Why can there be such a significant return on whisky?
A decade ago, the whisky market looked very different than it does today. Back then, there was little demand for unique whiskies, so the return on whisky was virtually nil compared to the present day. Distilleries did not produce as much during this time because demand was low. To balance supply and demand, they stopped "over" producing. And this naturally has consequences for the current value of whisky.
Today, there is a significant and enduring scarcity to mention, which creates exceptionally interesting investment opportunities. Scottish single malt whisky ranks high among the most beloved investment topics with a high return, and this trend is expected to continue for many years.
Single malt whisky returns: value through scarcity. Demand for Scottish single malt whisky is high because older whiskies develop a flavour profile through years of maturation that younger whisky does not yet have. The value of whiskies older than 18 years often rises substantially as a result, and especially once they reach the age of 25, the whisky’s value can have increased considerably. A return is never certain: demand and prices can also disappoint.
How does the return on whisky work?
In the coming years, rising demand for Scotch single malt whisky is expected, which can keep the return on whisky attractive, although that is never certain. The sooner you invest, the sooner your cask reaches the age at which it is best suited for sale. But how exactly does the return on whisky work?
Scotch Whisky Investments is the ideal place to invest in whisky. You invest through us in quality whisky casks (and bottles) under the guidance of a wide range of market experts. The whisky casks are stored in Scotland, where they slowly mature and are eventually bottled. The quality of old whisky only improves with time. So, if you buy a 15-year-old cask, you can let it sit for another ten years until it reaches 25 years of age and is ready for sale with the potential for a very favorable return on the whisky.
Whisky returns through asset management. In addition to investing in a Scottish single malt cask, it is also possible to invest through asset management. Scotch Whisky Investments is happy to take care of this for you: our experts guide you through the selection, storage and management of your whisky portfolio. Investing this way is possible from €100,000, and a return on whisky is typically only realistic after a period of around ten years. This investment carries risk class 6 on a scale of 1 to 7 (AFM risk indicator): whisky is illiquid, requires a long investment horizon, involves costs, and a return is never guaranteed.
Investing and generating a return on whisky does not run through a whisky ETF: none exists. There is no listed whisky index fund that invests directly in physical whisky. Direct exposure to the whisky market therefore runs through physical casks or bottles, preferably via a specialised, licensed manager.
How can the value of whisky be determined?
Historical research into the price development of hundreds of whiskies sold between 1936 and 2007 shows an average annual increase in value of 6.6% over that period. That is an average over seventy years, and not a guarantee for an individual bottle or cask. We can say that the age of whisky is an important factor in how its value is determined.
Value determination of whisky by age. The longer whisky matures, the higher its value typically becomes. If you invest in a whisky cask today with twenty-year-old whisky, it is possible that it will be worth more than double at the age of 40, although that is never guaranteed. The older the whisky, the richer its flavour typically becomes, and the scarcer and more sought-after it gets.
Looking to pursue a return on whisky? Consult with an expert. Easily schedule a meeting with one of our advisors for a personal conversation about your investment, including the risks involved.
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