Are rare casks of Scotch whisky and bottles of single-malt Scotch worth the investment?

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Photo by: Jimmy G.

As with any investment, the brief response is dependent. The price of whisky barrels has risen steadily during the majority of the 21st century. However, a number of circumstances may influence the extent of this appreciation. Rare bottles of whisky also tend to gain in value, although this does not imply that every bottle of whisky will experience value increases, nor that these increases will occur at consistent rates.

According to the 2021 Knight Frank Luxury Investment Index, which monitored the auction results of bottles of Scotch single malt, the value of these rare whiskies climbed faster than that of automobiles, fine art, or fine wine. Despite the fact that whisky was a profitable investment during the first few months of the COVID-19 epidemic, it is uncertain if this will continue continuously. The market is still in its infancy. According to Andy Simpson of Rare Whisky 101, a study conducted in 2019 with the University of South Africa revealed that Scotch whisky as an investment has no association with conventional markets.

As a consequence, it might be impossible to anticipate the precise degree to which bottles of rare whisky or premium whisky casks will rise using more conventional investments. Nonetheless, there are a few traits that might increase the value of a bottle or barrel. The following is our guidance.

Can Whisky Be An Investment?

Yes, despite the danger of seeming basic, whisky may be an investment. In this regard, almost anything has the potential to be an investment. Mid-century furniture, antique books, and rare recordings may also be investments, but they may not necessarily produce returns that extend beyond one’s own delight.

Regarding whether whisky may be an investment that yields big financial returns, we have seen this in a number of instances. Nevertheless, it is impossible to say with certainty if a given bottle or cask would perform similarly to others that have been sold before. When considering barrels and bottles, you should examine the following parameters to maximize your return potential:

Types Of Whisky That Increases In Value

It is often believed that the older a whisky barrel is, the higher its value. However, you may be shocked to hear that this is not always the case. Age does play a substantial influence in determining the value of a barrel, but rarity and brand awareness are far more important.

These three factors are often linked. For instance, a premium brand manufactures barrels mainly for its own future goods. They are likely to create fewer casks than a major distillery producing unbranded casks, and even fewer of these premium casks will be made accessible to investors.

Although it is probable that the value of both branded and unbranded casks will have grown after 25 years, the branded barrels have a far higher potential for considerable appreciation. With the provenance of a well-known distillery and the scarcity of similar barrels on the market, a branded cask may have a greater chance of achieving a higher price at auction.

Additionally, a branded barrel has the particular benefit of being able to be sold back to the distiller who manufactured it. Demand for Irish whisky is expected to outpace output if both continue at their present rates, making mature barrels particularly desirable to distillers wishing to build up their own aged supplies. Whisky distillers may be compelled to repurchase old inventory at a premium.

If you’re interested in buying rare bottles of whisky as opposed to barrels, you’ll need to consider the following:

Has the whisky received any awards? 

When industry experts shower praise on a specific bottle of whisky, its value often increases significantly. Obviously, if you purchase a bottle before it has had a chance to gain recognition, it might be impossible to determine if its value will improve for this reason alone. In contrast, if you acquire a bottle after it has won a lot of accolades (and is no longer accessible from the distiller), you may wind up spending more initially, and the gain in value may not be as dramatic as if you had bought it when it was first released. 

Was the whisky manufactured to honor or remember a unique occasion? 

When whisky is manufactured to celebrate a significant event, such as a coronation, or a landmark barrel being bottled, high-end distillers often make limited-edition bottles that are works of art in their own right. They may partner with expert artisans or famous artists to produce custom packaging or include other characteristics of the time. These expensive whisky bottles are de facto collector’s items, and their associations with notable historical and aesthetic characteristics give them the further potential for price appreciation.

Does the whisky originate from a well-known brand? 

At this point, the majority of people are familiar with a “spirits nerd” with a fondness for sneaking away on weekends to raid small-town bottle stores for abandoned bottles of once-common spirits that are now strictly allocated. Buying bottles that you believe may become “whales” is not typically seen as the best investment idea. When choosing bottles, you should consider whether they were manufactured by a well-known premium brand. These brands will likely already have committed fan bases; these enthusiasts drive demand and may be interested in acquiring your bottle in the future to complete a set or cover a gap in their collections.

Is Whisky A Better Investment Than Gold?

Although much has been made of recent rare bottle sales and investing in “liquid gold,” it is impossible to determine if whisky is a better investment than gold. While the price of gold remained stable for many years, it has lately seen spikes and bigger fluctuations than it did for many years. Consequently, investors may now be more hesitant to enter the gold market.

Those who were considering purchasing gold bullion may find investing in whisky casks to be an intriguing alternative. Cask whisky, like gold bullion, is an asset-backed investment in an established market with historically steady returns. Nevertheless, the two investments vary in a number of ways.

While gold bullion may be acquired from financial organizations, brokerage companies are more likely to sell cask whisky. As a new alternative investment, the cask whisky business is currently mainly unregulated, and our dedication to compliance is shared by very few others. In addition, while investing in cask whisky via Whisky Cask Club, we take care of storage, insurance, and any extra regulatory costs. When purchasing gold bullion, you are responsible for providing your own storage and insurance.

Whether whisky is a better investment than gold is ultimately a matter of personal preference. Regardless of your financial preferences, it is essential to do extensive research and deal with a reliable organization if you decide to invest.