Whisky Investing: A Rising Alternative Asset

Whisky is a drink that has been enjoyed for centuries, but it is not just a beverage, it is also a valuable investment. Investing in rare and investment-grade whisky can offer market-beating returns to investors. Rare Whisky (RW) 101’s Apex 1000 index, which aims to track the top collectible whiskies, has seen gains of over 415% since 2013. Compare that to the roughly 178% return from the S&P 500 over the same time period, and it’s easy to see why whisky investing is gaining more attention in the alternative asset space.

What Drives The Market?

Investment-grade whisky is driven by supply and demand in its purest form. Names like Macallan, Glenfiddich and Yamazaki have developed into incredibly powerful brands over the years and earned reputations for producing some of the most outstanding spirits in the world. They also make them in small quantities relative to larger commercial operations. There is rarely enough supply to meet demand.

The attributes of a 50-year scotch that drive whisky fans crazy can only be attained through time. After being distilled, these rare and collectible whiskies are aged in the barrel for decades in order for the whisky to develop the rare and unique qualities that make them desirable. Special bottlings and aged whiskies experience more demand for their high quality and unique flavors, and as the already small supply of these whiskies decreases over time, bottles and casks experience upward pricing pressure. 

The Key Players

Some of the most sought-after whiskies are typically from Scotland, Japan, and the United States. Single malt Scotch whiskies from well-known distilleries like The Macallan, Ardbeg, and Bowmore are popular choices for investors. For example, the RW Bowmore Rarities Index, tracking bottles from the oldest distillery in Islay, Scotland, has gained 433% since 2013. While these UK whiskies continue to be the blue-chip opportunities, rare or limited-edition Japanese whiskies like Yamazaki, Hibiki, and Karuizawa have dominated performance in recent years.

The RW Japanese 100 Index, an index meant to track 100 of the most iconic collectors bottles from Japan, has had gains of 7.35% over the last 12 months (through the end of February 2023) and lifetime gains of 579.07% since the beginning of 2015.

The most collectible Japanese whiskies take rarity to a whole new level. Some Karuizawa whiskies, for instance, are so rare that they only show up on the market every few years.

This brand has an almost mythical following after it stopped producing whisky in the early 2000s, leading the remaining bottlings to be coveted by collectors and investors alike. The RW 101 Karuizawa index has gained nearly 12.5% over the last twelve months. The enthusiasm is so great that the Karuizawa brand has recently been brought back with many of the original staff.

Vint, an investment management company that allows investors to buy shares in securitized offerings of fine wine and rare spirits collections, recently hopped in on this new opportunity. The company launched an offering to the public to purchase shares in 3 casks of the new Karuizawa whisky. These barrels are part of a historic moment for connoisseurs, collectors, and investors alike, as they’re some of the first Karuizawa whisky produced in more than two decades. The 3 cask sections are significant, considering that only 25 casks of the new Karuizawa will be allowed to be sold outside of Japan.

Investing in Alternatives Like Whisky

The U.S. continues to see volatility in the stock market, with uncertainty over where the economy is heading. The recent banking crisis with SVB and Credit Suisse has only complicated things further, making diversification into alternative assets all the more appealing. In fact, alternative investments under management are projected to reach $17.2 trillion by 2025. 

Investing in whisky through a professional can be more conducive to long-term results, rather than simply storing a few wines in your basement. Investment platform Vint allows investors to invest in shares of whisky through securitized offerings rather than having to go out and purchase an entire bottle or cask on your own. These whiskies can cost tens of thousands of dollars, making securitized shares a more convenient option for many investors looking to gain access to the returns without the huge capital commitments. 

This post was authored by an external contributor and does not represent Benzinga's opinions and has not been edited for content. This content contains sponsored advertising content and is for informational purposes only and not intended to be investing advice. All investors should do their own research, due diligence, and make their own decisions when it comes to investing capital in markets. Please read Vint’s disclaimer