Whisky investing guide

Whisky investing guide

The prices of whiskey have been growing for the past few years as more and more people started to purchase valuable and tasty drinks such as wine and whisky. There are two reasons why those people started collecting whiskeys. One side started stockpiling them with the idea to drink them for their enjoyment, while the other side see these whiskeys as a profitable investment opportunity.

When Glenrothes Distillery released their oldest whiskey to date, Glenrothes 50-Year-Old, only fifty bottles were available globally. These bottles were sold for $35,000 each. This is one example of investment-grade whiskey and more are starting to show up on the market as the demand for them has increased.

“Previously the industry was overrun by avid collectors and enthusiasts; however, we noticed that due to the popularity of alcohol investment increasing, as well as a vast amount of media attention arising, the market has been opened up to the everyday retail investors” - Steve Bishop

Things to Know About Investing in Whisky

  • The value of whiskey is determined by quality and rarity
  • There are two different ways we can invest in whiskey. Either buy bottled whiskey or buy barrels and age them yourself
  • The best way to invest in whiskey is to build up a good collection
  • Most sought-after whiskeys are from extinct distilleries

Investing in Whisky

Investing in alcohol as well as investing in watches is not a new concept. People have been investing in alcohol such as wine for a very long time, with some bottles selling for over $500,000. But investing in whiskey is a somewhat new concept. People have been paying big money for whiskey for a long time, but generally, they were buying it for their enjoyment. 

Investment-grade whiskies are those whose prices are expected to grow. What gives the whiskey its price is quality and age. The biggest demand is for Scotch and Japanese whiskey, but recently American and Irish whiskeys started to show up in some prestigious collections. 

"..we can see that people move into not only gold and crypto, but art markets, classic car markets, we've seen the rise of whiskey as an
investment too, we've seen it in rare brandies, fine wines; we see it
across the world as people look for these incredibly rare assets where there is always a demand.." - Raoul Pal

Ways to Invest in Whisky

In general, there are two ways we can invest in whiskey. One is where we buy bottled whiskeys which are sought after. Another option is to invest in recently produced whiskey and cask them to age in order to sell it for a profit later.

Investing in bottled whiskey

This is the most obvious way to invest in whiskey and in any alcohol in general. Here investors purchase high-end and sought-after bottled whiskey and after a few years when their prices go up they are sold for profit.

When choosing this strategy, we need to know which whiskey is investment-worthy and has the potential to appreciate in value. Usually, those whiskeys are scarce whiskeys from famous distilleries or whiskeys from distilleries that went out of business.

Also, scarcity of supply does not guarantee that whiskey is investment-grade. Quality is another factor we have to consider when choosing which whiskey to buy. If the bottled whiskey in question is nothing special right now, it will never become something special. Because of this, it is recommended to stick with famous distilleries which are known to produce good quality whiskey.

A great example of a successful bottled whiskey investment is Macallan's old vintage 18-year-old whiskey which in 2015 was selling for $25,000 and just one year later prices went up to $61,000 which was a 142% increase.

Investing in the whiskey which we mature ourselves

This is an entertaining way to invest in whiskey. Here we invest in whiskey that we mature ourselves. We can purchase recently distilled ones at a cheaper price and then cask them ourselves and age them as long as we like.

Whiskeys tend to improve in quality if they are left to age in barrels for a long period of time. This gives us the opportunity to choose how long we want to age our whiskey before bottling it and selling it for profit.

But compared to the simple way of buying bottled whiskey, there are some additional costs that come with aging whiskey ourselves. Storage is one example of those additional costs. Barrels need to be kept in a safe and good condition and if we don’t have space for them and expertise to take care of it, we need to pay distilleries and storage facilities additional fees for them to store the whiskey for us. Another cost is bottling. We have the option to sell whiskey without bottling it, but if we think that selling them in bottles is the right choice, there are additional costs as well.

This process can be really profitable. According to Whiskey Direct, the average return on a 4-year-old aged cask after all the additional costs is around 50%.

What to Pay Attention to When Investing in Whisky

Just like any investment, there are many different things we have to consider and research before making a decision to invest in whiskey. 

Research the whole whiskey market

Whenever we join a new ecosystem, we need to research the market. The whiskey world is filled with many different details and nuances. One of the best things to look out for is market indicators. Consider what factors might drive the whiskey price up and down other than its quality and scarcity. Also, information about famous distilleries is something that will come in handy when determining which whiskey is worth investing in.

Look for available and rare bottles

One of the biggest challenges that come with investing in bottled whiskey is that most thought-after whiskeys are really hard to come by. Some of the rarest bottles usually sell at private auctions, or they are sold by distilleries directly to customers. Those customers are usually ones who have good connections and have been in the whiskey market for a long time.

But with developments in the e-commerce market finding those rare whiskeys has become somewhat easier. There is a big selection of online marketplaces where you can find exclusive sought-after whiskeys available for purchase. But when dealing with big money online we need to be careful so as not to be tricked into purchasing knock-off products.

Learn about auction houses

Just like any rare collectible asset, the most popular whiskeys are sold in different auction houses. But it was not like this just a few years ago. Most of the auction houses that deal with alcohol had their focus solely on wine. The world's biggest auction house that deals with alcohol, Sotheby’s exclusively dealt with wine and occasional sales of spirits here and there. But today 18-19% of their portfolio consists of spirits such as whiskey and cognac. 

Because of this, we need to study each auction house in detail. What they deal with, which distillery products are sold there, how to attend these auctions, and other relevant information.

Collect whiskey collections

Whiskeys tend to sell better if they are sold as a collection. There are many different types of collections you can put together. They can be collections of the same distillery, collections of whiskeys that share a similar history, and many others things. 

Most of the high-price sales that happened in auction houses were the sales of collections, as people who have money and are enthusiastic about whiskey tend to pay high prices for collections, as it saves them time, and they don’t have to look for many different bottles one by one.

Who are potential buyers

The most straightforward answer to this question is Asia. Bidders on these auctions usually come from Europe, Asia, and North America. But according to auction house data, Asian buyers tend to score 89% of the time. This shows that the recent rise in the spirits market has a close connection with the Asian market, and with the Chinese in particular. 

Because of this, it won’t be a bad idea to take a look at how the Asian market is doing. This will help to determine the buying power of the market.

Risks That Come With Investing in Whisky

Investing in whiskey comes with some risks. We need to have a better understanding of these risks in order to minimize them and better protect our investment.

When we invest in bottled whiskey, one risk that is associated with it, is fake bottles. As the market grows and more money starts to flow into it, people started to make fake bottles of whiskey that look authentic and will trick every investor who does not have a good eye and enough expertise.

Another risk that comes with investing in bottled whiskey is the market losing interest in the whiskeys you invested in. Generally, if you invest in whiskeys from famous distilleries the risk of it losing value is low, but there is always a possibility of the market losing interest in certain whiskey.

Investing in casked whiskeys is generally a safer option and has many different exit options. But there are still some risks that come with it. For example, theft and damage to the casks is a common risk that needs to be taken into consideration. When making an investment, never be greedy and always insure your whiskey.

We also need to look after the casks. If we left casks without any attention for a long period of time, there is a possibility of them going bad. Whiskey evaporates faster than water and in order for whiskey to be considered whiskey, it needs to maintain at least 40% ABV (alcohol by volume). Because of this, we need to take good care of them and don’t leave them unattended for a long time.

Rare Whisky 101 - Rare Whisky Icon 100 Index

One of the best places to go if we want to learn about the market and which whiskey is selling most right now is the Rare whiskey icon 100 index by Rare Whisky 101. This index tracks the most desired 100 whiskeys.

Whisky Index.png

The Most Expensive Whiskeys Ever Sold

There have been many whiskey sales that might leave you confused as to why people are paying such a high price for just an alcoholic drink. Macallan is a distillery that is dominating the market for high-end whiskeys and we have seen many Macallans breaking record sales. Here we will present you with some of the most expensive sales of whiskey to date.

The Macallan Red Collection - $975,756

This collection of Macallan six whiskeys went on sale at Sotheby’s 2020 London auction. The initial valuation and expected selling price of the collection were estimated to be around $259,000. But as soon as the bidding started, many different buyers started a fierce bidding war which caused the final sell price to almost quadruple from the initial estimate and reached $975,756. 

This collection featured six highly aged Macallan whiskeys. Two of those whiskeys were the oldest Macallan whiskeys, one 74 years old and the other 78 years old. These alongside the fact that the collection was signed by Spanish artist Jav Anarez contributed to this astronomical price.

The Macallan Peter Blake 1926 60 Years Old - £782,145

Here is another Macallan inclusion in this list. This whiskey comes from the famous Macallan cask #263. When this cask was filled in 1926, it was laid there untouched until 1986. This cask was then divided into 40 bottles. Some bottles were painted and dressed in labels by famous artists, and 2 were auctioned off in blank bottles. 

What was left was 12 bottles, which were released in 1993. One of those bottles was sold in 2018 by Bonhams in Hong Kong for £782,145.

The Dalmore Decades No.6 Collection - $1.24 million

This collection consists of six whiskeys released in 1951, 1967, 1979, 1980, 1995, and 2000. These bottles were selected by Damlores famous distiller Richard Paterson. There are whiskeys that hit many different milestones, such as the first whiskey distilled in the new millennium, and the famous Dalmore 60-Year-Old, which was decanted from one of the two last casts from the Mackenzi era.

This collection was sold by Sotheby’s in Asia for $1.24 million.

The Macallan Fine and Rare 60-Year-Old - $1.9 million

This Macallan bottle achieved the status of the most expensive whiskey in the world in 2019 when it was sold for $1.9 million at Sotheby’s auction in London and kept that status for 2 years. 

The Macallan Fine And Rare collection is a collection of 57 single malt whiskeys distilled by Macallan in the span of eight decades. There are just 14 bottles remaining and every single one of them now are part of private collections

Craft Irish Whiskey Co.’s Emerald Isle Collection - $2 million

This collection smashed a world record when it was sold for $2 million on St Patrick’s Day in 2021 in partnership with Faberge.

But the Emerald Isle Collection can not be fully considered the most expensive whiskey ever sold. The reason behind this is that with their Faberge partnership, Craft Irish Whiskey Co. decorated this collection with an 18k emerald Faberge Celtic Egg and 22k Faberge timepiece. 

But the whiskey in itself is 30 years old by Craft Irish Whiskey Co’s and is considered the most exclusive whiskey distilled by them. It is the oldest tipple-distilled Irish single malt in existence.

FAQs About Investing in Whiskey

Is whisky a safe long-term investment?

As things stand now, yes, whiskey is a good long-term investment. What gives the whiskey its price tag is quality and the older the whiskey is, generally the better it becomes. But we need to select correctly which whiskey to invest in and keep in mind that just because something is valued highly today, it does not mean that it will continue to be desirable in the future.

Is a cask of whisky worth investing in?

If you know how to age a whiskey or are ready to pay someone to age it for you, then yes. Whenever we invest in a cask of whiskey we age it ourselves and if done correctly the profits will most likely be high.

Does the price of whisky increase with age?

Generally yes. The older the whiskey gets the tastier it becomes. This causes the whiskey price to go up from the initial purchase price. But the aging process needs to be done right, or quality will not improve it, and it might even get worse.