WHISKY INVESTMENT
At Cru Wine, we work closely with a select group of suppliers to source whisky, both in cask and bottle for our clients.
If you are looking for a rare whisky cask, or interested in learning about purchasing a whisky cask for investment, then our team are on hand to steer you in the right direction. After an initial discussion, we follow a rigorous selection process when selecting whisky investment opportunities for our clients, factoring in growth potential, provenance, holding period and liquidity, so we can hand-pick the best options for each specific customer. We have access to younger, new-make whisky casks with a lower price point, all the way up to blue chip, mature assets from the most renowned distilleries, such as Macallan.
A Brief Introduction to Whisky
At its core, whisky is an alcoholic spirit crafted from just three basic ingredients: grain, water, and yeast. Production occurs worldwide with fine whisky notably produced in Ireland, Japan, the United States, and, of course, Scotland, the home of whisky.
The process of transforming these three simple ingredients into liquid gold follows the same essential steps globally. However, it is the final stage of maturation, when the distilled spirit is placed in oak casks and stored, that plays a crucial role in determining the quality and investment potential of a whisky.
Facts about Whisky:
To be classified as whisky, the liquid inside a cask must have an ABV (alcohol by volume) exceeding 40%.
The contents of a cask must be matured in oak casks for a minimum of three years before they can be officially classified as Scottish whisky.
The value of a cask increases gradually during its early years. While short-term gains are possible, the most substantial returns on cask investments are typically realised in the mid to long-term, as the whisky reaches significant age milestones such as 10, 15, 20, or 25 years.
Whisky is classified as a, “wasting asset,” which means it is not subject to capital gains tax.
Download our Introductory Guide to Cask Whisky
Download our Introductory Guide to Cask Whisky for an comprehensive overview of the process of investing in cask whisky with everything you’ll need to know to get started on your first investment.
Whisky Market Performance
Over the years, the whisky market has experienced substantial growth globally, driven by increasing consumer interest in premium and craft spirits. The resurgence of whisky, particularly single malts and small batch releases, has captured the attention of both seasoned enthusiasts and new consumers. This growth has been supported by the rise in whisky tourism, with distilleries around the world attracting visitors eager to experience the production process and taste exclusive releases. Markets in Asia and North America have shown especially strong demand, contributing to a significant increase in global whisky exports. In 2023, Scotch Whisky exports were worth £5.6bn*, despite occasional challenges such as fluctuating raw material costs and regulatory changes, the overall whisky market has demonstrated resilience and robust annual growth.
There is also a significant opportunity for the global demand for Scottish whisky to rise exponentially, with the UK Government aiming to finalise the free trade agreement with India, one of the world’s largest whisky markets. This agreement could reduce tariffs on Scotch whisky from 150% to as low as 30%.
In recent years, the UK whisky market has also seen a diversification in product offerings, with distilleries experimenting with new flavours and innovative cask finishes to cater to evolving tastes. The rise of whisky investment, with collectors and investors recognising the value of rare and aged bottles, has added a new dimension to the market. Additionally, whisky brands have increasingly focused on sustainability, responding to consumer demand for environmentally responsible practices. While the market faces ongoing challenges, including potential shifts in alcohol consumption patterns, the overall outlook for whisky in the UK remains positive, with continued innovation and global demand driving its performance.
Whisky assets have increasingly become a popular topic among broadsheets and investment experts alike. In recent years, prices have skyrocketed with no indication of slowing down. With over nine million whisky consumers in the UK and continued growth on the horizon, we believe the next decade could see another impressive performance. However, entering this market, which is often unfamiliar to many investors, can be challenging due to the extensive networks needed to acquire the finest casks. Cru Wine boasts an outstanding track record in portfolio selection, asset management, and client care.
*Scottish Whisky Association (2024)
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Understanding Cask Whisky
The cask in which your whisky matures will play the most significant role in determining the quality and characteristics of a whisky. During maturation, the spirit interacts with the natural elements of the wood, as well as any residual liquid the cask previously contained.
Cask Types
All casks used in Scottish whisky production must be made from oak, with most crafted from ex-Bourbon American oak or ex-Sherry Spanish/European oak. The oak significantly influences the whisky during maturation through the following processes:
- Oxidation: The porous nature of the wood allows the spirit to “breathe,” leading to evaporation known as the “angels’ share.”
- Interactive Effects: The cask retains traces of its previous contents, such as Sherry or Bourbon, which impart additional complexity and flavour to the whisky.
Different Whisky Cask Sizes
Below is a list of common cask sizes along with their corresponding volumes in litres. It’s important to note that while a cask may be designed to hold these volumes, the actual capacity is often slightly less.
- Quarter – 125 litres
- Barrel – 200 litres
- Hogshead – 250 litres
- Butt – 500 litres
- Puncheon – 550 litres
FAQ's
Whisky can be a rewarding investment, particularly for those who understand the market and select high quality casks. The value of whisky often increases with age and rarity, with notable returns seen in rare or highly sought after expressions. However, like any investment, it carries risks and requires careful consideration and research.
Whisky investment is relatively safe when managed properly. As with any investment, there are risks involved, including market fluctuations and the potential for unforeseen changes in demand. It is crucial to work with reputable companies, such as Cru Wine, to ensure proper storage and insurance.
Insurance is included in the storage fees charged by Cru wine. The insurance covers the market value of your whisky cask.
The ideal holding period for a whisky investment varies depending on your investment goals and the whisky’s potential for appreciation. Generally, casks are held for several years to realise significant value, with the most substantial returns often achieved in the mid to long term. Bottles may also be held for an extended period, depending on their rarity.
You can sell your whisky investment at any time, though the timing of the sale can impact the returns. It is important to consider market conditions and the maturity of the whisky to maximise the value. Many investment firms and brokers can assist with the sale of your cask or bottles, ensuring a smooth transaction process.
