Making money from ‘liquid gold’: investing in whisky 

It’s not just drinkers who have a taste for whisky – investors are also keen on adding the popular alcoholic spirit to their portfolio.

Described as “liquid gold”, whisky as an investment is “starting to live up to the name”, said Pavan Shamdasani in Prestige. There has been a “growing prominence” of whisky investing and as an asset, “on paper at least”, it has seen “dramatic gains”.

Whisky investment is “booming”, said Victoria Moore in The Telegraph. However you cut it, the “number of people around the globe who are interested in the spirit is huge.”

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A mainstream fixture at auctions

Starting as an “exclusive hobby among the well-heeled”, rare whisky collecting has become “an industry where the rarest bottles are sold at auction and traded on the secondary market”, Bloomberg reported.

Evidence of whisky’s growing popularity at auction came in early December when a four-decanter lot of 1950s Glenfiddich sold for £1,037,500. At the same event, which was organised by The Distiller’s Charity in collaboration with Sotheby’s, a bottle of The Balvenie 56 Year Old 1964 exceeded its estimate of £50,000-£80,000 and sold for £175,000.

Sotheby’s announced record sales of $132m (£971,000) at its wine and spirits auctions in 2021 – with spirits making up $21m (£15.4m) of the total. Led by rare Scotch whisky, this underlined the category’s “emergence as a mainstream fixture of the global auction market”, Decanter reported.

From “everyday” bottles at £250 to record-breaking auctions, the spirit has “never been hotter”, Moore said. However, there are some words of caution…

In a blog on Master of Malt, Ian Buxton said that the rapidly-expanding whisky investment market “can’t keep going up forever”. There are signs that the bust is coming soon. “You have been warned!”

‘Meeting market expectations’

As an alternative investment, whisky can be an “exciting option for those looking to diversify their portfolio”, said Katharine Swindells in Spear’s Magazine. According to Knight Frank’s 2021 Wealth Report, rare whisky saw a 478% growth in value over the past decade, and this was more than many other luxury items, including cars, wine, handbags and art.

While rare bottles may be the most popular way of collecting, a recent trend has also emerged in the sector – investing in whisky casks and in single-cask varieties. Despite the rarity of collectable bottles, it can be a relatively simple market to enter, through specialist stores, auctions or private sales. But buying whisky casks can be a “little more difficult”, said Michael Haldane on Moneyweb.

Purchasing a cask may offer a different proposition for investors, but due to whisky appreciating in price as the casks age “the asset has the ability to hold its value even in times of uncertainty”, Elite Wine & Whisky founder Steve Bishop told The CEO Magazine. “Cask values will keep on increasing, especially aged, rare and unique whisky, which will continue to outperform the standard single malts and keep meeting market expectations.”

Cask 88: the pursuit of rare and old whiskies

Operating from five offices around the globe, Cask 88 is an independent bottler and one such company that specialises in whole casks of whisky and single-cask varieties. Focusing on Scotch whisky, Cask 88 sources rare whiskies from renowned distilleries all across Scotland.

It was founded with the mission to “open the door to cask ownership, which would otherwise be closed to private individuals”, Cask 88 global sales director Patrick Costello told TheWeek.co.uk. From the point of purchase to becoming custodians of the cask, the company issues a cask ownership certificate, purchase agreement and also manages an investor’s portfolio.

Cask 88’s “pursuit of rare and old whisky” saw the company launch its “Unfiltered” series in 2021 – four rare single cask whiskies bottled straight from the cask. In the four-bottle collection there’s “no colouring, no filtering and no dilution”, hence the name, unfiltered.

The Glen Garioch 12 Year Old (230 bottles; 59.4% ABV) is a honeyed single malt of the Highlands that’s floral and fruity. Very representative of Islay whisky, the Caol Ila 13 Year Old (270 bottles; 57.7% ABV) is a Hebridean malt that’s sweet to start and has a smoky finish.

With a smokeyness and spiciness, the Ledaig 14 Year Old (230 bottles; 59.6% ABV) is a dessert-style single malt from the Isle of Mull that can be described as “a grown-up’s whisky”. And the oldest whisky in the Unfiltered series, the single grain North British 32 Year Old (215 bottles; 46.7% ABV) is fruity and warm on the palate with a very, very smooth finish. If you’re looking for the rare and unusual, this is a must-taste collection for any whisky fan.

Whisky cask ownership explained

The Unfiltered collection is “all about the liquid” and this has been the major focus since Cask 88 started trading in 2015. With whisky cask ownership becoming ever more popular for investors, Costello gave some insight to the growing trend:

How did the idea start for Cask 88?

“We began on this journey as many people do when they embark on the pursuit of cask ownership: in awe of the fact that we could have control over the future of a whole cask of whisky, and ultimately its bottling and packaging design. A cask of whisky is far too much whisky for one person to drink, and so we sought out ways to share the experience with others.

“From a pursuit that was very much a small scale, personal endeavour when we started trading in 2015, we are now facilitating experiences for our clients on a scale that would’ve been unimaginable to us just five years ago. Each year, we have seen the number of trades across our business more than double each year; against all odds, 2020 was our best-performing year yet. As one of the very first in this emerging market, we have unique insight into the private whisky cask market, and so have begun our own analysis of the cask sales data we have collected over the last five-plus years.”

How does investment for a cask compare to a bottle or collection?

“Whole casks of whisky hold a unique property that whisky in the bottle does not benefit from: the spirit in the wood matures naturally over time. The whisky draws a complex flavour profile from the wood, which means that it grows in taste, and value, as the years pass. Anyone familiar with single malt whiskies will know that an 18-year-old whisky, on the whole, is a smoother dram, and commands a higher price point, than a 10-year-old whisky, for example.

“Once a cask is bottled, the maturation process stops. It is really only demand that can then drive up the price of that whisky bottle. Cask whisky grows in prestige and value the longer it stays in wood, in addition to the vagaries of consumer demand. Those who have the patience to wait will be rewarded with a whole cask of aged whisky, which will be highly sought after, and mostly likely, quite valuable. Whereas individual bottles of Scotch whisky are more likely to bring short-term gains, whisky by the cask can bring benefits in the long run.”