Investing in whisky casks is becoming increasingly popular. As we start 2024, here's a simple introduction to whisky cask investments.
What is investing in whisky casks?
Investing in whisky casks is the process of buying a cask of maturing whisky, holding it for a period of time, and then selling the cask when the (now older) whisky can realise a higher price than the original purchase value.
It's this ageing factor that makes whisky casks a particularly interesting investment. It's not just typical supply and demand variables. The whisky improves over time, increasing its inherent value.
Why might you want to invest in a whisky cask?
There are three common reasons why people consider investing in whisky casks. First, to the above point, you're investing in an asset that fundamentally changes; it improves, over time. Second, it's a physical, insurable, asset stored in a government-regulated bonded warehouse. And third, for many people, whisky is a passionate product. It's something we enjoy sipping, sharing, and talking about.
But there are things you should carefully consider. The whisky cask market in the UK is not regulated, so you need to do careful research before you commit. As easy as it is to look at past performance, this has to be balanced by the fact future performance is not guaranteed. And casks are natural, living things; the angels will take their share in evaporated whisky, and wooden barrels can become more fragile over time. So, doing careful research is important.
How to invest in whisky casks
A cask broker can help you with each stage of investing in whisky casks, but as a simple overview, here are eight key stages involved:
- Do your research, understand the benefits and the risks, and find a cask broker you're comfortable working with
- Work out a sensible budget, one that suits you, and makes sure you don't financially over-commit. Remember, this is a sum that you're locking away for several years; a five year horizon is a fair starting point.
- Decide on the style of cask you'd like to buy. There's a world of choice out there. One approach is to think about the types of whisky you enjoy yourself. Do you have a favourite style? A favourite distillery? Are you looking for a young cask, or one that already has some age to it?
- Get quotes on casks currently available for purchase. Benchmark the quoted prices with the rest of the market, to make sure you're paying a fair, not overinflated, price.
- Complete the paperwork and purchase the cask.
- Sit back, relax, and let the cask age. While it ages, it's a good idea to make sure it's insured - for extra protection.
- When you're ready to sell, follow a similar, but reversed process, to that which you followed in step 4. Benchmark against similar casks on the market to get a view of fair sales value, and take this out to potential buyers.
- Complete the paperwork, and sell the cask.
Investing in whisky casks with Spiritfilled
Here at Spiritfilled we help clients around the world to invest in whisky casks. We offer a full service, from helping you work out what type of cask you'd like, through sourcing fairly priced casks, to completing the purchase. We'd be delighted to help, whether you're ready to buy, or simply doing your research. You can arrange an obligation-free conversation with one of our cask experts here.