The whisky market has been enjoying considerable growth for years, as brands target new markets of consumers in Asia, Africa and South America, the possibilities seem endless. Along with these new age consumers, a deeper interest in investment has resulted in whisky providing better returns than wine, gold, oil and London property. The value of Scotch, in particular, is one of the fastest-growing, consistent products around and, for budding investors, still sits at a fairly accessible price.
Whisky has enamored drinkers around the world due to its massively varied flavor profiles and price range, making it an easily obtainable luxury, perfect as a gift or as part of a collection. While markets in the US, Canada and Japan are establishing themselves as strong players, Scotch whisky stands head and shoulders above the rest. Scotch whisky makes up 4% of global spirits sales by weight but accounts for around 12% by value.
There are a number of reasons Scotch has managed to become such a global whisky force despite not even being the oldest recorded nation of whisky producers. Scotch has been able to cultivate itself as a luxury item through a combination of:
- Clever marketing – in recent years, many brands have been able to attract new drinkers through diverse marketing promotions and manipulating the reputation of Scotch as a drink only for rich men to enjoy at home.
- Diversity of products – Scotland is home to hundreds of distilleries which have distinct characteristics, making collection exciting and encouraging exploration for whisky lovers.
- Specific production methods – Single malt Scotch must be made from only malted barley in copper pot stills in a batch process in one distillery. Having protected characteristics means the nation has a specific product which can’t be reproduced, creating a perception of exclusivity.
- Availability – With so many to choose from, Scotch is a highly available product at an entry-level price range. On the other hand, investment in Scotch is purely based on the limited availability of older, quality expressions.
Since Scotch has such a specific production process, including a requirement that all spirit be aged for at least 3 years and can only be made in Scotland, it has been able to easily overtake markets like American whiskey. Bourbon is whiskey made with 51% corn and can be distilled for as little as three months. Because of this, Scotch is perceived as a more premium product which draws its worth from the time it takes to produce and the diversity of flavors from different age expressions.
Investing in whisky
Rare Whisky 101 states that the average bottle price of Scotch has risen from £299 in 2017 to £377 in 2018 – a 26% increase. For first-time investors, £377 is still an affordable prospect but the significant increase shows the promising return possibilities of getting involved now. Those who haven’t started their whisky collection already might want to take advantage of the market and start looking to build their portfolio now.
Scotch distilleries at the top of the investors rankings last year include:
Some of the best bottles from this year’s world whiskies awards:
Tips on starting a portfolio
- Make a plan
The key to any successful investment is to have a plan in place before getting started. Consider what kind of returns you’ll be happy with and then plan according to this to ensure security.
- Understand the market
Knowing what kinds of whisky make for good investments, what investors and whisky lovers will be looking out for and where the market is headed will ensure better success over time as you build your portfolio.
- Consider risks
While bottles of Scotch are the most invested-in, some emerging markets like Japan are producing promising products which are drawing the eyes of investors and can offer unique opportunities for those looking to get involved. However, these come with higher risks as the market is likely to be less stable over time.
- Enjoy whisky
40% of collectors say that return on investment isn’t the main reason they collect whisky. To be secure in the world of whisky investment, an appreciation for the drink is important. Not only will a personal love of whisky help inform your investment decisions, but it ensures any bottle you buy will never be wasted should you not make the returns you want.
- Take your time
Investment is all about timing – whisky may be booming right now but if the consistent growth continues, returns could be even bigger by holding onto some of your more special bottles.
The world of whisky investment is exciting and attractive for established whisky lovers and newcomers alike. The consistent gains the industry is making have created an entryway which is highly accessible to any would-be investor.
This article was written by Damon Culbert from The Spirits Embassy, rare whisky and spirits marketplace shipping worldwide.