Wine, art, and now even non-fungible tokens (NFTs) are among the many different asset classes available. However, whisky casks are gaining traction in the market, with the Knight Frank Luxury Index reporting a 534 percent increase in value over ten years;
If you’re a private investor wanting a significant profit this is the place to be. The rare whiskey market improves year on year with age.
Due to the recent instability in the financial markets, investors have turned to more solid alternative investment possibilities, such as cask whiskey. What was formerly a very exclusive industry has now become a possibility – when we started the cask investing company, we had a vision to make investing in whiskey accessible.
Our goal was to make the market more accessible to individual investors looking to buy premium whiskey at ultra-discounted prices.
How Whiskey Investment Works
The process of manufacturing whiskey is both capital and labour intensive. Distilleries must wait three to 10 years after the whiskey has been aged before they can sell it for a profit. As a result, distilleries allow private investors to purchase casks that are still in the early stages of the maturing process, either directly or through an exclusive broker, to cover costs and raise capital.
Because of our purchasing power, investing through a broker brings benefits. We buy a considerable share of a distillery’s casks, allowing us to offer clients wholesale rates from some of Ireland’s and Scotland’s greatest distilleries and whiskey brands. When the investment has reached maturity, the investor can choose to bottle it or sell it for a profit of 10% to 30% per year, depending on the exit strategy and market conditions.
Before a new make spirit can be considered whiskey in Scotland, it must be allowed to mature for at least three years. The more time it takes to mature, the more valuable and appealing it becomes. The quality of the whiskey and how long an investor waits on their casks determine the return on investment.
Choosing Your Whiskey
It’s crucial to remember that not all whiskey is the same. Blends, which are less expensive whiskies, should be avoided by anyone wishing to invest. Blends typically comprise only 10-20% malt or pot still whiskey, lowering their value. It is usually preferable to invest in a single malt or single pot still that is 100 percent premium. It’s also crucial to invest in high-quality whiskey casks. Whiskey is considered good quality if it comes from a small-batch distillery – one of our distilleries, for example.
Exit Strategies
Investors have a range of alternatives once the whiskey has been aged for a few years. They can sell their casks to distilleries looking to repurchase, sell to other whiskey brands, independent bottlers, collectors, and other private investors, or, bottle it themselves.
Some individual investors prefer to buy mature stock to skip the protracted maturing phase. Clients who want to purchase a 15-year-old whiskey, for example, will pay a premium for a five-year-old and wait a shorter ten years to get a significant profit return.
