The rapidly growing whisky investment market has seen 'dramatic gains'
Not only whisky drinkers are getting a taste – investors also want to add the popular alcoholic spirit to their portfolio.
Referred to as 'liquid gold', whisky as an investment 'lives up to its name', said Pavan Shamdasani in Prestige. Whisky investments have 'growing significance' and as an asset, 'at least on paper', have experienced 'dramatic gains'. Whisky investments are 'booming', said Victoria Moore in The Telegraph. However you slice it, the 'number of people interested in spirits worldwide is huge'.
A regular feature at auctions
Starting as an 'exclusive hobby among the wealthy', collecting rare whiskies has 'become an industry. An industry that auctions the rarest bottles and trades them on the secondary market', reported Bloomberg.
The proof of the growing popularity of whisky at auctions came in early December when a four-decanter lot of Glenfiddich from the 1950s sold for £1,037,500 (€1,243,366). At the same event, organized by The Distiller’s Charity in collaboration with Sotheby’s, a bottle of The Balvenie 56 Year Old 1964 exceeded its estimate of £50,000 to £80,000 (€60,000 to €95,000) and sold for £175,000 (around €210,000).
Sotheby’s announced a record revenue of 132 million USD (971,000 GBP) at its wine and spirits auctions in 2021. Spirits accounted for a total of 21 million USD (18.4 million €). Led by rare Scotch whisky, this highlighted the 'development of the category as a mainstream component of the global auction market,' reported Decanter.
From 'everyday' bottles for €300 to record-breaking auctions, the mood has 'never been hotter,' said Moore. However, there are some words of warning... In a blog on Master of Malt, Ian Buxton said that the rapidly growing whisky investment market 'cannot keep rising forever.' There are signs that bankruptcy is coming soon. 'You've been warned!' Also.
‘Meeting market expectations’
As an alternative investment, whisky can be an 'exciting option for those looking to diversify their portfolio,' said Katharine Swindells in Spear’s Magazine. According to Knight Frank's 2021 Wealth Report, rare whisky has seen a value increase of 478% over the last ten years, which is more than many other luxury items, including cars, wine, handbags, and art.
While rare bottles are the most popular type of collecting, a new trend has also emerged in the industry – investing in whisky casks and single-cask variants. Despite the rarity of collector bottles, it can be a relatively easy market to enter through specialty shops, auctions, or private sales. However, buying whisky casks can be 'a bit trickier,' said Michael Haldane on Moneyweb.
Cask 88: The search for rare and old whiskies
Cask 88 is an independent bottler and one of those companies that specializes in whole casks of whisky and single-cask varieties, operating from five locations around the world. It focuses on Scotch whisky and sources rare whiskies from renowned distilleries across Scotland. That's why.
A mission is being established to 'open the door to owning casks that would otherwise remain closed to private individuals,' said Patrick Costello, Global Sales Director of Cask 88. From purchase to custodian of the cask, the company issues a cask ownership certificate and a purchase contract and also manages an investor's portfolio.
Cask 88's 'pursuit of rare and old whisky' led the company to launch its 'Unfiltered' series in 2021 - four unique single cask whiskies bottled directly from the cask. The rare drops in the collection included the 12-year-old Glen Garioch, the 13-year-old Caol Ila, the 14-year-old Ledaig, and the 32-year-old North British.
The Unfiltered collection is all about the liquid, and this has been the main focus since Cask 88 started trading in 2015. As ownership of whisky casks becomes increasingly popular among investors, Costello provided insight into the growing trend:
How did the idea for Cask 88 come about?
We started this journey like many people who embark on cask ownership: in awe of the fact that we could control the future of an entire whisky cask and ultimately its bottling and packaging design. A cask of whisky is way too much whisky for one person, so we looked for ways to share this experience with others.
„After we started trading in 2015, it was more of a small, personal endeavor. Now we enable our customers experiences on a scale that would have been unimaginable for us five years ago. Every year, we've more than doubled the number of trades in our business; despite all odds, 2020 was our strongest year yet. As one of the very first in this emerging market, we have gained a unique insight into the market for private whisky casks and have therefore started ourown analysis of the cask sales data that we have collected over the past more than five years.
How does the investment for a cask compare to a bottle or collection?
"Whole whisky casks have a unique property that whisky in the bottle doesn't benefit from: the spirit in the wood matures naturally over time. The whisky draws a complex flavor profile from the wood, meaning it gains flavor and value over the years. Anyone familiar with single malt whiskies will know that an 18-year-old whisky is overall a smoother sip and fetches a higher price than, say, a 10-year-old whisky."
"Once a cask is bottled, the maturation process stops. It is really only demand that can then drive up the price of that bottle of whiskey. Whiskey in casks gains in prestige and value the longer it remains in the wood, in addition to the vagaries of consumer demand. Those who have the patience to wait will be rewarded with a whole cask of aged whiskey that will be highly sought after and most likely quite valuable. While individual bottles of Scotch whiskey are more likely to provide short-term gains, cask whiskey can provide long-term benefits bring.”
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