Whisky as a long-term investment not limited to old and rare bottles

It is no surprise that while the economy continues to be highly turbulent for investments, traditional “safe bets” are no longer the best option.

The latest Knight Frank Wealth Report shows whisky delivering a 500% return over a 10-year period, and outperforming the likes of gold, classic cars, property and art.

Whisky appeared in the Knight Frank Wealth Report for the first time in 2019 after rare bottles sold at auction were tracked over 10 years.

While the report highlights the performance of rare whisky, investors have in recent years turned their appetite to casks and, in particular, “new make” spirit.

As established distillers cherish their stock due to the increase in value yearon-year, newer distilleries have looked to the market to help with growth in the early years of waiting for their whisky to mature.

The unique thing about whisky investment is that it literally matures over time – the longer it matures, the greater its value.

We have seen an increase in whisky investment in the past few years as investing in casks has become more attractive and attainable.

With new distilleries making a small number of casks, the investment appeal is huge compared to stocks and shares or other alternative investments.

Knight Frank’s latest report highlights the rapid rise of whisky as an investment choice.

It shows cars increasing in value at 258% and art at 158%, while whisky tops the list at more than 500%.

With the possibility of negative interest rates, it is obvious investors are getting little back from money in the bank and may in the future even have to pay to store it there.

In some countries, people are even removing money from banks and storing it in vaults.

The volatility of more traditional investments is making tangible alternatives appealing, and having an investment that appreciates year-on-year is an attractive option.

We have sold our ex-bourbon and ex-sherry casks to investors ranging from local enthusiasts, who want to own whisky made on Deeside, to expats and oversees collectors who find our heritage and story hugely appealing.

Compared to other investments, whisky is relatively “risk-free” as many distilleries offer terms to buy back at 10 years.

Even if the distillery ceases to trade, the investor remains the legal owner of the cask.

It would then simply move to a third-party bonded warehouse, of which there are many.

There is also the option of buying a “cask bond” which many investors find appealing, but it’s important to look at the terms.

As an example, we offer a guaranteed 9.5% compound growth year-on-year on our cask bonds.

As a new distillery, it has given us the ability to provide our customers with a unique chance to own our “new make” spirit, which after the mandatory three years and a day becomes liquid gold.

Of course, you can either keep it as an investment or bottle it and enjoy it.

SPIRITED APPROACH: Alistair Baxter said investing in casks has become more attractive and attainable.