Whiskey is a proven asset class that has been around for decades as a unique investment opportunity. In contrast to many other alternative assets, whiskey inherently becomes a more valuable product as it matures. When whiskey matures in a cask, it develops a rich and complex profile that gives each whiskey its unique flavour profile. This is due to the whiskey interacting with the oak barrel and oxygen which allows for a more complex and smooth flavour profile to develop. The longer a whiskey ages, the more valuable it becomes, making it an attractive asset to investors. The aging process also generates exclusivity, as not all whiskies are aged beyond the 3-year timeframe to legally be classified as whiskey in some countries. Casks aging beyond ten, twelve, fifteen years and beyond can generate significant returns for investors.
Whiskey valuation is also dependent on the distillery producing the whiskey. Not all whiskies are created equal, with premium casks carrying decades of expertise, loyalty, and brand value. The ageing process, distillery brand value, and exclusivity of whiskey create a valuable investment opportunity.
Whiskey Industry Insight
Multiple economic trends signal the continued growth of the whiskey market. Exports of Scotch Whisky have increased by 31% between 2018 and 2022, to a record £6.2bn.[i] Global whiskey revenue is projected to grow at a 3.2% CAGR between 2024-2028. The Spirits market is also influenced by underlying macroeconomic factors. Economic growth, rising disposable incomes, and changing lifestyles are driving the demand for spirits. As economies develop, consumers have more purchasing power and are able to afford higher-priced spirits. To keep pace with this growth in demand, distilleries must have the capital necessary to age high-value whiskeys.
Whiskey Investment Performance
Whiskey’s inherent growth characteristics and market valuation has contributed to making whiskey an attractive investment for investors looking to diversify their portfolio. Investment-grade whiskey has outperformed various indexes in investor returns over twenty years. Investors who invest in ageing whiskey from an acclaimed distillery can obtain significant returns on their investment.
[i] Scotch Whisky’s Economic Impact Report, 2022, Scotch Whisky Association