If you are a whisky lover even the title ‘Investments in whisky rise’ may sound like a sin. However, the drink that hundreds of millions of people across the world love isn’t just a popular beverage anymore. In the last ten years, whisky has evolved in becoming an asset that could offer great returns to investors who search for alternative ways to increase their wealth.
According to a recent Wealth Report published by Knight Frank ‘2018 was a transformational year for the rare single malt Scotch whisky’ which led the Knight Frank Rare Whisky 100 Index (KFRW100), which tracks actual UK auction hammer prices to be increased by almost 40% through the year. In the KF survey, it is mentioned that ‘one bottle set a new world record price of £700,000 in October, only to be beaten one month later when another bottle sold for £1 million’. Knight Frank’s analysts noted that whisky prices in 2019 would continue to harden for the right bottles from the right distilleries and interest in more affordable bottles would also increase.
There are more than 120 active distilleries in Scotland and 40 more ‘ghost’ ones which have shut with their produced whisky maturing and sold when the moment is right. Whisky connoisseurs are fond of these bottles as they seeking their rarity and they are willing to pay a high price for them. As a result, the Scotch whisky market is rapidly expanding with whisky exports reaching a staggering £4.7bn figure during 2018. It should be mentioned that the figure amounts for 20% of the total United Kingdom food and drink exports.
Entrepreneurs have found an excellent opportunity to expand their business horizons taking advantage of the rapid whisky price increase. The Single Malt Fund AB was looking to raise up to 25 million Euros which would be invested in a portfolio of rare and limited-edition whiskies. In one of his interviews with Swedish media, the founder of the Fund declared that ‘instead of gold, we invest in liquid gold.’ According to a survey published by another whisky investment fund holding a 9000-bottle portfolio with headquarters in Hong Kong ‘an independent valuation of our portfolio shows it has appreciated at an annual rate of 17% between 2014 and 2017.’
Rare Whisky 101, a well-known consulting company in the whisky industry does valuations of rare whiskies and advises on price trends. Its team of specialists publishes the Rare Whisky Icon 100 Index which tracks ‘100 iconic collector’s bottles…that are highly sought after and regularly traded at auction in the UK.’ According to a press release ‘between December 29, 2008, and January 1, 2018, the Icon 100 index rose from 100 to 555. This appreciation represents an annual rate of return of just under 21%.’
Taking into consideration the data released by reputable organisations, whisky seems to be something more than just a beverage. Firms specialised in selling and storing whisky are available for you to check out and invest with them if you are searching an alternative way to increase your wealth. Take the first step and expand your horizons!