It’s boom time for rare whisky. But before you stock your bar cart with alternative assets, there are things you should know.
By HELEN HAWKES
WHILE STOCK MARKET volatility continues, the value of rare whisky is rebounding handsomely as we farewell the worst of the pandemic, cementing its place as a legitimate alternative asset class. From 2009 to 2019, the category rose by 586%, according to Forbes. And while whisky recorded a Covid-induced blip in 2020, the value surged an estimated 17.5% last year, according to the analysis and brokerage service Rare Whisky.
“The pandemic has shown us that physical assets, such as whisky, have become ever more popular,” says Rare Whisky co-founder Andy Simpson. “When combined with a growing global consumer thirst for single malt, which shows no signs of slowing, we see no reason why prices will not continue to rise for the right bottles.”
Today, collectables represent a sizeable and growing portion of the worth of wealthy individuals, and premium whisky is fast becoming a more valuable resource than luxury watches or jewellery.
One of the most striking but overlooked outcomes of the pandemic has been its acceleration of global trends, including alternative asset classes. Jay Bradley, founder of The Craft Irish Whiskey Company and the Whiskey & Wealth Club in Ireland (soon to open an office in Sydney), says, “Even before then, FT Adviser reported that alternative assets under management doubled between 2008 and 2017, and were projected to hit $US14 trillion [$AU19.3 trillion] by 2023.”
Whiskey & Wealth Club CEO Scott Sciberras adds, “With interest rates so low and inflation on the rise, it’s no surprise that whisky is the fastest-growing alternative investment on the planet.”
Great Scot
While a whisky’s brand and age help to determine its value, limited supply is crucial to solid returns. Bladnoch Distillery’s Will Pitchforth says astute collectors are making good money on bottles purchased from closed distilleries, adding that single-cask whiskies are often more collectable than blends and mass-produced single malts because the number of bottles is limited.
One of the oldest and most prestigious brands currently trading worldwide, Bladnoch is 204 years old and has been reinvigorated by the Australian entrepreneur and philanthropist David Prior. He bought the Scottish distillery in 2015 after selling his organic yoghurt business, Five.am, for $80 million. At the time of his purchase, Bladnoch had not produced new whisky for nearly a decade. Today, it is operating 24 hours a day, seven days a week.
Prior has brought two brands to market under Bladnoch Distillery: Bladnoch, the namesake brand, a line of rare single malt Scotch whiskies; and Pure Scot, a premium blended Scotch whisky that has garnered several awards at international spirits competitions.
In 2020, the company’s revenue increased by 50% and its whisky output reached some 1.5 million litres a year (granted, this is small fry compared to Scotland’s venerable The Macallan, which produces about 10 times that amount).
Pitchforth, who has also worked for Pernod Ricard, the world’s second largest producer of wine and spirits, says Bladnoch has seen a substantial growth in collectors over the past two years. “Bladnoch is a bit of a hybrid, in that it was closed for a time and has a very limited number of casks of whisky distilled 10 to 20 years ago, and now rare releases that complement our core range of younger whiskies.”
Bladnoch’s 29-year-old Bicentennial Release, which was produced to celebrate the 200th anniversary of the distillery, was limited to just 200 bottles. It currently sells for $8,000 apiece and is likely to appreciate considerably. A two-year-old bottle of Bladnoch’s Waterfall whisky, released once a year and originally retailing at $200, is now selling for up to $1,000 at auction.
Record highs
In 2019, a bottle of Macallan distilled in 1926 sold for £1.5 million ($AU2.75 million), smashing previous records for the most expensive bottle of wine or spirits sold at auction. Other notable sales include a Springbank 50 Year Old that was distilled in 1919, which fetched £183,750 ($AU339,000), and a 55-year-old bottling by Yamazaki that sold for $HK6.2 million ($AU1.09 million).
However, Sotheby’s spirits specialist Jonny Fowle cautions against overestimating the value of a whisky’s age. He points to the independent Scottish bottler Gordon & MacPhail, which offers well-aged single malt bottlings from established distillers, including Mortlach 75 Year Old and Glenlivet 70 Year Old, but has also released highly collectable bottles that are less than 10 years old.
One of the most recent bottlings to have piqued the interest of collectors around the world was the first whisky released from the Highland distillery Nc’nean in 2020. The fledgling distillery broke a world record when it sold its inaugural single malt for £40,004 ($AU73,700) at an online charity auction.
As with all investments, due diligence is essential, says Bradley. “Investors need to understand everything they can about an asset before they commit.”
‘WITH INTEREST RATES SO LOW AND INFLATION ON THE RISE, IT’S NO SURPRISE WHISKY IS THE FASTEST GROWING ALTERNATIVE INVESTMENT ON THE PLANET’
Bottoms up
Of course, acquiring knowledge involves sampling the product. Distillers and whisky experts always recommend purchasing one bottle to keep, one to enjoy.
Scotland is the world’s biggest whisky producer, and has been for more than a century, but closer to home, Victoria also has a long history of whisky-making, with the country’s first major distilling industry starting here in the mid-19th century. Today, it is also home to a growing throng of specialist bars, including Whisky & Alement in Melbourne’s CBD, which has more than 700 whiskies on the menu, among them some of the world’s rarest.
According to the bar’s co-owner Julian White, a current favourite with collectors and connoisseurs is Bandages on a Mer maid’s Flipper, a 29-year-old bottling from a single cask that would have yielded fewer than 300 bottles. A 30-millilitre splash of this drop from The Scotch Malt Whiskey Society is priced at $101.50. “So many habits have been born in our bar and so many collections inspired,” White says. Practice is the only way to develop your palate, and enjoying a rare whisky with a group of fellow connoisseurs is one of the great joys of collecting.