Scotch single-malt whisky is an exceptional, top-quality product. Its unique flavour spectrum and renowned heritage mean it is increasingly in demand. The growing scarcity that increasing demand brings has thrust Scotch single-malt into the spotlight for serious investors. They value whisky primarily for its historic yields and the attractive potential that entails.
Research by Scotch Whisky International into the value development of more than 600 different whiskies revealed that Scotch single-malt whisky saw an average annual value increase of 6.6% between 1936 and 2008. On the graph, you can see the average annual yield for bottles sold on THE SWEX, formerly the World Whisky Index, since its inception in 2007.
Whisky has shown stable, long-term value growth. Compared with other investments, whisky seems less sensitive to global events such as wars, disasters, and financial crises.
The bottles on THE SWEX are the legal property of the investors. That means your investment is always backed by ownership of a scarce, high-quality, physical product.
Whisky can be stored in the bottle for decades while hardly compromising its quality. That allows you to make moves when it is most convenient for you.
To bring a new batch of whisky to market, distilleries combine several casks of whisky during the bottling process. Legislation requires the age of the youngest whisky in the bottle to be listed on the label. That means it always takes a minimum of 25 years to make 25-year-old whisky.
Aged single-malt whisky is a pre-requisite for producing blended whiskies. Because of that, the blended whisky industry alone has created a structural demand for aged single-malt. Decades ago, the demand for whisky was considerably lower than it is today, meaning distilleries produced far less. Finally, whisky is also a consumer product, so a certain amount is also consumed. This combination of factors means there is very little aged whisky left.
Scotch single-malt whisky was first sold outside Scotland in the late 1960s. Since the 1990s, global demand has skyrocketed, particularly in Asia, especially Japan, and in large parts of Europe, including the Netherlands. Today, Russia, India, and China are all important emerging markets, which means that the demand for exclusive Scotch single-malt whisky is constantly rising.
Whisky is tradable worldwide. As an investor, you are not dependent on the situation in one specific country. Whisky can also be traded on the stock exchange just like shares.
The Scotch Whisky Association represents and protects the interests of the Scotch whisky industry. The strict regulations around the production of Scotch single-malt whisky ensure a high standard of quality.
Investing can be a money-making endeavour, but there are always risks. If you want to invest, make sure your investment matches the level of uncertainty you are willing to accept. It helps to decide how much risk you are prepared to take. We do not recommend investing with money you will need within the next 3 to 5 years.
What are the key risks?
