Empirical, an experimental spirits company created by alumni of the famed restaurant Noma, has filed for bankruptcy for its Danish operations, according to a letter viewed by BevNET that was sent to shareholders last week. The founders insist business in the U.S. or globally will not be impacted and that its stateside business is “thriving.”
The e-mail letter, signed by Empirical co-founders Lars Williams and Mark Emil Hermansen, states that after multiple term sheets, the company’s six month long fundraising process has ended unsuccessfully with no clear path forward to additional funding, putting the company on the verge of insolvency.
Williams confirmed that Empirical’s “Danish office has gone into administration as of last week” but said it will have “no impact on Empirical’s operations in the U.S., the rest of Europe and globally,” he said in an email to BevNet.
He added that Empirical announced last January that it was embarking on a decentralized production strategy focused on the U.S. market, which entailed winding down the Copenhagen distillery and its separate operating company, which have both been completed as planned.
The letter, which was shared with BevNet via an industry source Tuesday, takes a different tone, beginning with the founders announcing “bad news” and expressing that they “cannot put in words how sorry we are to disappoint you” with no mention of the U.S. business.
“I cannot understate the disappointment we feel by having to send you this email,” read the letter. “We’ve accomplished so much, yet it still felt only as the beginning.”
The letter said the company will be filing for bankruptcy protection “in the next few days.” A bankruptcy announcement was filed in Denmark’s government gazette on December 6 for a company called Minor Threat that was previously titled Empirical (Minor Threat is one of the names of Empirical’s canned cocktails).
The news came on the same day that Empirical announced a collaboration with Doritos for a limited edition Empirical x Doritos Nacho Cheese Spirit, the most commercial offering from a distiller leading the way for uncategorized spirits.
Founded in 2017 in Copenhagen by Williams and Hermansen, Empirical uses unique fermentation techniques, low-temperature distilling, and unusual bases and ingredients to create out-of-the-box spirits. Williams, who is from New York City, took from his playbook as head of research and development at Copenhagen’s world-renowned Noma restaurant to experiment with a series of unconventional releases.
Examples include Soka which was made using the stalks from sorghum cane, and Symphony 6, a light pink distillation made with pilsner malt, lemon leaf, coffee, and other fragrant leaves. Its canned cocktails released in 2020 used ingredients like beet molasses, carob, and sour cherry spirit.
In January, Empirical announced it was embarking on a U.S. expansion with the opening of its first North American production facility in North Bushwick, Brooklyn. The move, slated for Summer 2023, was part of the company’s aim to prioritize the U.S. market, decentralize production by winding down the Copenhagen distillery, and be better attuned to local markets and more eco-friendly in the process.
“The U.S. market has an exceptionally large growth potential for the company, which is why Empirical is now building an experimental distillery and tasting room in Brooklyn,” said Williams in the email to BevNet.
As part of the transition, Williams planned to take on the role of CEO, while Hermansen focused on Empirical’s investor relations. The company has done several investment rounds, raising $11 million by 2019 mostly from U.S. angel investors, and includes Nordic Secondary Fund and SGH Capital as its most recent investors.
After the bankruptcy, filing the assets of the business will be sold according to Danish law, said the letter. The founders added in the letter that they don’t anticipate any cash being distributed back to shareholders, due to the debt the company owes to its secured and unsecured creditors, which would be paid first.