How To Invest In Scotch Whisky

Buy Whisky By The Bottle

One can simply buy bottles of whisky with the hope of selling them on at a higher price. The key, of course, is to buy the right bottles usually from iconic distilleries in limited releases.

Within this area of interest, single-malt Scotch makes up the majority of the market . Thats because, while countries such as Ireland and Japan produce a fair deal of whiskey , investment interest in these drinks is more limited.

Rare Whisky 101 publishes data and intelligence aimed at whisky collectors and investors. Updated monthly, its Rare Whisky Icon 100 index charts the value performance of iconic collectables and is designed to track the marker for highly desirable, regularly traded bottles of single malt Scotch whisky.

As Rare Whisky 101 points out, not all names within the index increase in value. But since the beginning of 2013, when the index was launched, the Icon 100 has returned just over 400% till the end of June 2022.

Numerous Scottish distilleries produce whisky, but certain names see their product increase in value at greater rates than others.

The table below shows Rare Whisky 101s so-called collectors ranking a league table based on an equal weighting for volume and value sold at auction in the UK.

Table 1: Collectors ranking 30 June 2021

Would-be buyers need to keep an eye out for auctions and private sales. They should also scour distilleries direct for news of upcoming releases of rare bottles.

Scottish Quality Takes The High Road

In Scotland, demand for the highest quality whiskies is surging. Scotch whisky is the worlds most internationally traded spirit, with 42 bottles shipped every second and it makes up around 75% of Scotlands food and drinks export revenue.* Premium Scotch Single Malts have become far more than a niche segment. Export sales grew by over 14% in 2016/17 and exports of Scotch Single Malts are set to grow by 11.4% from 2018 to 2022 enjoying a compound annual growth rate of 2.7% while the CAGR of blends is set to fall over the same period. The trend is set to continue with traditional markets such as the US resilient in the face of tariffs, while countries such as Brazil, India and South Africa are growing fast.

In 2019, the Scottish industry posted another record-breaking year of sales, growing the global market to over £4.9 billion.*

Understanding Scotch Whisky Investment In 2022

Georgie Harris, CEO, founded Hackstons

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The past two decades have seen the rise of cask Scotch whisky as a tangible asset that is no longer restricted to the super-wealthy. Based on my conversations and dealings with those in this industry, I hope to describe why many investors are excited about this market and where it can go in the future.

Scotch And Other Spirits

When I started my company, we began to explore which spirits make the best investments. Wine has traditionally been a popular choice however, due to the fact it can have good and bad years, it lacks the consistency of something like Scotch. While whiskey cask investing can be impacted by reductions in demand, a cask is highly unlikely to lose long-term value due to poor quality ingredients.

We chose Scotch specifically because it is the most established whiskey market. Irish whiskey, although older, has far fewer active distilleries, with most of them being established in the 2010s. Otherworld whiskeys, while tasting great, can be riskier or less accessible than Scotch in terms of an investment. For the purposes of the rest of this article, I will be referencing Scotch whisky investing specifically.

Traits Of Cask Investing

Protection From Inflation

This is especially useful now, with U.K. inflation at a 40-year high of 9%. This is why investors are turning to inflation-proof investment classes such as tangible assets like Scotch whisky.

Stability In Scotch

Tariffs

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Direct From The Distillery:

Distilleries tend to sell whisky casks when they are looking to raise funds without having to wait for the 3+ year period it takes their existing stocks to mature. As such it is mainly an action carried by newer younger distilleries who may be looking to invest in their brand for example.

This used to be the most common and inexpensive way to source casks. Distilleries would sell to prospective collectors at decent prices, however, now that market forces have exemplified the value casks can bring, prices have climbed. It is also worth noting that casks sourced in this manner are usually comparable with other stocks meaning there can be a lot of other similar whisky casks available when it comes to sale.

It is also hard to buy whisky casks from popular brands through this method. If you wanted to source a cask of Macallan in the 90s you would have paid north of £2000 and received a healthy return 20 years later. But Macallan casks are now only accessible by invitation as there is no necessity to release pre-aged stock. As such sourcing from a dealer grants more access to you as an investor.

The Promotion Of Investment Opportunities

Whisky, however, is no different fromother commodities, whose value rises or fallsaccording to supply and demand. The only certaintyabout owning a cask of Scotch is that it will loseroughly two per cent of the contents throughevaporation each year. Everything else in thiscontext is pure speculation.

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What Type Of Whisky Should I Invest In Bourbon Scotch

Scotland is the Bordeaux of the spirits world: it houses all the biggest names, has unparalleled heritage and provenance, and provides the most consistent return on investment. It is a very good place to start. The most expensive bottles ever sold all hail from Scotland, and limited edition Scotch bottlings rise in value like nothing else in the whisky world.

In 2011, a bottle of The Dalmore 62 was sold at Changi Airport in Singapore for a world record £125,000. It beat out a bottle of Dalmore 64 sold at Harrods for £120,000 months before. The Dalmore The most expensive whisky ever sold, meanwhile, is a 64 year old Macallan in a unique Lalique Cire Perdue crystal decanter, which was bought at auction in the US for $460,000.

What Should I Look For When Investing In Whisky

Nicholas Pollacchi, CEO at the New York Citybased whisky consultancy Whisky Dog, insists there are three fundamentals to bear in mind when picking an investment-grade whisky.

The first is Rarity. Investors and collectors love limited editions from established makers, and the miniscule supply of limited runs will ensure asking prices stay high. Next comes collectibility, which hinges on brand names and the great whisky houses. Macallan, Highland Park, Brora, Balvenie, Dalmore, Ardbeg and several others are all reliably collectible.

The final principle is collectible range. Often, distilleries will release a series of special editions that, across the years, form a collection. If you own each bottle in the series, the value of your haul will go up exponentially. Owners of the Glenrothes 1968, 1969, and 1970 Extraordinary Cask series, for example, have seen their portfolios rocket in value in recent years.

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Whats The Best Whiskey To Invest In

Here are 10 great whiskey bottles you can invest in right now:

• The Hakushu 18-Year-Old Single Malt Whisky
• Macallan 36 Year Old Single Malt Scotch Whisky Directors Special
• Johnnie Walker Blue Label Port Ellen Ghost and Rare Blended Scotch Whisky
• The Yamazaki 12-Year-Old Single Malt Whisky

What is the most sought after Scotch whisky?

The Macallan Fine and Rare 60 Year Old was bequeathed the status of the most expensive bottle of whisky ever sold at auction when in 2019 it sold for a record-breaking $1.9m at Sothebys in London.

How much is a Macallan 18 at a bar?

Common Macallan Whiskey Prices

What is Prince Charles Favourite whiskey?

Laphroaig is the only single malt distillery to have received this honour. Prince Charles is not a snob about how He drinks whisky. Although it is unlikely Charles would ever mix it with claret like his great grandmother, He will add a splash of water occasionally but generally prefers it neat.

Lifting The Curtain On Whisky Cask Investments

Whisky investments have proved to be a high performing asset class, with prices reaching new highs in recent years. For new investors looking to enter the whisky market, it can be a daunting proposition due to the relationship-based nature of acquiring sought after whiskies. VCL Vintners are uniquely positioned to guide clients new and experienced alike through the opportunities to invest in whisky, be that through individual & collectable bottles or entire casks.

Featured over the following pages is a comprehensive guide it will cover the world of whisky cask investments, educating and informing prospective investors on the process, history and market performance of liquid gold.

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Carol And William Ochsereview

Business and Racehorse owners

Carol & William Ochse are no strangers to doing things their own way. With backgrounds in racehorses and business, its no surprise that something non-traditional like cask whiskey ownership would appeal to them. Hear them explain why they were thoroughly convinced by Whiskey & Wealth Club.

A Personal Investment Opportunity

The Scotch WhiskyAssociation is not in aposition to offer any advice on the purchase or se/eof Scotch Whisky as an investment. Neverthe/ess, itbelieves that potential investors, in order to assessthese offers, should understand something of thestructure and operating methods of the ScotchWhisky industry

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An Introduction To Whisky As An Investment

According toThe Wealth Report from Knight Frank, rare whisky was the best performing collectable of the past decade, experiencing a meteoric rise in value of 58.6% per year over the past 10 years.

The Scotch whisky market is enormous. To the UK economy it is worth approximately £5 billion and accounts for around 25% of UK food and drinks exports with more than 90% of Scotch production sold abroad. Broadly speaking, the luxury whisky investment market is booming- genuinely rare and unrepeatable whiskies are what the market desires and as a result the potential for long-term growth is enormous as demand is increasingly high and supply finite.

VCL Vintners maintain regular contact with Scottish distillers, bottling agents and experienced brokers of Single Malt Whisky and relishes the opportunity to search out that once-in-a-lifetime cask or bottle. If it exists we will hunt it down!

The opportunities in whisky extend beyond that of Scotch alone. Japanese whisky represents an opportunity for astute investors, with Karuizawa whisky standing at the top of the global whisky market, with the brand rising most in value compared to any other whisky in the world since 2013.

Scotch Whisky Value Increases As Its Maturing

I think the main point that finally struck home with me that didnt really sink in before and helped me decide to invest in whisky is the first one . Just about ALL Scotch Whisky increases in value while its maturing. I knew this of course, but the implications never really hit home.

Once I opened an account with WhiskyInvestDirect, I started to do some research into this first point.

Rather than explain more here, let me show you a couple of screenshots:

The above charts are of different malt whisky prices from distillation to today. Youll notice there are blips but generally the lines all go up diagonally in a straight line. In all of the above charts, the price has doubled as the whisky aged. Some in as little as 4 years, some in 8 years, but the fact remains, the prices increased significantly.

This is due to the maturing of the whisky, and this is the sweet spot where bulk whisky investment is concerned. I say bulk investment because there is a large market for vintage bottled whisky of course, but you really need to be an expert in order to do well in that market.

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Whisky Market In 2019

These elements, plus an increase in interest from secondary markets in Asia, have meant that Scotch whisky is enjoying its best period on record. Rare Whisky 101s 2018 report shows that their Apex 1000 index increased by 30% and that the overall value of collectable bottles went up by 62% in the last year.

Additionally, the average bottle price jumped from £299 to £377 between 2017 and 2018 and the number of bottles sold for over £10,000 rose from 91 in 2017 to 265 in 2018. This suggests that now is the best time to get involved before initial investments climb any higher. The Rare Whisky report 2017 shows that investment isnt the main reason for second-hand whisky purchases for more than 80% of collectors. People buy whisky because they love drinking it and theyre willing to pay ever-increasing amounts of money for the pleasure. For those who are fans of whisky but more interested in the return on investment, the health of the market makes this the ideal time to start investigating rare and collectable bottles up for grabs.

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As Rare Whisky Prices Rise So Do Scams And Schemes

Increasing popularity of mobile investing capitalised upon by those offering ownership in casks and bottles

As the price of rare bottles and casks of Scotch whisky has risen in recent years, inevitably too have entrepreneurs trying to turn this into an investable opportunity.

While several companies offer single malt as a way to diversify portfolios – much like fine wine or commodities like gold – other schemes have a less clear grasp on the actual asset and some have been revealed to be fraudulent.

According to the most recent Knight Frank Index, the value of rare whisky has risen by 540% during the last decade faster than any other collectable luxury asset, such as watches, art or classic cars.

Collector and investor interest has also been piqued by recent headlines like a 1988 cask of The Macallan becoming the most expensive ever sold at auction – at just under $1.3m.

So Insider investigated the good, the digitally ethereal and the downright fraudulent, while asking what the industry and authorities can do to reassure investors.

My Scotch Whisky Investment Strategy

With the above information in mind, and speaking with other whisky investors Ive made contact with, as well as detailed discussions with the WhiskyInvestDirect team, I devised a strategy that I decided to use to make my first investment in whiskey.

As Im not a whisky expert, I use the first directive and diversify. Im going with a 70/30% malt/grain portfolio made up of more recent-term and mid-term whisky. That way I can spread the risk over many products, and also have the opportunity to hold them for a long time before bottlers/brands/distilleries come in to buy them back for retail sale. Of course I can still sell them on the open market before then if I want to, or if there is an opportunity to make a quick, large profit.

There is some information below which anyone who wants to put a lot of time into choices when they decide to invest in whisky, to squeeze every last penny of return can use. Personally I decided to buy a few of the whiskys offered directly by the platform, and then some other products from the secondary market using some of the information below. Ill keep adding more so I can build up a good portfolio over time as I invest in whisky and become more experienced.

There is also the opportunity to pre-order new stock before it arrives:

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Buying Something For Yourself Or Gifting Something To Another That Will Almost Certainly Increase In Value Would Be Quite A Wise Move In These Somewhat Uncertain Times One Sector That Has Been On A Tear Recently Is The Whisky Industry And In This Feature Were Looking At Why You Should Consider Investing In A Cask Of Scotch Whisky In 2022

Most of us know someone who claims or appears to have everything. However, its almost a certainty that the one thing they wont own is a cask of whisky. Over recent years, whisky investment has been booming, and during the past 18 months, weve seen staggering prices paid for some first batches from high-quality distilleries.

Our regular readers will likely remember the story we ran on Roger Parfitt, who made an incredible 4,600% return on some cask whisky he purchased 27 years earlier. It would be rather lovely to replicate what Roger did, wouldnt it?

Owning a cask of whisky is rare and something that special someone can boast about and enjoy for years to come, making it the perfect present for the person who has it all. Its versatile, too, as the recipient can choose whether to bottle it to drink or let it mature in taste over time. The choice is theirs.

Whether its a gift for the whisky lover in your life or for someone special in the family as an heirloom, the beauty of purchasing a cask is that besides being enjoyed when the time is right, it also increases in value year-on-year, giving the recipient greater choice in the future.

As a specialist whisky cask stockist based throughout the UK, Whisky Investment Partners exists to make purchasing whisky casks easier for investors. A recent customer survey revealed that one in four investors are looking to gift their portfolio to a friend or relative.

Read more articles and guides on wines and spirits here.