How to Invest in Whiskey

We talk a lot about finding the right whiskey investors for your distillery, but what about becoming the investor? Whiskey Investment and its popularity is at an all-time high. Rare whiskeys have seen a remarkable 447% increase in value since 2010. While past performance doesn't guarantee future results, the global hype surrounding traditional collectors and professional investors is undeniable. If delving into the market intrigues you, we've highlighted some popular investment options.

Popular Ways to Invest in Whiskey

Cask Schemes

While it can be a bit challenging, there are opportunities to make it work. The concept is relatively straightforward. You'll need to partner with a reputable group that can help you own profit interests in a cask. Keep in mind that you can't directly own the cask without a beverage alcohol license. So, why should you consider it?

Barrels often age for about ten or more years. During that time, the value of the whiskey will go up in price. But, as a profit interest holder, you are expected to pay storage costs during the aging process and mark up on production. We mentioned they are tricky. Why? Well, whiskey aging requires a lot of trust between yourself and the investment group.

There have been some questionable cask schemes in the past. Consulting with professionals, such as Brindiamo Group, can assist in evaluating the risks and rewards to determine the value of the investment.

Buy Rare for Whiskey Investment

Purchasing rare bottles can be a lucrative investment opportunity. These bottles tend to appreciate over time, with some experiencing an impressive 447% increase in value. You can explore buying from retailers or private collectors, and as you navigate through the options, you may come across well-known names in the whiskey collecting community. While seasoned collectors may have a stronghold in the market, there are still plenty of opportunities available for new investors.

Where should you start? Macallan, Glenlivet, and Highland Park are good Scotch brands to research. You might want to look into limited releases. Many brands issue limited edition bottles once a year. Getting your hands on a bottle might have a more significant impact than you think. Take Kentucky Owl. Their bottles have gone up 8% in value.

Buy Shares on the Stock Market

Businesses have the option to choose between common or preferred whiskey stock. While common whiskey stock provides shareholders with voting rights and more control over the business, preferred whiskey stock does not offer appreciation or voting rights but comes with set payment criteria. Additionally, preferred stock is prioritized over common stock. A company that files for bankruptcy must pay out the preferred shareholders before common. If you are interested in building a whiskey stock portfolio, we might suggest looking into whiskey companies like Diageo. They own 30% of the world’s Scotch. Single-malt brands include Cardhu, Talisker, Mortlach, and The Singleton. Diageo sells over 35 million barrels a year. Their market cap is $97 billion, with a profit margin of around 23%.

Invest in a Whiskey Fund

In 2018, Sweden saw the launch of the first publicly traded whiskey fund. This innovative business model offers investors the opportunity to own a fraction of a diverse collection of rare or limited edition whiskeys, as well as the chance to purchase individual bottles. The fund is managed by a team of five experts who curate the portfolio selection. Don’t get it confused with similar funds that allow you to invest in whiskey companies like Spirited Funds/ETFMG Whiskey. Instead, you are putting money towards the liquid and not the brand. The CEO and founder of the fund described it by saying, “Instead of gold, we buy liquid gold.”

It’s an alternative to buying rare bottles from collectors or at auctions. The fund is listed on the Nordic Growth market and will liquidate after six years. There is an expectation of seeing a 10% return. Keep in mind these funds have management fees and storage costs. Any bottles that go to an auction will have associated fees as well.

Tips for Investing in Whiskey

Learn the lingo in Whiskey Investment

Whiskey Investment has its own language. Get familiar with the terms around the best whiskey to invest in. We’ve talked about whiskey before. You can use our post Different Types of Whiskeys as a guide. Plus, you can head over to our glossary page. It’s a comprehensive list of useful terms. Here is a brief recap of what you will hear:

• Malt whiskey – whiskey produced from only malted barley.

• Blended whiskey – a mixture of malt and other grain whiskeys.

• Angel’s Share – refers to the alcohol that evaporates while whiskey is maturing.

Know what you’re drinking & the value of whiskey

Get familiar with your favorite type of whiskey. It will make the investment process a lot more enjoyable. Novices who are interested in learning more can seek out a knowledgeable bartender who can disperse relevant information about the different blends and whiskey aging. When you visit distilleries and sample different products, consider using a whiskey-nosing glass, a brandy snifter, or even a white wine glass instead of a tumbler. These glasses allow you to fully experience the flavors, aromas, and nuances of the whiskey, helping you appreciate its age and value.

Whiskey Investment Opportunities

There has never been a better time to invest in whiskey. With all the hype and explosion in growth, investment opportunities are favorable. Expand your portfolio with the help of experts at Brindiamo Group. Visit our website for more information about our strategy and advisory services in the adult beverage industry.