For many years, whisky has been appreciated as a drink and a lucrative investment opportunity. Investors who choose to invest in high-quality, rare whisky have the potential to achieve returns that outperform the market.
Rare Whisky (RW) 101’s Apex 1000 index tracks the top collectible whiskies and has achieved gains of over 415% since 2013. This performance contrasts the roughly 178% return from the S&P 500 during the same term, highlighting the increasing interest in whisky investing as an alternative asset.
The fundamental laws of supply and demand govern the functioning of investment-grade whisky. Well-known names like Macallan, Glenfiddich, and Yamazaki have cemented their position as formidable players in the industry, earning accolades for crafting remarkable liquors.
The limited production capacity of these brands in comparison to larger distilleries leads to an inadequate supply to meet the market’s demand. Consequently, the scarcity of these whiskies boosts their value as assets suitable for investment.
The characteristics of a 50-year-old scotch that excite whisky enthusiasts can only be acquired over time. Following distillation, these exceptional and sought-after whiskies are aged for several decades in barrels to cultivate the distinct and extraordinary qualities that make them highly coveted.
Due to their exceptional quality and one-of-a-kind flavors, limited edition bottlings and aged whiskies are in high demand. As the already scarce supply of these whiskies dwindles over time, both bottles and casks become subject to rising prices.
Over the last 12 months through February 2023, the RW Japanese 100 Index, designed to monitor 100 of Japan’s most prominent collectible bottles, has experienced an increase of 7.35%, while its lifetime gains since the start of 2015 have been 579.07%.
The collectability of Japanese whiskies reaches new heights, with the most sought-after bottles being exceedingly rare, such as certain Karuizawa whiskies that may only appear on the market every few years.
Whiskies from Scotland, Japan, and the United States are among the most coveted. The single malt Scotch whiskies produced by renowned distilleries such as The Macallan, Ardbeg, and Bowmore are particularly popular with investors.
The RW Bowmore Rarities Index, which monitors bottles from the numerous aged distillery in Islay, Scotland, has risen by 433% since 2013, making these UK whiskies a top investment choice. However, in recent times, limited-edition or rare Japanese whiskies like Yamazaki, Hibiki, and Karuizawa have demonstrated superior performance and have become the favored option.
After ceasing production in the early 2000s, the brand has acquired a near-mythical following, with remaining bottlings being highly sought-after by collectors and investors alike.
The RW 101 Karuizawa index has risen by nearly 12.5% over the past year, demonstrating the enthusiasm for this brand, which has recently been revived with the rehiring of several of the original staff.
The stock market in the United States remains volatile due to uncertainty surrounding the economy’s direction. The recent banking crisis involving SVB and Credit Suisse has further complicated matters, driving interest in diversifying into alternative assets. As a result, it is estimated that alternative investments under management will soar to $17.2 trillion by 2025.
Opting for a professional approach to investing in whisky can yield better long-term outcomes than just storing a few bottles in your home cellar. Vint, an investment platform, offers an alternative for investors to purchase securitized offerings of whisky shares rather than buying a whole cask or bottle on their own, which can cost tens of thousands of dollars.
This makes securitized shares a more practical and accessible option for investors seeking returns without significant capital investments.