Sponsored by Tomoka Casks
During one of the most challenging years in recent decades, whisky is one of the few investments bringing comfort and cheer both to investors’ pockets and to their glasses. Whisky is now a top-performing alternative asset, with Scotland exporting £4.9 billion-worth of this literal liquid gold each year.
“According to the Knight Frank Rare Whisky Index the whisky sector has surged 586% over the last 10 years, the highest growth of any luxury asset”, explains Jass Patel, CEO of whisky investment company Tomoka Casks. “Even during the ongoing Covid-19 pandemic whisky has remained very buoyant with consistent 5% growth across the sector..”
While investors may be familiar with the burgeoning market for rare whisky bottles, the most lucrative and secure part of the sector is whisky cask investment. Returns on whisky casks over the past two years have outperformed Bitcoin, gold and the S&P. “By purchasing a cask of whisky direct from a well-known distillery”, Jass elaborates, “investors are able to enter the market at the earliest possible moment. Owning your own bespoke cask of whisky not only appeals to whisky connoisseurs and collectors, it also makes very sound economic sense.”
A key advantage of investing in cask whisky over bottles is the remarkable transformation that the whisky undergoes as it ages in the cask. Unlike bottled whisky, cask whisky continues to evolve and develop in the barrel. As the whisky takes on the rich, smoky character of the barrel, it becomes both more complex and more desirable, driving an average annual gain by value of at least 9%.
Along with this remarkable transformation of the liquid itself, cask whisky also increases in rarity as it ages as the number of similar casks in existence dwindles. A cask of whisky is truly a unique work of art since the whisky inside will mature slightly differently in each individual cask. Purchasing a cask of whisky gives you access to something no one else on the planet has, and that rarity factor commands a premium on the secondary market if you do eventually decide to sell.
Jass notes that the whisky cask market also offers investors much greater peace of mind and security. “Most of our casks are securely stored at the original distillery which ensures impeccable provenance and authenticity. This also comes with significant tax benefits as VAT only becomes payable when the whisky is actually bottled and moved from the distillery.”
If you’re thinking about investing in a cask of whisky, Jass points out that another important consideration is the age of cask that you choose to invest in. “New make casks will provide a higher growth rate by percentage of around 15% per annum, whereas older casks will typically provide a larger monetary return. The caveat is that the initial investment required to acquire a more mature cask will be significantly higher compared with a younger cask.”
Investors should also carefully consider the origins of their whisky cask. While Scotch remains the classic choice for many collectors and Japanese whisky has surged in value in recent years, the highest-performing casks right now actually come from the Emerald Isle. “Irish new make is providing an even better return closer to 16% as Japanese whiskey is in such short supply”, explains Jass, “so we would definitely advise spreading your bets across a range of investments to get both medium- and long-term returns.”
Knowing exactly which cask to invest in to secure the highest returns can be tricky for those of us who aren’t seasoned whisky experts. Jass strongly recommends that investors speak with a trusted whisky investment company like Tomoka Casks who can guide you through every step of acquiring your very own cask.
“Purchasing your own cask isn’t as simple as approaching a distillery with an offer,” Jass explains. “At Tomoka Casks our team has decades of experience in the whisky sector and we use our industry-leading network of contacts to source high-performing casks for our clients. I always recommend that investors do their homework when deciding to invest in whisky casks. That is why our door is always open to those wanting to discover more about whisky investment.”
For more information about investing in whisky casks, please visit www.tomokacasks.com.