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Vyacheslav Rybakov
Vyacheslav Rybakov

Buy Whisky Cask Investment

While the best entry point to whiskey for most retail investors is purchasing bottles with high-end labels, more bullish investors have turned to whiskey casks. Because whiskey is required to age for at least three years, distilleries often endure prolonged periods without an injection of funds from retail sales. As a way to make ends meet and clear up storage space, distilleries often sell their immature whiskey casks to investors. Wholesaling of whiskey casks is now a common way for distilleries to fill the gaps between distillations.

buy whisky cask investment

For investors, whiskey casks are a lucrative opportunity to buy a tangible asset that will gain intrinsic value within a relatively short timespan. While the legal age requirement for most whiskies is a minimum of two to three years, many whiskey casks can potentially appreciate in perpetuity because the liquid only gets better and more expensive over time.

Secondly, the emerging global demand for Bourbon whiskey has made Bourbon barrels one of the most lucrative spirit investment opportunities. According to whiskey cask investment platform CaskX, the average bourbon cask appreciated by over 13% every year since 2010. Since most Bourbon barrels are significantly cheaper than Scotch casks, and the market for Bourbon is growing faster than ever before, Bourbon cask investments could be more lucrative considering long-term market projections.

First off, the market for Scotch whisky has already experienced a period of unprecedented growth. While it's important to watch out for scams and misleading investment opportunities, Scotch is the most established whiskey variety with popular products across all calibers of price and quality. While Scotch investments are usually more expensive, and registering with Her Majesty's Royal Customs can be complicated, the desirability of Scotch whisky makes the value of the casks most likely to appreciate.

While whiskey cask investments often perform better than many traditional assets, the significant overhead poses a barrier to entry for smaller investors. Whisky casks can range anywhere from just over $1,000 at the cheapest to up to $200,000 for the most luxurious Macallan Scotch casks. That said, the typical entry price for an unmatured investment-grade whiskey cask is approximately $4,000. The main caveat to this is that these price ranges vary once you narrow down the options to either Bourbon or Scotch.

Scotch casks tend to be more expensive than Bourbon because the former is more established and in higher demand than the latter. On the one hand, Scotch casks range anywhere from $2,600 to upwards of $8,000. Higher demand translates to higher prices but also means the investment has a more certain return horizon. On the other hand, demand for Bourbon is growing but most brands haven't achieved the level of provenance that established Scotches have. Although the prices for a Bourbon whiskey cask generally start at $1,800 and can exceed $4,000, barreled bourbon prices can go lower or higher depending on several factors.

Aside from the inherent differences between investing in Bourbon casks vs Scotch casks, the main factors that impact the price of a particular whiskey cask are the original distillery, age, volume, and local taxes. Whiskey from distilleries with provenance or strong reputations tend to be more sought after and expensive than ones from less established distillers. While casks from lesser-known distilleries are usually cheaper and have a higher potential for growth, they're riskier to invest in.

Next, age is mostly referring to how long the whiskey has been in the cask, and the age of a whisky is strongly correlated with price. Additionally, distilleries usually have a recommended bottling date, which is a helpful metric for investors to project the ideal duration of the investment for maximum returns.

Most countries with prolific whiskey distilling regions impose significant taxes on whiskey among other alcoholic beverages. While it is common practice for distilleries to include tax in the price of wholesale whiskeys, like cases and barrels, it is important to be familiar with how this expense will impact your investment.

For instance, if an American investor is looking to buy casks of Scotch whisky, Irish whiskey, or Japanese whisky, they should be familiar with local sales and excise taxes in each region. Additionally, international whiskey cask investors must account for customs expenses imposed by local jurisdictions.

Although investing in whiskey casks is easier, faster, and more convenient than ever before, most cask investing schemes are not open to retail investors. While some cask whiskey investing opportunities will advertise as open to all, this is risky because they're often misleading at best or elaborate ponzi scams at worst. One of the best and least risky ways for retail investors to profit from growing demand is by investing in whiskey stocks.

Although it's recommended that retail investors stay away from investing directly in whiskey casks, the space is bursting with opportunities for accredited investors to get a whiskey cask in their portfolio. If you're an accredited investor and think you can benefit from exposure to whiskey casks, the best way to get there is with an alternative investment platform like CaskX.

Investing in whiskey casks is more accessible than ever on CaskX, a barreled spirit investing platform that lets qualified investors buy casks of unaged Bourbon and Scotch and stores them for up to ten years. CaskX's advisors help investors form a strategy according to their risk tolerance, desired investment horizon, and overall budget. Then, CaskX helps investors time the market over the life of the investment to achieve the greatest possible returns.

Through our relationships and ties in the global whisky industry we have access to the best deals. Instead of brokering, we purchase these in bulk in order to secure the best deals at the best prices for our clients.

Whisky maturation is halted after bottling. Casks, however, continue to mature as time passes. The longer one waits, the older and more valuable the whisky within the cask will become. The phrase has never been truer, with cask investing, time is money.

Any business, including both old and new distilleries, needs cash to run. Whisky, however, needs to mature for three years before it can even be called whisky. This is law, but several more years are usually necessary for the liquid to reach optimal colour and flavour. During this important time, distilleries choose to sell new make and young casks in order to remain operational. This is where investors comes in. Selling casks keep the lights on for new, exciting distilleries and investors make that a possibility. Join a new distillery and become a part of the exciting journey ahead. Investment and adventure, all in one place.

Independent bottling companies purchase casks from distilleries in bulk, blend the whisky, bottle it, and build new brands. Most bottlers select only the finest casks and have built powerful product ranges centered around strict quality standards. These companies often have ties with distilleries which span back decades, and tend to trade casks as a side business to their own labels. After distilleries, these companies are the one of our main sources of casks.

Across retailers, social media, coverage, and whisky communities we find which distilleries have the largest and most loyal fan bases. We gauge popularity and seek out rising stars to offer our clients casks with the most potential to grow.

We seek out whisky brands that are rising, yet have not reached their peak. Looking at core bottle prices, auction results, and secondary trading we examine the market demand for every brand we work with.

Braeburn Whisky does not currently offer whisky casks in the United States of America, or otherwise do business within the country. Braeburn Whisky will not accept offers to purchase whisky casks from persons in the United States of America.

Since the UK lockdown was established in March, investment in cask whiskey has continued to grow. This is despite being in the midst of a global financial crisis. In total, investors have spent 3.5m buying casks wholesale through Whiskey and Wealth Club, equating to 197.5 pallets or 1,185 casks.

Investing in whiskey casks has several advantages as opposed to traditional investments, such as stocks and shares, particularly in the current economic climate. Whiskey is not directly tied to any financial markets. Therefore, it is not as significantly affected by shocks such as economic recessions. However, supply and demand can definitely play a role. Whiskey casks are also asset-backed, with investors purchasing a tangible commodity which they will own. The value of the whiskey itself is largely determined by its age and brand and will increase over time.

In recent years, whiskey popularity with investors has continually grown. In 2020, rare whiskey topped the Knight Frank luxury investments index, rising by 564% in value over the last decade. The individual sale of casks is also growing in popularity. The value of interest for Scotch whisky casks by investors is already estimated at $40m according to the IWSR, the global benchmark for wine and spirit data.

Distilleries will produce new make spirit, which has to be transferred into casks for the maturation process. Ideally, this is between 5 and 10 years. The whiskey-making process itself is capital and labour intensive. Notwithstanding the fact that distilleries must wait years to sell their whiskey to make profits, due to the ageing process.

To help cover these costs and raise capital, distilleries will sell some of their casks to individuals or funds. Typically, this was reserved for a select few who would purchase whiskey casks direct from the distilleries. However, this market has now been opened up to more investors through brokers such as Whiskey and Wealth Club, which can acquire casks at heavily discounted rates. 041b061a72


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