Barrels of the perfect whiskey for investment

Creating the Perfect Whiskey for Investment: Expert Advice from Whiskey & Wealth Club’s Finest

April 26, 2023

The world of whiskey is thriving, with many of Whiskey & Wealth Club’s clients thrilled by the skyrocketing whiskey market that seems immune from market fluctuations. But how do you make the next step – or even double-down on your investment to maximise your returns? We’re on hand to impart some of the great whiskey knowledge available right now.

Whiskey & Wealth Club was established by whiskey experts Jay Bradley and Scott Sciberras four years ago with one goal in mind: they wanted to offer everyday clients thinking about investing in whiskey – and buying a cask of whiskey – the opportunity to be able to experience high returns from cask whiskey brought by our clients at wholesale prices. Our co-founders had always been fascinated about the history of whiskey, its heritage, the world’s best whiskey producers; and the art of collating the best Irish whiskey ingredients to make the perfect whiskey – not to mention the craft behind how Irish whiskey is made, the unique methods for whiskey maturation and whiskey preparation. But for all that intrigue and fascination they had with Irish whiskey, they wanted to go one step further.

The brainchild they had was that the whiskey cask investments made by our clients would be safely insured and stored in bonded warehouses, where they would be able to mature for up to fifteen years, by which time our clients could sell their casks or make further purchases in order to make market-leading returns. And to this day, cask whiskey ownership remains one of the best alternative assets you can buy.

Our model focuses on the best whiskey to invest in for our clients and has proved highly successful, allowing members of the public and institutional clients to buy New Make Spirit, mature liquid, as well as rare bottles wholesale from luxury distillers. We use our contacts to connect our clients with this once rarefied world.

And in fact our approach has proven so beneficial for our clients that we have recently opened new offices in Dublin, Sydney, and shortly in the US and Dubai. Our aim is to extend this opportunity to clients in other global regions looking to capitalise on our links with high-end distilleries in thriving markets abroad.

Whether it’s buying casks or collecting whiskey as an investment that you have in mind, here’s what you need to know about the international whiskey market:

THE SCOTCH WHISKY MARKET

The Scotch whisky industry is reaching levels the likes of which the world has never seen before. Of all the spirits traded throughout the world, no other spirit sells more than Scotch. It is now the planet’s number one traded spirit, with demand having risen to more than £6 billion per year, and counting.
Indeed, the speed at which Scotch whisky is traded is so frenetic that a staggering 53 bottles of Scotch are sold every single second of every single day. That is a huge amount of Scotch being purchased internationally. These massive numbers speak to the vast customer base Scotch has across the planet – 180 individual markets are placing orders for bottles of Scotch.
Scotch whisky makes up one in every five (20%) of all food and drink exports abroad from the whole of the UK.
And because supply can’t keep up with such booming international demand, Scotch whisky distilleries can’t open up soon enough, with a remarkable 177 new distilleries being opened in the five years between 2012 and 2017.
The American market, by far and away Scotch’s biggest base, spends a staggering £1.053 billion pounds on Scotch each year.
Earlier this year, for example, one rare cask of Scotch whisky – bought for £5,000 from The Macallan distillery over three decades previously – sold at auction for a staggering £1,017,000, setting a new world record.
As Forbes notes: “Whisky prices seem little affected by the gyrations of the financial markets.”
Indeed, as Money Week reports, one 1975 cask sold for £16m, prompting The Financial Times to declare it “a new high-water mark for the increasingly competitive world of rare whisky.”
In the world of Scotch whisky, the entire whiskey market is predicted to grow by $8.02 billion by 2027. As the US requirements for the spirit look to ramp up to ever higher levels, the basis for this forecasts stemming from the recent 19% growth in this market over recent months.
India. In 2021, even in spite of a global pandemic, sales of Scotch swelled by phenomenal 60%.
Demand for Scotch has also risen sharply by 123% in China, complemented by other significant rises in Latin America (7%).

THE IRISH WHISKEY MARKET

According to the IWSR Drinks Market Analysis, between 2013 and 2017, the Irish whiskey market grew by 39% per year. That includes all investments in whiskey, including rare whiskey investments.
Irish Whiskey—sales of which were up an astonishing 16% in the United States last year.
US sales increased, in spite of the pandemic, by 16.3% in 2021, with overall exports increasing by 370% since 2010.
A decade ago, merely four distilleries in Ireland produced Irish whiskey. Currently, there are more than 40 distilleries either operative or in the growth phase.
This explains why The Irish Times has described Irish whiskey as “the world’s fastest-growing spirits category in over a decade.”
Sales of Irish whiskey and expensive Irish whiskey brands meanwhile are currently expected to grow by 33% in the next 12 months, with — as Bloomberg U.K. stresses — “Irish whiskey makers struggling to meet a surge in global demand.”
“The Irish whiskey industry continues to go from strength to strength,” reports Forbes, “and if sales continue their rapid growth, Irish whiskey sales will surpass Scotch whisky sales in the US sometime this decade.”
Part of this flourishing clearly comes down to the superiority of the Irish whiskey currently on offer to purchase. 40% of whiskey drinkers, for example, admit that when they fall in love with a specific Irish whiskey distillery, they subsequently stay faithful to that beloved whiskey brand for ten years at a minimum.
As the Belfast Telegraph recently noted: “One key finding from the recent International Trade Report was that a record 14 million cases of Irish whiskey were sold around the world in 2021, a year-on-year increase of 21%.”
By 2026, the Irish whiskey is expected to grow by $1.54 billion, driven by increasing demand in the Latin America and Asia-Pacific markets.
This year, sales rose to 9.94 million 9-litre cases, a near-double increase from 4.47 million cases in 2010, with a CAGR of 9.2%.
Markets in France and China will continue to thrive, at growth rates projected to sit at or exceed 4.8% CAGR for the former, with China potentially putting in a repeat performance of 2020 with a CAGR of 9.3%, as China’s upper-middle-classes and associated disposable incomes continue to grow.

THE BOURBON WHISKEY MARKET

And Bourbon—which is precisely where Scotch was a decade ago—roaring to life in international markets, and continuing to surge at home (sales of American Whiskey swelled by 10.5% in 2022 to reach $5.1 billion USD in its home market).
In 2021, the global bourbon market was valued at $5.11 billion, with US sales recently reaching 76 million 9-litre cases.
Bourbon is now experiencing its biggest boom in more than 50 years. Even during the pandemic, Bourbon appeared bombproof, with sales rising by 29.7%, driven by a thriving global cocktail culture and new innovative cask aging techniques.
Indeed, in the US right now, Bourbon sales are currently up double-digits, by 12.9%, with this spirit now striving for pole position as the most bought spirit by a population of almost 332 million people.
Bourbon production hailing from America’s South-East, where 95% of the world’s supply is made, is now moving at four times the speed it was ten years ago.
With nearly two million casks of Bourbon being produced every year in this region alone, the spirit world’s most trusted trends analyst, the International Wines and Spirits Record (IWSR), asserts that Bourbon has an average, minimum annual compound growth of 7.9%.
According to the IWSR, we can expect the good times to continue to roll for at least the next half a decade. Therefore, now is the time to act.
The bourbon market is forecast to grow with a CAGR of 11.25%, reaching a market value of $9.69 billion by 2027, with Bourbon making 8.7% of the US spirits market.
In the US in particular, wealthier drinkers are flocking to Bourbon: demand for Bourbon in households that earn between $150,000 and $250,000 could continue its upward trajectory.
In the past 10 years, the number of upper-middle-class consumers who choose Bourbon has increased by a staggering 46%.

Our aim is to extend this opportunity to clients in multiple global territories looking to capitalise on our links with high-end distilleries in thriving markets abroad.

To start your cask ownership journey today, call our Account Managers on 020 3129 1639.

Sources:

Allied Market Research

Market Watch