Investing in whisky in 2023 is a strategy that can pay off if done right. Indeed, investing in spirits such as whisky is not an activity to be taken lightly. Since 2020 and the beginning of the crisis, the United Kingdom financial markets authority has been calling on investors to be extremely cautious with this type of asset. Let’s take a closer look at the best practices to know before investing in the whisky market.
To be a successful whisky investor you need to understand :
The benefits of investing in whisky
Investing in whisky : a tangible asset
The first advantage of whisky as an asset is its tangibility. Most of the assets in which it is possible to invest in 2023 are intangible assets : company shares (via a PEA), SCPI, crypto-currencies, etc. Like real estate, whisky has the particularity of being tangible : a quality that reassures many investors.
Another argument in its favour is that whisky is a foodstuff that is hardly perishable. Unlike wine, whisky does not age in the bottle (unopened), and its taste can be preserved indefinitely, provided it is exposed to heat, light and oxygen.
Read also : Investing your money : 6 mistakes to avoid
Whisky as an alternative investment
Investing in whisky, and by extension in spirits, is not a trivial matter.
When one leaves the classic investment patterns, via the assets mentioned in the previous paragraph, one tends to want to move into art and paintings, or watches and clocks.
Investing in whisky allows you to diversify your portfolio considerably and reduce your risk exposure. We are talking about a consumable and perishable product, which evolves in a completely different market.
Whisky, a prestigious investment
Whisky is not a spirit like any other, it has a history.
It is the reference alcohol across the Channel : whisky is so popular in the UK that the Irish and the Scots are fighting over the paternity of the product.
Whisky has the image of a thousand-year-old spirit appreciated by distinguished people with a certain expertise in alcohol.
The prestige of whisky is also rooted in its production process : a know-how that has lasted for centuries, illustrated by the distilleries and the production methods used in them.
The whisky market
If the famous spirit is attractive, what about the market ? What are the best products ? Which countries are the most invested in this market ?
What return on investment with whisky ?
According to The Swex 500 (formerly The World Whisky Index), between 1936 and 2008, the value of Scotch single-malt whisky increased by 6.6% per year (study conducted on over 600 different bottles of whisky).
Since then, this rate has been growing, as shown by this graph presenting the average annual return on investment for bottles sold on The Swex platform, which is now the biggest whisky selling marketplace in the world.
Which whisky should you invest in ?
Several whisky brands are well known, not only for their intrinsic quality as a spirit, but also for their increase in value over the years. Among the most famous distilleries we can mention :
The scotch whisky par excellence. A true luxury distillery, Macallan is one of the oldest distilleries in Scotland. The quality of its Single Malt is recognised and sought after throughout the world. Macallan’s bottles are regularly the subject of record auctions, with buyers prepared to pay several hundred thousand (sometimes millions in the case of casks or very limited editions) euros or dollars to increase their collection.
Interested in a bottle of Macallan 12 Year Old ?
On Thursday 24 October 2019, a bottle of Macallan Fine and Rare 60 Year Old whisky broke the world record at auction : £1.4 million (approx. €1.7 million) was the price paid by the owner for the luxury edition.
The Japanese creator, deploys its first distillery in 1918. Since its first bottle was sold, Suntory has made its Hibiki range one of the most renowned Japanese whiskies in the world. Hibiki is available in 4 expressions : 12, 17, 21 and 30 years old.
The Scottish brand is owned by the Diageo group, a huge player in the spirits market.
Since 1820, Johnny Walker has been selecting malts of varying character and blending them using its unique expertise.
Johnny Walker is known throughout the world for the diversity of its whisky collection : the “Label” bottles offer a wide range of prices, from around twenty euros for the “Red Label” to several thousand euros for the best quality “Blue Label” Single Malt.
Order a bottle of Johnny Walker Gold Label, the brand’s mid-range whisky.
Founded at the end of the 18th century, the Bowmore distillery is one of the first distilleries in Scotland.
One of its best known whiskies is Legend, a whisky known for having a very light nose and favouring the mouth feel.
Today the Bowmore distillery belongs to the Japanese giant Suntory.
Order a bottle of Bowmore 12 Year Old
Born in the Alps of Japan, the Karuizawa distillery is rather young : it has been developing and selling its whiskies on the market only since 1955 and ended its production in 2000.
In just 45 years of trading, Karuizawa has managed to win numerous competitions and its whisky bottles are highly sought after at auctions by leading international experts.
We have presented you the 5 main whisky in which you can invest, we can also mention :
- Highland Park
- Port Ellen
- Gordon & macphail
- Hanyu ichiro
How to invest in whisky ?
Selecting the right whisky
There are several criteria that you should consider when selecting the whisky you wish to invest in :
“What is rare is expensive. This is the key element for any investment, and it is also true for whisky.
Bottles from a sought-after collection that has been out of production for several years are bound to be a profitable investment. The rarest bottles of whisky achieve the highest sales at auction : investors are able to pay millions of euros for them.
Prestige often goes hand in hand with rarity. But there are many distilleries producing prestigious whiskies which are not necessarily rare, this is typically the case of Macallan whiskies : bottles of this very high quality whisky can be found on the market whatever its age.
- The label
It is not the first criterion that one thinks of and yet the labels and back labels are the guarantors of the authenticity of the whisky.
If you want to resell your bottle at a good price, make sure they remain legible, untorn and as intact as possible.
- Storage conditions
Whisky remains a consumable product and therefore potentially perishable, so the storage condition of the beverage is an essential parameter to know in order to determine if it still fulfills its main function : being drinkable.
This is not necessarily the main criterion for investing in whisky, but a Single Malt that has won numerous awards in recent years would automatically see its value appreciate on the market.
Beware of counterfeits : the whisky market is booming and there is no shortage of fakes. To make sure you don’t invest in a fake bottle, look out for the brand’s “signature” : neck, cork, label. Be sure to identify all the signature elements of the distillery to be ready to detect the slightest sign of a counterfeit.
Investing in whisky via marketplaces
In 2023 and thanks to the internet it is very easy to invest in whisky without having to go directly to a distillery.
Many marketplaces exist to consult and invest in your favourite bottles : Single Malt, Single Cask, Scotch Malt...
As with traditional financial markets where you buy company shares, marketplaces make it easier for you to buy by putting you in direct contact with the seller.
Whisky marketplaces to buy your whisky : The Swex, Amazon, la maison du whisky, le petit ballon…
Investing in whisky by buying in distilleries
A more time-consuming, tedious and organisational technique is to buy your whisky directly from the distillery that produces the bottles.
Knowing that the most famous distilleries are located in Scotland and Japan, investing in whisky in this way will not be an easy task, but if you are a true enthusiast, the experience can be worthwhile.
Buying your whisky in a distillery will give you a much better price : as in all production chains, the more you take out of the chain actors, the more commission you get and the more you save.
Some distilleries issue a certificate of authenticity if you buy directly from them. Most premium whiskies will award one regardless of the method of purchase, but if you can prove that your investment was made physically directly from the distillery, it can make your bottle even more valuable.
Participate in a whisky auction
This event is reserved for the biggest investors in the market, so if you can afford to participate you will be sure to have access to the best casks and bottles of whisky in the world !
Investing via auctions is still a professional activity with competition and quality of products so high that prices soar quickly from the first bid.
The auction has the particularity of offering bottles so rare that you will not find them anywhere else : Japanese whiskies, Scotch whiskies, Single Malt, Scotch Malt, Single Cask... You are bound to find a whisky to suit your desires (and ideally your budget).
That’s the whole point of your initial investment, right ? To resell your bottle at a better price to make a profit.
In order to ensure the value of your bottle until the day of resale, be sure to keep it in the best possible conditions, as your future buyer is likely to be very particular about this criterion.
Keep with you all the elements that guarantee the quality/authenticity/reliability of your whisky : label, proof of purchase or certificate will be all the more reassuring elements to provide to your potential buyer to convince him to invest in your whisky.
Remember that you were a whisky buyer before him and like him, you wanted to avoid any risk of a potential scam.
Investing in whisky : FAQ
What are the advantages of investing in whisky ?
Whisky is an alternative investment. By buying whisky you diversify your portfolio considerably and dilute the risk of a general fall in your assets.
How to invest in whisky ?
Marketplaces, distilleries, auctions, several options exist to buy whisky according to your budget. Be careful : no platform or seller in UK is approved by the UK markets authority.
Be careful, investing in whiskies can pay off, but there are many fakes. Concentrate on recognised brands from the most famous distilleries by buying bottles from trusted sellers. As with any investment, only invest what you are prepared to lose. Now you are ready to invest in whisky !
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