Investment in old and rare bottles of whisky is booming and the market is maturing at a rapid rate. Everyone will tell you whisky is an investment where you need specialist knowledge. Fortunately, The Spirits Embassy is on hand to provide some straightforward advice for all those looking to invest in whisky in 2019.
Why invest in whisky?
There has never been a better time to invest in whisky. For many whisky enthusiasts, leaving a bottle unopened for years at a time may feel like a mortal sin but, as the market is seeing unparalleled growth, holding onto your best expressions can offer better returns than wine, gold and even London property. Additionally, the Rare Whisky 101 Investor Report from 2017 shows that whisky lovers are in good company, with 40% surveyed saying return on investment was not the main reason they collected the spirit.
As an investment product, whisky holds a powerful position and, since the financial crash, a bottle has never returned less than 60% when sold after six years. For those interested in developing an investment portfolio, whisky also has the added benefit of being an attractive product even if the right returns can’t be found. Unlike wine or watches, the quality of an unopened bottle of whisky is unaffected by time, meaning it can be held indefinitely or enjoyed when the time is right should a suitable buyer not be found.
The global whisky investor market
Globally, the market has grown by 732% since 2013 and the average bottle price is continually on the rise, leaping from £299 in 2017 to £378 in 2018. 2018 also saw the first bottle sold at auction for over £1 million – a Macallan 1926 60-year-old unique, hand-painted bottle.
Rare Whisky 101 notes that, on average, whisky collectors are spending £10,000 a year to broaden their collections and the number of bottles sold at auction in the UK alone increased by 47% in 2018. In other markets, investors across Asia are beginning to see the value of whisky collections, with sales of Scotch increasing in China by 35% and in India by 44%. Additionally, Japanese whisky is one of the fastest developing regions, with a bottle of 50-year-old Yamakazi selling for more than $340,000 USD last year.
Across the world, high net worth individuals are drawn to the rich, diverse world of whisky, making it one of the most desirable yet accessible investment arenas around.
Distinct notes on Scotch
With growing markets in Japan, America, Canada and Taiwan, investors have many avenues to explore but, of course, none yet come close to the iconic status held by Scotch. The UK’s £35 bn trade deficit would be 11% wider without the contribution of Scotch whisky and the Japanese whisky industry is almost entirely dependent on imports of Scotch new spirit, buying over four-fifths of all Scotch under three years old since 2010.
Not only this, but Scotch whisky accounts for 25% of all UK food and drink exports and more than 36 bottles are shipped overseas every second from Scotland. Its existence as a deeply ingrained part of Scottish heritage and the vast diversity of its iterations across each region, distillery and even age expression have made Scotch the most desirable and valuable spirit on the planet.
Where to start with investing
To start building a reliable collection, five things to consider before making the first purchase:
1. Research the business
To be able to identify the best deals, when best to sell each bottle and where to find them, a comprehensive knowledge of the industry is highly advised. While Scotch is often the most desirable for investors, bottles from emerging markets such as Japan could offer interesting opportunities further afield.
2. Make a plan
While most whisky investors are also collectors and build collections for their own enjoyment as well as financial gain, planning exactly how to invest in the spirit is important. For example, while investing in bottles offers more straightforward, accessible gains, investing in cask whisky allows the investor more control over its creation and may offer more stable investments should the market behave unexpectedly.
3. Keep an eye out for special editions
Special edition and limited release whisky often has an inflated worth due to its scarcity, making these expressions much more reliable for investors, though more difficult to obtain. It’s also important, however, to remember that investing in quality whisky takes precedence over novelty.
4. Have a personal investment in whisky
Ultimately, the purpose of whisky is to be drunk. Many investors are also collectors because they love whisky and also know that, even if they can’t get the return they are looking for, they will always hold a quality product.
5. Keep to well-known distilleries
While seeking out craft whisky and hoping it appreciates in value can be a good practice with a large pay off, more cautious investors may want to stick with iconic distilleries to be assured that interest will remain consistent.
The best bottles 2019
Some of the best whiskies identified in 2019 include:
- Teeling 24-year-old vintage reserve whiskey – best single malt
- Nikka Taketsuru 25-year-old pure malt – best blended malt
- Suntory Whisky Hibiki 21-year-old – best blended whisky
- Dunville’s Three Crowns peated whiskey – best Irish blended
- Four Roses 130th-anniversary limited edition – best bourbon
Best distilleries for investment
Rare Whisky 101 monitors the performance of Scotch whisky distilleries both operating and silent, some of the most reliable and attractive for investment include:
- Port Ellen
- St Magdalene
- Dallas Dhu
Whisky is enjoying ever-increasing interest the world over and those willing to get involved could stand to make major gains for a relatively accessible product.
This article was provided by The Spirits Embassy, rare and collectable whisky and spirits marketplace in the UK.