Welcome back to FireFortuna! We’re delighted to have you here. In this in-depth series titled Investing For Beginners, I aim to unravel and simplify investment opportunities for those just starting out.
Today we are getting down to the brass tacks of whisky investing and laying out the entire process of investing in whisky, especially for beginners. We also confront the risks that accompany this unique investment option.
If you have been toying with the idea of investing in whisky, but unsure of where to get started: this guide is for you.
Is Whisky an Investment?
With the right know-how whisky can certainly be a valuable investment.
There are three main ways to invest in whisky:
- Whisky Bottle Investing
- Cask Investing
- Investing in Whisky stocks or funds.
In this article, we explore:
Table of Contents:
- Is Whisky an Investment?
- The Knight Frank Luxury Investment Index
- How Can I Invest in Whisky?
- Whisky Bottle Investing: This involves collecting rare bottles, in order to sell them later for a profit.
- Cask Investing:
- Investing in Whisky Stocks or Funds:
- The Pros and Cons of Whisky Bottle Investing
- The Pros of Whisky Bottle Investing
- The Cons of Whisky Bottle Investing
- Investing in Whisky Stocks or Funds
- How can I invest in a whisky cask?
- The Pros of Investing in Whisky Casks:
- The Main Whisky Cask Investment Brokers in The UK:
- Who is leading the boom in whisky investing?
- Is Whisky an Investment?
- Is Whisky an Investment?
- The Knight Frank Luxury Investment Index
- How Can I Invest in Whisky?
- Whisky Bottle Investing: This involves collecting rare bottles, in order to sell them later for a profit.
- Cask Investing:
- Investing in Whisky Stocks or Funds:
- The Pros and Cons of Whisky Bottle Investing
- The Pros of Whisky Bottle Investing
- The Cons of Whisky Bottle Investing
- Investing in Whisky Stocks or Funds
- How can I invest in a whisky cask?
- The Pros of Investing in Whisky Casks:
- The Main Whisky Cask Investment Brokers in The UK:
- Who is leading the boom in whisky investing?
Is Whisky an Investment?
If you’re a seasoned whisky drinker, but a novice investor you may be wondering how you can turn your fondness for ‘the water of life’ into a maturing asset. You wouldn’t be alone.
A Lloyds Private Banking report discovered that one in six UK investors holds a ‘hobby’ investment in their portfolios. “Investors are willing to part with large sums of money to invest in what they love”.
These are passion or hobby investments, also known as alternative assets. CIO, Lloyds Private Banking, Markus Stadlmann, points out, “In investment terms, work and play do not need to be mutually exclusive, and with the right investment approach it is possible to make your interests pay”.
Luxury tangible assets such as whisky, fine wine, jewellery, classic cars and artwork are categorised as ‘collectibles’ within the class of ‘alternative assets’. As well as the potential to grow in value over time, there is the added appeal of owning a physical, tangible asset with historical significance and intrinsic value.
Whisky has seen a hockey-stick rise in popularity amongst investors in the past twenty years.
Unsurprisingly, inflation and the volatility of the stock market have led to investors seeking safety in tangible assets with lower risk and historically high returns.
The Knight Frank Luxury Investment Index
Each year Knight Frank produces a Luxury Investment Index. This index presents data on luxury investment trends and predictions across alternative assets. In 2018 Knight Frank introduced rare Scotch whisky into their luxury investment index (KFLII)
The value of rare Scotch whisky bottles topped the luxury investment index as the best performing of all ‘passion investments’.
Rare scotch whisky bottles increased in value by 582% over 10 years, compared to the second most valuable investment, classic cars which grew in value by 258%.
Taken as a whole, with a sound understanding of the whisky industry and a solid insight into rare and fine scotch, whisky can make for a stellar investment, so this begs the question, how do I go about investing in whisky?
How Can I Invest in Whisky?
There are three main ways to invest in whisky.
Whisky Bottle Investing: This involves collecting rare bottles, in order to sell them later for a profit.
Cask Investing:
This entails purchasing whole or part of a cask directly from a distillery or an intermediary and holding for a period of time before selling.
Investing in Whisky Stocks or Funds:
This method involves purchasing shares from publicly traded companies that own well-known whisky brands. You can also invest in dedicated whisky funds including Platinum Whisky Investment Fund or Single Malt Fund.
The Pros and Cons of Whisky Bottle Investing
The Pros of Whisky Bottle Investing
- According to a 2022 report commissioned by Scottish investment bank Noble & Co, the value of rare single Scotch malt whisky increased by 21% in the first nine months of 2022. The report noted that growth was driven by bottles priced between £100 and £1,000 (US$1,208), which is typically purchased by younger investors as well as gift buyers.
- Even during the pandemic, investor demand and the value of certain single-malt whiskies have grown steadily,
- Overall, certain rare and fine whiskies can be an extremely valuable investment but expert knowledge and guidance is needed to navigate the whisky industry and source these rare bottles.
The Cons of Whisky Bottle Investing
- Like all investments, the value of whisky can rise and fall. As the Knight Frank Luxury Index highlights rare scotch whisky over £5,000 are currently underperforming the broader market at the moment.
- The next point is more of a reminder, rather than a con. As with bottle and whisky investing it’s important to remember that whiskey investment is a long-term asset that will not proffer immediate returns. Against the background of recession, inflation and the volatility of the traditional market, ‘collectibles, under the bracket of alternative assets, are seen by many as a potentially safe medium to long term investment.
- Rare Scotch whisky bottles are by far the most difficult bottles to source.
Kim Shackleton, of Braeburn Whisky warns, “Whisky bottle investing already has a well-established group of investors, so it can be difficult to break into it. Many of the best whisky bottles are already being held. You’re just hoping they become available to you down the road. If they do, you’ll be bidding against industry experts, often with very deep pockets”
- The value of rare and fine scotch whisky can be astronomical
And, you are competing against ultra-high net-worth individuals. Just last summer, a private female collector in Asia snaffled up a cask of Ardbeg distilled in 1975 for a record-breaking £16 million. Moreover, A new world record was set when a bottle of Macallan 1926 60-year-old Scotch whisky sold for £1.5 million (US$1.9m) at auction.
Beyond your own through research and tracking auctions, you would be well-advised to speak to a whisky valuer. Independent antiques consultant and whisky broker,Mark Littler has a great Youtube channel with some excellent advice for budding whisky investors.
Spears have also helpfully collated the best whisky investors for high net worth individuals in The UK.
A whisky expert can advise on:
- How to identify a fake bottle. Andy Simpson, whisky valuer and founder of Rare Whisky 101 points out, fakes and mislabelling of vintage malt and blended scotch is endemic in the whisky industry. In 2021 Inside Edition discovered a rare bottle of Colonel E.H. Taylor – Four Grain, a bourbon for sale at Acker wines, America’s oldest wine shop. After numerous tests, the bottle was found to be a fake. Rare and sought after bottles often need an expert eye.
- A whisky advisor will suggest the fair market value of the whiskey you want to buy and its anticipated appreciation
- The most sought-after whisky brands at auction include The Macallan, Yamazaki, Karuizawa, and Port Ellen, amongst others. These can be extremely difficult to source and an independent whisky expert can offer suggestions on where to get started based on your budget.
- A whisky adviser can also provide guidance on the various batches released and their characteristics.
- Your whisky expert will explain the best ways to store your prized whisky. Declan Leach of WhiskyShop has a few handy tips on how to store your prized whisky:
- Sunlight will cause the colour of your dram and its label to fade and so it is best to keep your bottle in a dark storage space.
- Keep your whisky in storage that maintains a temperature of around 15-20°C.
- humidity can degrade the label and/or box and so its vital to store your whisky in a dry place.
- Keep bottles of whisky upright. If the cork is constantly in contact with the spirit, the cork will fall apart over time. Keep a well-maintained cork by flipping the bottle on its side for a few seconds a couple of times each year
Investing in Whisky Stocks or Funds
Alcohol stocks are stocks of companies that produce and distribute beer, wine, and liquor. These stocks, commonly known as alcohol stocks, fall under the category of “sin stocks,” which includes stocks related to tobacco, gambling, marijuana, and weapons manufacturing, and are similar to a vice fund.
There are several publicly traded companies that own whisky brands.
To invest in whisky brands, consider publicly traded companies such as:
Diageo PLC (DEO), which owns renowned whisky brands like Johnnie Walker, Talisker, Lagavulin, and Oban.
Brown-Forman Corporation (BF.A) produces and distributes alcoholic beverages, including Jack Daniel’s Tennessee Whiskey, Woodford Reserve, and Old Forester.
Pernod Ricard SA (PDRDY) produces and distributes wine and spirits, including whisky brands Chivas Regal, The Glenlivet, and Ballantine’s.
Beam Suntory Inc., a subsidiary of Japanese multinational company Suntory Holdings Limited, owns popular whisky brands such as Jim Beam, Maker’s Mark, and Laphroaig.
Constellation Brands Inc. (STZ), an American producer and marketer of beer, wine, and spirits, also owns whisky brands such as High West, The Balvenie, and Glenfiddich.
Bear in mind that investing in whiskey stocks is subject to fluctuations in the whiskey market and company performance.
To reduce risk, you could consider investing in whiskey funds such as the Platinum Whisky Investment Fund and the Single Malt Fund.
The Platinum Whisky Investment Fund is one of the first whiskey funds created, but only accessible to accredited or high-net-worth investors.
The Single Malt Fund is the first publicly traded whiskey fund and available to private investors with a minimum investment of $1,245. These funds purchase collectible whiskeys and sell them later for a profit, paying dividends to investors.
As well as investing in rare and fine whisky, you may like to invest directly into a whisky cask.
How can I invest in a whisky cask?
- Do your research on the whisky industry and learn about the factors that can impact the value of whisky casks.
- Choose a reputable cask broker who has experience in the industry.
- Determine your budget for investing in a cask of whisky.
- Purchase a cask and review all the details of the purchase contract.
- Store your cask in a bonded warehouse under ideal conditions to ensure it matures properly.
- Work with your broker to find a buyer when your whisky has matured, or choose to bottle and sell it yourself.
The Pros of Investing in Whisky Casks:
Investing in whisky casks has become increasingly popular in recent years, and for good reason. Here are some of the pros of investing in whisky casks:
- High returns: Investing in whisky casks can provide high returns, as the value of aged, rare and collectible whiskies tends to increase over time. With careful selection, a well-informed investor can expect returns of 10-15% or more per annum.
- Tangible asset: Unlike stocks or other forms of financial investment, whisky casks are a tangible asset that you can see, touch and hold. This can provide a sense of security and satisfaction that may not be available with other types of investments.
- Low volatility: Whisky casks are not subject to the same market volatility as stocks, which can be affected by a wide range of factors including politics, natural disasters and company performance. The value of whisky casks tends to be more stable over time, and is less likely to experience sudden drops in value.
- Limited supply: The supply of aged, rare and collectible whiskies is limited, which can help to drive up their value. As the demand for whisky grows, the supply of aged and rare whiskies will continue to decrease, making them increasingly valuable.
- Hedge against inflation: Whisky casks can provide a hedge against inflation, as their value tends to increase over time. This can be especially important for investors looking to protect their wealth over the long term.
- Enjoyment: While the primary goal of investing in whisky casks is financial gain, there is also the added benefit of being able to enjoy the whisky itself. Many investors choose to hold onto their casks for several years or more, allowing the whisky to mature and develop its full flavour profile.
Investing in whisky casks can offer high returns and a tangible asset, but there are also some potential drawbacks to consider. Here are some of the cons of investing in whisky casks:
- Long-term investment: Unlike stocks or other financial investments, whisky casks require a long-term investment horizon. The minimum investment period for whisky casks is typically three years, but many investors hold onto their casks for a decade or more to allow the whisky to mature and increase in value. This long-term commitment may not be suitable for all investors.
- High upfront costs: The initial cost of investing in whisky casks can be high, with prices ranging from several thousand to tens of thousands of pounds per cask. This can be a barrier to entry for some investors, especially those who are just starting out.
- Storage costs: Once you invest in a whisky cask, you’ll need to store it in a suitable location. This can be costly, as you’ll need a temperature-controlled environment that’s free from light and vibration. Storage costs can add up over time, especially if you’re holding onto your casks for several years.
- Market volatility: While whisky casks are generally less volatile than stocks, the market for whisky can still experience fluctuations in value. The value of a particular whisky can be affected by a wide range of factors, including changes in demand, shifts in consumer preferences, and the release of new products by distilleries.
- Limited liquidity: Whisky casks are illiquid assets, meaning that they cannot be easily bought or sold. It can be difficult to find a buyer for your casks, especially if you’re looking to sell them before they have reached their full maturity. This lack of liquidity can make it harder to access the value of your investment when you need it.
- Counterfeit risk: The high value of rare and collectible whiskies makes them a target for counterfeiters. It can be difficult to determine the authenticity of a particular whisky, and even a small mistake can have a significant impact on its value. This risk can be mitigated by working with reputable brokers and ensuring that you only invest in verified products.
Overall, investing in whisky casks can offer a unique investment opportunity, but it’s important to weigh the potential benefits against the potential drawbacks before making a decision.
Antiques Consultant and Whisky Broker, Mark Littler advises would-be investors to abide by four simple rules when it comes to whisky investing.
- Acquire a sound understanding of the whisky industry
- Understand that casks are a long-term investment
- Pay a fair initial price for your cask of whisky
- Make sure you take full ownership at the warehouse level
Investing in whisky casks can potentially be profitable, but be sure to work with a reputable whisky investment broker to help guide you through the entire process.
The Main Whisky Cask Investment Brokers in The UK:
- Whisky Invest Direct: This platform allows investors to purchase and own whisky casks directly from distilleries, with the option to sell them back to the distillery or to other investors on the platform. This unique business model cuts out the middlemen typically involved in the whisky market, allowing investors to benefit from lower costs and potentially higher returns.
- The Whisky Corporation: This UK-based investment firm specialises in rare whisky casks
- The Whisky Barrel Investment Fund: This investment fund specialises in the acquisition and maturation of Scotch whisky casks for investors seeking exposure to the Scotch whisky industry. The fund purchases casks from a variety of Scottish distilleries and manages the maturation process in a bonded warehouse until the whisky reaches its peak age and value. Investors can purchase shares in the fund to gain exposure to the potential upside of the Scotch whisky market.
- The Vintage Malt Whisky Company: This company specializes in rare and vintage whiskies, offering investors the opportunity to purchase individual bottles or entire casks of rare single malts. They also offer a unique “Whisky Brokerage” service, which allows investors to sell their whisky to other collectors and investors through the company’s platform.
- The Rare Malt Whisky Company: This company specializes in sourcing and selling rare and collectible single malt whiskies from Scotland and around the world. They also offer a “cask broking” service, allowing investors to purchase and mature whisky casks with the potential for future profits.
- The Single Cask Ltd: This company specializes in bottling and selling rare single malt whiskies from independent distilleries in Scotland and around the world. They also offer a cask investment program, where investors can purchase a share of a whisky cask and receive a share of the profits when the cask is eventually bottled and sold.
- The Whisky Shop: With over 25 locations in the UK, The Whisky Shop is a leading retailer of Scotch whisky, offering a wide range of single malts, blends, and rare bottlings. They also offer a “Whisky Investment Service,” which helps investors build a portfolio of rare and collectible whiskies with the potential for future growth.
- The Whisky Market: This online platform allows investors to purchase and sell whisky casks from a variety of Scottish distilleries, with the option to bottle and sell the whisky in the future for a potential profit. They also offer a “Whisky Fund” for institutional investors seeking exposure to the Scotch whisky market.
- The Whisky Vault: This company specializes in rare and collectible whiskies, offering a wide range of single malts, blends, and limited edition bottlings from Scotland and around the world. They also offer a “Vault Club” membership, which provides access to exclusive whiskies and events.
- The Whisky World: This online retailer offers a wide selection of Scotch whisky, as well as other spirits and liqueurs. They also offer a “Rare and Collectible” section, featuring limited edition and hard-to-find bottlings for investors and collectors.
- The Whisky Exchange: With over 6,000 whiskies available for purchase, The Whisky Exchange is one of the largest retailers of Scotch whisky in the world. They also offer a “Fine and Rare” section, featuring rare and collectible whiskies for investors and collectors.
- The Old & Rare Whisky Company: This company specializes in rare and collectible whiskies, offering a wide range of single malts, blends, and limited edition bottlings from Scotland and around the world. They also offer a “cask investment” service for investors seeking exposure to the whisky market.
- The Whisky Broker Ltd: This company specializes in the purchase and sale of whisky casks
- The Masters of Malt: This UK-based company provides expert advice on the whisky market and offers clients the opportunity to invest in rare whisky casks.
- Rare Whisky 101: This whisky investment brokerage offers whisky cask investment, valuation, and auction services, and is known for their strong reputation in the industry.
- Cask Trade: This UK-based whisky investment broker specializes in the purchase and sale of whisky casks from top Scottish distilleries.
- The Scottish Whisky Auctions: This UK-based auction house specializes in rare and collectible whisky and offers clients the opportunity to invest in whisky casks while providing expert advice on the whisky market.
- The Whisky Broker Ltd: This company specializes in the purchase and sale of whisky casks
- Braeburn Whisky. The Braeburn team aim to offer a seamless process from acquisition to exit. “You’ll have your pick of casks that were hand-selected based on your budget, desired holding period and personal preferences” When you plan to exit, Braeburn provide access to an exclusive platform of investors, independent bottlers, and enthusiasts worldwide.
Taken as a whole, whisky can be a viable investment for those who are willing to do their research and work with reputable brokers.
While there are potential drawbacks, such as the risk of fraud and the need for proper storage, many investors see whisky as a long-term investment opportunity with the potential for high returns. However, it’s important to approach whisky investment with caution and to only invest what you can afford to lose.
With the right approach, whisky cask investment can be a profitable and rewarding venture.
Who is leading the boom in whisky investing?
A large proportion of the recent rise in whisky investing is by overseas buyers across the Far East and India who are investing in single-malts.
Millennials are also partly behind the growing popularity of whisky investing. Niall Brown, Senior portfolio director at Braeburn Whisky, points out, “We are receiving more and more interest from a younger audience with 20 per cent of clients in this age demographic currently on our books and the figure increasing.
Thank you for joining us today on FireFortuna for this insightful journey into the world of whisky investing. We hope this comprehensive guide, part of our “Investing For Beginners” series, has shed light on the process and potential risks, providing you with a clearer path towards your whisky investment journey.
Remember, the world of investments can be complex and unpredictable, but with the right knowledge and guidance, you can make informed decisions. Today, we’ve explored whisky as an alternative investment option. Tomorrow, who knows what unique opportunities we’ll uncover together?
So, stay tuned for more enlightening discussions on investment opportunities, designed with beginners in mind. Until then, continue to question, learn, and grow your investment portfolio. The world of investing waits for no one, so here’s to you taking the first step in your whisky investing journey. Cheers!
of whisky investing and laying out the entire process of investing in whisky, especially for beginners. We also confront the risks that accompany this unique investment option.
If you have been toying with the idea of investing in whisky, but unsure of where to get started: this guide is for you.
Is Whisky an Investment?
With the right know-how whisky can certainly be a valuable investment.
There are three main ways to invest in whisky:
- Whisky Bottle Investing
- Cask Investing
- Investing in Whisky stocks or funds.
In this article, we explore:
Table of Contents
Is Whisky an Investment?
If you’re a seasoned whisky drinker, but a novice investor you may be wondering how you can turn your fondness for ‘the water of life’ into a maturing asset. You wouldn’t be alone.
A Lloyds Private Banking report discovered that one in six UK investors holds a ‘hobby’ investment in their portfolios. “Investors are willing to part with large sums of money to invest in what they love”.
These are passion or hobby investments, also known as alternative assets. CIO, Lloyds Private Banking, Markus Stadlmann, points out, “In investment terms, work and play do not need to be mutually exclusive, and with the right investment approach it is possible to make your interests pay”.
Luxury tangible assets such as whisky, fine wine, jewellery, classic cars and artwork are categorised as ‘collectibles’ within the class of ‘alternative assets’. As well as the potential to grow in value over time, there is the added appeal of owning a physical, tangible asset with historical significance and intrinsic value.
Whisky has seen a hockey-stick rise in popularity amongst investors in the past twenty years.
Unsurprisingly, inflation and the volatility of the stock market have led to investors seeking safety in tangible assets with lower risk and historically high returns.
The Knight Frank Luxury Investment Index
Each year Knight Frank produces a Luxury Investment Index. This index presents data on luxury investment trends and predictions across alternative assets. In 2018 Knight Frank introduced rare Scotch whisky into their luxury investment index (KFLII)
The value of rare Scotch whisky bottles topped the luxury investment index as the best performing of all ‘passion investments’.
Rare scotch whisky bottles increased in value by 582% over 10 years, compared to the second most valuable investment, classic cars which grew in value by 258%.
Taken as a whole, with a sound understanding of the whisky industry and a solid insight into rare and fine scotch, whisky can make for a stellar investment, so this begs the question, how do I go about investing in whisky?
How Can I Invest in Whisky?
There are three main ways to invest in whisky.
Whisky Bottle Investing: This involves collecting rare bottles, in order to sell them later for a profit.
Cask Investing:
This entails purchasing whole or part of a cask directly from a distillery or an intermediary and holding for a period of time before selling.
Investing in Whisky Stocks or Funds:
This method involves purchasing shares from publicly traded companies that own well-known whisky brands. You can also invest in dedicated whisky funds including Platinum Whisky Investment Fund or Single Malt Fund.
The Pros and Cons of Whisky Bottle Investing
The Pros of Whisky Bottle Investing
- According to a 2022 report commissioned by Scottish investment bank Noble & Co, the value of rare single Scotch malt whisky increased by 21% in the first nine months of 2022. The report noted that growth was driven by bottles priced between £100 and £1,000 (US$1,208), which is typically purchased by younger investors as well as gift buyers.
- Even during the pandemic, investor demand and the value of certain single-malt whiskies have grown steadily,
- Overall, certain rare and fine whiskies can be an extremely valuable investment but expert knowledge and guidance is needed to navigate the whisky industry and source these rare bottles.
The Cons of Whisky Bottle Investing
- Like all investments, the value of whisky can rise and fall. As the Knight Frank Luxury Index highlights rare scotch whisky over £5,000 are currently underperforming the broader market at the moment.
- The next point is more of a reminder, rather than a con. As with bottle and whisky investing it’s important to remember that whiskey investment is a long-term asset that will not proffer immediate returns. Against the background of recession, inflation and the volatility of the traditional market, ‘collectibles, under the bracket of alternative assets, are seen by many as a potentially safe medium to long term investment.
- Rare Scotch whisky bottles are by far the most difficult bottles to source.
Kim Shackleton, of Braeburn Whisky warns, “Whisky bottle investing already has a well-established group of investors, so it can be difficult to break into it. Many of the best whisky bottles are already being held. You’re just hoping they become available to you down the road. If they do, you’ll be bidding against industry experts, often with very deep pockets”
- The value of rare and fine scotch whisky can be astronomical
And, you are competing against ultra-high net-worth individuals. Just last summer, a private female collector in Asia snaffled up a cask of Ardbeg distilled in 1975 for a record-breaking £16 million. Moreover, A new world record was set when a bottle of Macallan 1926 60-year-old Scotch whisky sold for £1.5 million (US$1.9m) at auction.
Beyond your own through research and tracking auctions, you would be well-advised to speak to a whisky valuer. Independent antiques consultant and whisky broker,Mark Littler has a great Youtube channel with some excellent advice for budding whisky investors.
Spears have also helpfully collated the best whisky investors for high net worth individuals in The UK.
A whisky expert can advise on:
- How to identify a fake bottle. Andy Simpson, whisky valuer and founder of Rare Whisky 101 points out, fakes and mislabelling of vintage malt and blended scotch is endemic in the whisky industry. In 2021 Inside Edition discovered a rare bottle of Colonel E.H. Taylor – Four Grain, a bourbon for sale at Acker wines, America’s oldest wine shop. After numerous tests, the bottle was found to be a fake. Rare and sought after bottles often need an expert eye.
- A whisky advisor will suggest the fair market value of the whiskey you want to buy and its anticipated appreciation
- The most sought-after whisky brands at auction include The Macallan, Yamazaki, Karuizawa, and Port Ellen, amongst others. These can be extremely difficult to source and an independent whisky expert can offer suggestions on where to get started based on your budget.
- A whisky adviser can also provide guidance on the various batches released and their characteristics.
- Your whisky expert will explain the best ways to store your prized whisky. Declan Leach of WhiskyShop has a few handy tips on how to store your prized whisky:
- Sunlight will cause the colour of your dram and its label to fade and so it is best to keep your bottle in a dark storage space.
- Keep your whisky in storage that maintains a temperature of around 15-20°C.
- humidity can degrade the label and/or box and so its vital to store your whisky in a dry place.
- Keep bottles of whisky upright. If the cork is constantly in contact with the spirit, the cork will fall apart over time. Keep a well-maintained cork by flipping the bottle on its side for a few seconds a couple of times each year
Investing in Whisky Stocks or Funds
Alcohol stocks are stocks of companies that produce and distribute beer, wine, and liquor. These stocks, commonly known as alcohol stocks, fall under the category of “sin stocks,” which includes stocks related to tobacco, gambling, marijuana, and weapons manufacturing, and are similar to a vice fund.
There are several publicly traded companies that own whisky brands.
To invest in whisky brands, consider publicly traded companies such as:
Diageo PLC (DEO), which owns renowned whisky brands like Johnnie Walker, Talisker, Lagavulin, and Oban.
Brown-Forman Corporation (BF.A) produces and distributes alcoholic beverages, including Jack Daniel’s Tennessee Whiskey, Woodford Reserve, and Old Forester.
Pernod Ricard SA (PDRDY) produces and distributes wine and spirits, including whisky brands Chivas Regal, The Glenlivet, and Ballantine’s.
Beam Suntory Inc., a subsidiary of Japanese multinational company Suntory Holdings Limited, owns popular whisky brands such as Jim Beam, Maker’s Mark, and Laphroaig.
Constellation Brands Inc. (STZ), an American producer and marketer of beer, wine, and spirits, also owns whisky brands such as High West, The Balvenie, and Glenfiddich.
Bear in mind that investing in whiskey stocks is subject to fluctuations in the whiskey market and company performance.
To reduce risk, you could consider investing in whiskey funds such as the Platinum Whisky Investment Fund and the Single Malt Fund.
The Platinum Whisky Investment Fund is one of the first whiskey funds created, but only accessible to accredited or high-net-worth investors.
The Single Malt Fund is the first publicly traded whiskey fund and available to private investors with a minimum investment of $1,245. These funds purchase collectible whiskeys and sell them later for a profit, paying dividends to investors.
As well as investing in rare and fine whisky, you may like to invest directly into a whisky cask.
How can I invest in a whisky cask?
- Do your research on the whisky industry and learn about the factors that can impact the value of whisky casks.
- Choose a reputable cask broker who has experience in the industry.
- Determine your budget for investing in a cask of whisky.
- Purchase a cask and review all the details of the purchase contract.
- Store your cask in a bonded warehouse under ideal conditions to ensure it matures properly.
- Work with your broker to find a buyer when your whisky has matured, or choose to bottle and sell it yourself.
The Pros of Investing in Whisky Casks:
Investing in whisky casks has become increasingly popular in recent years, and for good reason. Here are some of the pros of investing in whisky casks:
- High returns: Investing in whisky casks can provide high returns, as the value of aged, rare and collectible whiskies tends to increase over time. With careful selection, a well-informed investor can expect returns of 10-15% or more per annum.
- Tangible asset: Unlike stocks or other forms of financial investment, whisky casks are a tangible asset that you can see, touch and hold. This can provide a sense of security and satisfaction that may not be available with other types of investments.
- Low volatility: Whisky casks are not subject to the same market volatility as stocks, which can be affected by a wide range of factors including politics, natural disasters and company performance. The value of whisky casks tends to be more stable over time, and is less likely to experience sudden drops in value.
- Limited supply: The supply of aged, rare and collectible whiskies is limited, which can help to drive up their value. As the demand for whisky grows, the supply of aged and rare whiskies will continue to decrease, making them increasingly valuable.
- Hedge against inflation: Whisky casks can provide a hedge against inflation, as their value tends to increase over time. This can be especially important for investors looking to protect their wealth over the long term.
- Enjoyment: While the primary goal of investing in whisky casks is financial gain, there is also the added benefit of being able to enjoy the whisky itself. Many investors choose to hold onto their casks for several years or more, allowing the whisky to mature and develop its full flavour profile.
Investing in whisky casks can offer high returns and a tangible asset, but there are also some potential drawbacks to consider. Here are some of the cons of investing in whisky casks:
- Long-term investment: Unlike stocks or other financial investments, whisky casks require a long-term investment horizon. The minimum investment period for whisky casks is typically three years, but many investors hold onto their casks for a decade or more to allow the whisky to mature and increase in value. This long-term commitment may not be suitable for all investors.
- High upfront costs: The initial cost of investing in whisky casks can be high, with prices ranging from several thousand to tens of thousands of pounds per cask. This can be a barrier to entry for some investors, especially those who are just starting out.
- Storage costs: Once you invest in a whisky cask, you’ll need to store it in a suitable location. This can be costly, as you’ll need a temperature-controlled environment that’s free from light and vibration. Storage costs can add up over time, especially if you’re holding onto your casks for several years.
- Market volatility: While whisky casks are generally less volatile than stocks, the market for whisky can still experience fluctuations in value. The value of a particular whisky can be affected by a wide range of factors, including changes in demand, shifts in consumer preferences, and the release of new products by distilleries.
- Limited liquidity: Whisky casks are illiquid assets, meaning that they cannot be easily bought or sold. It can be difficult to find a buyer for your casks, especially if you’re looking to sell them before they have reached their full maturity. This lack of liquidity can make it harder to access the value of your investment when you need it.
- Counterfeit risk: The high value of rare and collectible whiskies makes them a target for counterfeiters. It can be difficult to determine the authenticity of a particular whisky, and even a small mistake can have a significant impact on its value. This risk can be mitigated by working with reputable brokers and ensuring that you only invest in verified products.
Overall, investing in whisky casks can offer a unique investment opportunity, but it’s important to weigh the potential benefits against the potential drawbacks before making a decision.
Antiques Consultant and Whisky Broker, Mark Littler advises would-be investors to abide by four simple rules when it comes to whisky investing.
- Acquire a sound understanding of the whisky industry
- Understand that casks are a long-term investment
- Pay a fair initial price for your cask of whisky
- Make sure you take full ownership at the warehouse level
Investing in whisky casks can potentially be profitable, but be sure to work with a reputable whisky investment broker to help guide you through the entire process.
The Main Whisky Cask Investment Brokers in The UK:
- Whisky Invest Direct: This platform allows investors to purchase and own whisky casks directly from distilleries, with the option to sell them back to the distillery or to other investors on the platform. This unique business model cuts out the middlemen typically involved in the whisky market, allowing investors to benefit from lower costs and potentially higher returns.
- The Whisky Corporation: This UK-based investment firm specialises in rare whisky casks
- The Whisky Barrel Investment Fund: This investment fund specialises in the acquisition and maturation of Scotch whisky casks for investors seeking exposure to the Scotch whisky industry. The fund purchases casks from a variety of Scottish distilleries and manages the maturation process in a bonded warehouse until the whisky reaches its peak age and value. Investors can purchase shares in the fund to gain exposure to the potential upside of the Scotch whisky market.
- The Vintage Malt Whisky Company: This company specializes in rare and vintage whiskies, offering investors the opportunity to purchase individual bottles or entire casks of rare single malts. They also offer a unique “Whisky Brokerage” service, which allows investors to sell their whisky to other collectors and investors through the company’s platform.
- The Rare Malt Whisky Company: This company specializes in sourcing and selling rare and collectible single malt whiskies from Scotland and around the world. They also offer a “cask broking” service, allowing investors to purchase and mature whisky casks with the potential for future profits.
- The Single Cask Ltd: This company specializes in bottling and selling rare single malt whiskies from independent distilleries in Scotland and around the world. They also offer a cask investment program, where investors can purchase a share of a whisky cask and receive a share of the profits when the cask is eventually bottled and sold.
- The Whisky Shop: With over 25 locations in the UK, The Whisky Shop is a leading retailer of Scotch whisky, offering a wide range of single malts, blends, and rare bottlings. They also offer a “Whisky Investment Service,” which helps investors build a portfolio of rare and collectible whiskies with the potential for future growth.
- The Whisky Market: This online platform allows investors to purchase and sell whisky casks from a variety of Scottish distilleries, with the option to bottle and sell the whisky in the future for a potential profit. They also offer a “Whisky Fund” for institutional investors seeking exposure to the Scotch whisky market.
- The Whisky Vault: This company specializes in rare and collectible whiskies, offering a wide range of single malts, blends, and limited edition bottlings from Scotland and around the world. They also offer a “Vault Club” membership, which provides access to exclusive whiskies and events.
- The Whisky World: This online retailer offers a wide selection of Scotch whisky, as well as other spirits and liqueurs. They also offer a “Rare and Collectible” section, featuring limited edition and hard-to-find bottlings for investors and collectors.
- The Whisky Exchange: With over 6,000 whiskies available for purchase, The Whisky Exchange is one of the largest retailers of Scotch whisky in the world. They also offer a “Fine and Rare” section, featuring rare and collectible whiskies for investors and collectors.
- The Old & Rare Whisky Company: This company specializes in rare and collectible whiskies, offering a wide range of single malts, blends, and limited edition bottlings from Scotland and around the world. They also offer a “cask investment” service for investors seeking exposure to the whisky market.
- The Whisky Broker Ltd: This company specializes in the purchase and sale of whisky casks
- The Masters of Malt: This UK-based company provides expert advice on the whisky market and offers clients the opportunity to invest in rare whisky casks.
- Rare Whisky 101: This whisky investment brokerage offers whisky cask investment, valuation, and auction services, and is known for their strong reputation in the industry.
- Cask Trade: This UK-based whisky investment broker specializes in the purchase and sale of whisky casks from top Scottish distilleries.
- The Scottish Whisky Auctions: This UK-based auction house specializes in rare and collectible whisky and offers clients the opportunity to invest in whisky casks while providing expert advice on the whisky market.
- The Whisky Broker Ltd: This company specializes in the purchase and sale of whisky casks
- Braeburn Whisky. The Braeburn team aim to offer a seamless process from acquisition to exit. “You’ll have your pick of casks that were hand-selected based on your budget, desired holding period and personal preferences” When you plan to exit, Braeburn provide access to an exclusive platform of investors, independent bottlers, and enthusiasts worldwide.
Taken as a whole, whisky can be a viable investment for those who are willing to do their research and work with reputable brokers.
While there are potential drawbacks, such as the risk of fraud and the need for proper storage, many investors see whisky as a long-term investment opportunity with the potential for high returns. However, it’s important to approach whisky investment with caution and to only invest what you can afford to lose.
With the right approach, whisky cask investment can be a profitable and rewarding venture.
Who is leading the boom in whisky investing?
A large proportion of the recent rise in whisky investing is by overseas buyers across the Far East and India who are investing in single-malts.
Millennials are also partly behind the growing popularity of whisky investing. Niall Brown, Senior portfolio director at Braeburn Whisky, points out, “We are receiving more and more interest from a younger audience with 20 per cent of clients in this age demographic currently on our books and the figure increasing.
Thank you for joining us today on FireFortuna for this insightful journey into the world of whisky investing. We hope this comprehensive guide, part of our “Investing For Beginners” series, has shed light on the process and potential risks, providing you with a clearer path towards your whisky investment journey.
Remember, the world of investments can be complex and unpredictable, but with the right knowledge and guidance, you can make informed decisions. Today, we’ve explored whisky as an alternative investment option. Tomorrow, who knows what unique opportunities we’ll uncover together?
So, stay tuned for more enlightening discussions on investment opportunities, designed with beginners in mind. Until then, continue to question, learn, and grow your investment portfolio. The world of investing waits for no one, so here’s to you taking the first step in your whisky investing journey. Cheers!
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