, The Last Drop is indeed a taste that money cannot buy; at least not for long. There are only 1347 bottles for sale, and the retail price will be in the region of £1000 per bottle. It is distributed to only a select few outlets (Gleneagles being one), and Espey has turned down mainstream distribution deals.
“Above all, I’m having great fun, working with people I like, and giving something back to the scotch industry, which has looked after me so well. The entire marketing effort is me talking to people around the world, and every deal is sealed with nothing more than a handshake. It’s great fun being a mosquito competing in a world of tigers and elephants”.
Since coming to Britain from South Africa, Espey conservatively estimates his contribution to British industry at in the region of £3 billion. The Last Drop, the £1.3 million business he is working on now, might just prove to be his most satisfying yet.
Find out more about “The Last Drop”: http://www.lastdropdistillers.com
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