Investing in whisky today is one of the newest and most profitable alternative investments one can make. Beyond monetary profit, it’s an adventurous and fun investment. From bottles to casks, auctions records are broken every other month. The Macallan shines the most, most recently breaking the world record of most expensive bottle sold at auction. The final price was over $2 million USD! Between the legendary Scottish single malts, elusive Japanese whiskies, exciting new bourbons in the United States and the growth of whisky in emerging countries worldwide; the global industry is booming and the lesser known yet hugely profitable sector of cask investment has yet to reach its peak.
Old Macallan casks, Diageo’s Casks of Distinction program, the Dalmore cask program, and many other brands trade large volumes of casks both on auctions and privately, with prices rising continuously. After all, casks are a simple, straightforward investment, yet a hugely profitable one. Didn’t know? Let’s delve in.
Why Invest In Casks?
Across the globe, whisky bottles are by far the most collected category. Cask trading is still undiscovered by most, while others fear and doubt it due to a lack of information and understanding. This, however, works well, as there is room for expansion, rapid growth, and steep prices increases, as the bottle trading market grows more saturated.
One main point to remember: Bottles do not continue to mature, casks do.
When purchasing a 4-year-old cask of whisky today, know that this cask will be 14 years old in 10 years. A 10-year-old bottle today will still be a 10-year-old bottle in a decade. This point is key, as the whisky will continue to age and grow more valuable each and every year it remains in wood. This, in turn, makes cask investment much more appealing. But that’s not all; here are some key points proving why cask investing is the smart choice.
Cask trading is free of many issues the surround bottle trading.
- No Shipping: Shipping bottles is always a difficult process, but your casks will remain in the distillery warehouse, safe and sound, without needing to be moved around.
- No Personal Storage: Storage space can be a problem, but not for casks. The warehouse staff will maintain and monitor your cask portfolio safe in a climate-controlled, organized environment.
- No Price Comparisons: Unlike bottles, casks vary in quality and taste, so prices fluctuate. When trying to monetize your investments, you won’t be sent low prices and links to other sales. All casks are different.
- No Excuse Not To: Your casks are lying in Scotland, Japan, or the US. So, you have no excuse not to visit, sample them, and go on an amazing whisky adventure across the globe!
The Steps To Buying Your Own Cask
Many assume the cask purchasing process is too complicated. Well, they’re wrong. Purchasing a cask is an easy, straightforward process, and we’ll be with your every step of the way.
- 1. Cask Selection: You must find the cask investment opportunity and analyze the reasons why said cask is worth the investment. The story, history, and growth of the brand is key, and this must be presented to you. This, again, shows the importance of the company you work with.
- 2. Acquisition: Once you’ve selected a cask, payment is made within a certain time period, and documents (invoice & certificate) are sent to you to prove your ownership of the cask. You now officially own a cask of whisky.
- 3. Storage & Insurance: The company you work with will run you through the annual storage fees and insurance policies prior to payment, this way there are no surprises in the future. Some companies, like CaskX, include a storage plan with each purchase in order to allow your whisky to mature to a point optimal for sale, thus ensuring higher returns.
- 4. Evaluate Risks: Before purchasing a cask, buyers should be fully aware of the risks of cask purchasing. After all, casks are wooden containers and while the warehouse staff are impeccable at monitoring them, a small number of casks are prone to leaking and loss.
Exit Strategies Explained
After holding on to your cask portfolio for a decade or so, it will be time to monetize your investments. Across the industry, there are 2 main options when it comes to selling off your casks, and we’ll be there during every step of the way.
Option 1 – Sell Cask: This option is the fastest and easiest. Re-sell your casks. This is when the company you bought from can help you sell your cask to investors, collectors, or a company. An independent bottler, retailer, or bar may bottle your casks for sale, or an investor may hold on to it for another decade. This process is straightforward and will deliver a large one-off payment in terms of profit.
Option 2 – Bottle Cask & Sell: This option works better for a brand or company within the industry that chooses to bottle their casks and sell to individuals, bars, and stores. This process is lengthier but stands to deliver more benefits beyond monetary ones. These bottlings can help build a whisky brand and audience, or help commemorate a milestone or major event with a bespoke whisky bottling.
Every client is different, and the company you work with should stand by and work with you in finding the perfect exit strategy for you.
From benefits and risks to profitable strategies, each point above should help you on your cask-investment journey. Over time you’ll learn more about the industry and be able to make quick, informed decisions on your own. Watch our blog and educational videos to stay up to date with the industry trends and, in general, slowly develop your love for whisky.
If it’s an investment you really love, the entire journey will be that much more enjoyable.
