Sake: the next big thing in drinkable investments?
As the Japanese rice wine becomes more popular, can investors benefit from growing demand, asks Olivia Rudgard
Sake is entering the mainstream. The Japanese rice wine, once rarely seen outside Japan, is on the way to becoming an international delicacy – and even an investment. World-renowned wine expert Robert Parker has added 78 varieties of sake to his list of top wines for the first time ever. But what about the investment potential?
Traditionally sake was brewed to be drank immediately. It would be bottled and then sold within the same country, meaning vintage varieties did not really exist.
But that is changing with the drink’s emergence onto the global stage. A few visionary breweries started making sake designed to be kept for longer in the late Eighties – but these are few and far between.
A handful of vintage bottles have made it into the UK market.
Among the oldest are some from Nira brewery, from Japan’s Kansai region. Bottled in 1988, these are ancient by sake standards – a fact their name, Koshokusozeh, which means “apparently old”, reflects.
Sake expert Nobuyuki Sato, a visiting fellow in international economics at Chatham House, said the brewery expects to sell the bottles for around 20,000 yen, or £150 – but the value could go up or down depending on how the sake ends up tasting.
The risk is that vintage sake is still an unknown quantity. The drink could turn out to be disastrous – and no one will know until it’s been tasted.
But experts are hopeful that it will be of good quality.
“That’s an estimate, but they’re basically priceless,” he said. “£150 might not sound like much, but that’s a high amount for sake,” said Mr Sato.
“I think they’ve been heavily underpriced – this company has good potential and only a few tiny companies did this, so there are not many bottles out there.”
Experts say the standard of sake in the international market has historically been poor. Companies exported the bottles that could not find buyers in Japan, which tended to be of lower quality.
Only within the past three years, said Mr Sato, has more premium sake started to be exported, mostly to New York, Paris and London.
A handful of boutique sake makers are targeting the premium London market, hoping to sell high-quality bottles to restaurants and nightclubs.
Many of them are also starting to bottle varieties designed to be kept for longer, and the techniques used to create varieties that will last for a long time is improving.
For those wanting to get into the market, sake should be kept at temperatures around three to five degrees cooler than those ideal for wine, but like wine should be ideally kept in dark conditions.
In the UK, bottles can be bought at specialist retailers including Hedonism Wines and Tengu Sake.
As with wine, cautioned Adrian Lowcock, of investment company Architas, sake is an investment best made by enthusiasts or investors with spare cash that they can afford to speculate with.
“An investment in sake is a bit like fine wines or classic cars. They are quite difficult to value – a bottle of wine or sake is only really worth what someone else is willing to pay for it.
“That means the price can fluctuate quite a lot depending on sentiment and fashion trends,” he said. One way to capitalise might be to invest in the companies that will benefit from any increase in the popularity of sake and Japanese food and drink internationally. One of these is drinks company Diageo, which has created Japanese-influenced gins and spirits. Danny Cox of investment company Hargreaves Lansdown recommended Lindsell Train Global Equity as the top fund choice to get exposure to the company. Another option is Japanese drinks company Suntory. However, this is listed on the Tokyo stock exchange and to buy shares you would need to find a broker that can deal in Japanese shares – not an easy task. Another investment opportunity is offered by sake start-ups based in the UK, as several small brewers are launching this year or next. Two British brewers – one in Scotland and another in Cambridgeshire – are launching this year alone. One enthusiast, Andy Travers, 34, from London, said: “If the trend continues to grow and the demand increases, and sake does break a bit more into the mainstream, new brewers are being set up. “That could be an opportunity for investment.”
‘Sake is a bit like fine wines or classic cars – they are quite difficult to value’
Enthusiast: Andy Travers expects more UK sake companies to launch soon