The Enduring Appeal of Whiskey – and its Value as an Investment Opportunity
There is an enduring appeal for whiskey as an investment opportunity. In fact, according to the Knight Frank Luxury Investment Index 2019, the rare whisky market is one of the fastest growing, having achieved an annual growth rate of at least 40% in the last 10 years.
Various factors are causative to this enduring interest in investing in rare whiskey, the following being the most significant of these factors:
The Various Factors Driving the Appeal of Investing in Whiskey
The primary factors driving the appeal of whiskey as an investment opportunity are:
#: The Asian market
The Asian Whiskey market is the primary factor causing the growing global interest in whiskey as an investment choice. Various publications such as Jing Daily show that various Asian locations such as China, Dubai, Japan and India displayed significant growth in sales of rare, single malt whiskeys.
Part of this growing interest in investing in whiskey in Asia is perhaps due to the rapid increase of high net worth individuals in Asian countries. In a report published in Bloomberg News, data collected in 2018 indicated that Asia is still the leading producer of high net worth individuals.
Thanks to this growth in young, wealthy people who have a taste for a high end life – including high end whiskey and liquid assets – sales of rare whiskies (and premium, single malt whiskeys in general) in Asian Countries such as China have seen significant growths of up to 19.5% since 2017.
According to Jing Daily, a publication that tracks luxury consumer trends, interest in whiskey as an investment vehicle has grown from 15-22% in the last three years thanks in part to interest in whiskey from high net worth individuals.
#: Stunning price growth
According to Andrew Shirley, Editor of the Wealth Report, various, rare single malt whiskies have attracted stunning price growths over the last several decades, highlighting the enduring appeal of whiskey as an investment choice.
As an example, the substantive price improvement of whiskeys from closed down distillers such as Port Ellen, which shut down in 1983, has led to massive interest into their whiskey as an investment vehicle. For instance, when the conglomerate that owned Port Ellen was closing down in 1983, the little whisky product they released each year for 17 years grew from a price of £80 to £2,600 in 2019, a growth of over 25%.
According to Andy Simpson, co-founder of Whisky 101, “interest in whiskey as an asset continues to grow because the asset tends to perform well in volatile markets.”
There is no better example of this bullish growth of investing in whiskey than the release of Diageo’s Johnnie Walker Edition “White Walker” whisky collection, a collection meant to commemorate the successful end of the acclaimed TV show, Game of Thrones.
Released exclusively on Amazon, the White Walker Blend featured eight single-malts. The initial price for the collection of these whiskeys in February 2019 was £398 with some of the blends within this collection collecting a price of £38 for the Singleton of Glendullan Select and Royal Lochnagar, and £65 for the Oban Bay Reserve and the Lagavulin 9 Year Old.
After the initial release of this collection, demand skyrocketed and stocks sold out within hours. By the end of that month, a set of the same collection that costed £398 mid-month was auctioning at various Whiskey and Scotch Auctioneers for an average of £925-£1050, a very endearing price growth of 5.27%-6.52% in less than a month.
Such kinds of bullish growths have become the mainstay in the whiskey market, especially as more and more distillers adopt the habit of producing special and limited edition whiskeys that whiskey investors are finding very hard to resist.