For whisky aficionados, investing in a complete cask is perhaps the ultimate romance. To have your own hogshead or butt, filled with spirit from your favourite distillery, stored and matured especially for you, is a distinct and rare pleasure.
Some may be looking to buy casks to eventually bottle and drink themselves, while for others it is an investment in a market that can yield spectacular returns. A rare 30-year-old sherry hogshead from Macallan Distillery sold for almost US$580,000 in a Bonhams auction in Hong Kong at the end of 2019, setting a new world auction record for a whisky cask, while the market for rare whisky overall has shown growth for a decade.
More distilleries are today offering cask investment schemes, including small private whisky makers, such as Ardnamurchan, Lagg and Ardnahoe, and especially new brands looking to raise cash upfront.
According to findings from the BC20 Whisky Cask Index published in the UK’s Times, $100,000 in whisky casks procured in July of 2018 would be worth around $160,000 by the end of this past June. Perhaps even more surprisingly, it asserts that investing in the popular digital currency Bitcoin, the S&P 500 Index or even gold––a standard safe bet––would not have yielded the same level of returns.
In Scotland alone, there are an estimated 22 million casks of aging whisky in storage. Distilleries were once far more hesitant to release their barrels preferring to gain the long-term profits from their matured contents. However, casks have become more and more available on the open market and cask collecting has gained momentum accordingly.
Spurred by rising demand from Japanese, Korean and Chinese investors, the value of rare whisky has soared 564% in the last decade, and the asset has outperformed not only fine wine but every other luxury asset, according to the Knight Frank 2020 Wealth Report. Knight Frank’s data shows rare whisky soaring despite the volatility in markets in recent years.
