Invest in Whisky
Although they may not be the obvious choice for investments, whisky bottles have displayed incredible potential throughout the years, many times proving themselves to be a high-performing asset.
And with whisky prices increasing over the past few years, the popularity of the “water of life” as an investment asset has grown immensely.
But don’t take just our word for it.
The global whisky market was estimated at USD 68.8 Billion in 2024 and is expected to reach USD 81.5 Billion in 2028. Of course, these forecasts can change, but the current ones confirm the potential lying in whisky as an investment.
Invest in rare whisky with Splint Invest today and tap into the opportunities the “liquid gold” can provide!
Why invest in rare whisky
There’s more than one reason behind the recent popularity of whisky as an investment.
The first is that rare whisky has been by far the top performer among luxury goods for some time. Between 2013 and 2023, for example, the Rare Whisky Apex 1000 Index, which tracks the performance of over 1,000 rare whisky bottles, increased by over 403.3%, providing an average annual return of 17.5% in that period.
A similar, upward trend can also be seen for whisky casks. As per Braeburn Whisky, the whisky cask market saw an average projected growth of 14.95% in 2022, which indicates a 1.69% rise compared to 2021. What is more, whisky casks have significantly outperformed all the conventional investment options in that period.
Furthermore, it seems like this upward trend is not going to reverse anytime soon. There is an increasing demand for rare whisky, especially in Asian economies such as China.
Another potential advantage of rare whisky investments lies in their diversification capabilities. Like other alternative assets, whisky is not directly tied to stock market conditions. So while stocks could experience significant price corrections, whisky would steadily increase in value over time, providing you with protection against bear markets caused by recession or inflation.
Of course, it must be said that whisky investment carries risks as prices have fluctuated significantly in the past. On the other hand, value investors seek whiskies that may be undervalued and offer long-term appreciation. A market correction could bring healthy adjustments and opportunities for true value investors.
As usual with such types of investments, it is essential to approach the market analytically and avoid impulsively following trends.
Opportunities & risks of investing in whisky
| Opportunities | Risk |
|---|---|
|
Potential for High Returns: Historically, rare whisky has shown impressive growth, with some casks appreciating by 12-15% annually. This can be a great way to diversify your portfolio and potentially outperform traditional investments.
Tangible Asset: Unlike stocks or bonds, you own a physical product. This can be appealing during economic downturns when the value of other assets might fluctuate.
Passion Investment: For whisky enthusiasts, investing can be a way to combine passion with potential profit. You can learn more about the industry and enjoy the ownership of a coveted bottle. Limited Supply: The finite nature of rare whiskies, especially limited editions or discontinued bottlings, can drive up their value as demand increases. |
Illiquid Market: Selling rare whisky can be challenging. Unlike stocks with readily available buyers, finding someone willing to pay your asking price for a specific bottle might take time.
High Entry Barrier: Rare whiskies can be expensive, making them inaccessible to smaller investors. Additionally, cask investment requires significant upfront costs and long-term commitment.
Market Volatility: Past performance is not a guarantee of future results. The whisky market can be susceptible to trends and economic conditions. A sudden shift could lead to a decrease in value. Storage and Security: Properly storing whisky requires a controlled environment to maintain its quality. Theft is also a concern, especially for valuable casks. |
Rare whisky vs other investment options
Rare whisky bottles can be an interesting alternative to other popular assets, such as stocks or real estate. For example, between 2013-2023, the Rare Whisky Apex 1000 Index grew by over 403.3%. During the same period, the S&P 500 index increased only by 224.8% despite its higher volatility.
| Feature |
Whisky
|
Stocks
|
Real Estate
|
|---|---|---|---|
|
Investment Type
|
Tangible Asset
|
Ownership Stake
|
Physical Property
|
|
Risk/Volatility
|
High |
Moderate-High
|
Moderate-Low
|
|
Return Potential
|
High (potentially)
|
High | Moderate |
| Liquidity | Low |
High
|
Low |
|
Investment Timeline
|
Long-Term
|
Short or Long-Term
|
Long-Term
|
|
Management/Costs
|
High | Low |
High
|
Investing in whisky - bottles vs casks
There are two primary options for whisky investments - buying individual bottles or casks. We offer both these options here at Splint Invest, but which one to choose for your portfolio will depend on your preferences.
Here’s a quick breakdown of how whisky bottles and casks compare when it comes to using them as an alternative asset to invest in:
| Feature |
Whisky Bottles
|
Whisky Casks
|
|---|---|---|
| Maturation |
Stops at bottling
|
Continues in cask
|
|
Return Potential
|
Lower, relies on market demand
|
Higher, due to ongoing maturation
|
|
Investment Timeline
|
Shorter (flexible)
|
Longer (10+ years)
|
|
Liquidity
|
More liquid (easier to sell)
|
Less liquid (requires specialised buyers)
|
|
Upfront Cost
|
Lower per unit
|
Higher
|
|
Management
|
Easier to store
|
Requires storage fees, insurance, potential bottling charges
|
In general, whisky bottles are usually a better option for short-term gains and more straightforward management, as they are more liquid, allowing you to quickly react to market trends and capitalise on quick flips.
Casks, on the other hand, have displayed a massive long-term potential. When investing in whisky casks, however, be prepared for a long-term commitment, additional management responsibilities, and potentially higher upfront costs.
How to invest in rare whisky
Once you decide how you want to invest in whisky (bottles or casks), the next step in your whisky investment journey is finding the right whisky to invest in. This, naturally, will vary depending on the investment option chosen. The general rules of whisky investments, however, remain similar for both casks and bottles.
Key considerations before investing in rare whisky
Reputation: Invest in a whisky of the highest quality that is perceived as such by the trade and the public. It is advisable to buy aged whisky from well-known and established distilleries, or at least from those with promising growth prospects in the coming years.
Supply and demand: The value of whisky, like much else, is subject to the fundamental law of supply and demand. In the world of investing, this means that it is strategically important to look for bottles for which there will continue to be high demand in the future and for which supply will remain limited. The price paid for a fine bottle of whisky can be quite high, regardless of availability. However, it looks even more exclusive when only a few bottles are still available worldwide. The same rules apply to whisky cask investments.
Special Release: Special releases offer the greatest assurance that your whisky is unique. Examples could include bottlings of a new product or limited editions associated with specific events. This creates a guarantee that there will be no replenishment for future bottlings, adding to the "sentimental value" that many whisky lovers are happy to pay for.
What are the risk factors to consider?
Damaged bottles or casks: The handling and storage of the whisky bottles and casks are crucial in maintaining their fundamental value. However, in case of unforeseen events such as human errors, a fire, or natural disasters, the bottles and casks can be damaged or destroyed. This can have disastrous consequences, especially for cask investments, as they require a much more significant entry cost.
Counterfeit bottles: Due to the popularity and exclusivity of premium whisky bottles, counterfeit pieces are not uncommon on the market. As the popularity of the category increases, the issue will become even more paramount.
Market conditions: Following a set of due diligence and market research, investment-grade assets are identifiable. Nevertheless, paying the right price for whisky can be a challenge, posing a risk of acquiring the whisky bottle or cask at a price premium.
Investment case: As with physical assets, fees and taxes apply. The higher the value of the asset, the higher these costs are. Hence, when purchasing, the potential income should exceed such costs for the investment to be valid.
Legislation: Legislation is a significant risk that every whisky investor must understand. There are some extreme examples in history such as American Prohibition in the 1920s where alcohol was banned completely. Other more recent examples include various tariffs and quotas in international trade that can affect exports and global demand.
Invest in rare whisky bottles and casks with Splint Invest
Although it can be incredibly exciting and potentially beneficial, learning how to invest in whisky can be overwhelming, especially considering how much research it requires and the high entry barrier.
But what if we told you that investing in rare whisky can be much more straightforward?
That’s right! With Splint Invest, you’ll be able to invest in premium-quality rare whisky from renowned distilleries without the hassles involved in individual investments.
Using our platform, savvy investors can buy alternative investment shares, including whisky bottles and casks, for as little as €50, allowing you to build a comprehensive and diversified portfolio of alternative assets.
Create your Splint Invest account today and invest in rare whisky hassle-free and with peace of mind!
References
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