Fine Whisky Investment
By Jeremy Howard, CEO & Co-Founder

Fine Whisky Investment

Performance Update

Fine Whisky Continues to Shine

Fine Whisky has had a spectacular decade.  It is one of the very few asset classes to have outperformed fine wine since 2012, and it has trounced mainstream assets like equities and bonds.  Since January 2012, Fine Whisky prices have risen by a staggering +520%. 

Whisky's Exceptional Investment Performance

Fine Whisky’s Profile is Growing

Fine Whisky’s profile as an investible alternative asset is, not surprisingly, increasing around the world.  In their current Wealth Report 2022, Knight Frank highlight how Fine Whisky has outperformed alternatives such as art, cars, watches or coins over the past decade. 

Whisky Outperforms Collectibles

Fine Whisky:  No Correlation with Mainstream Assets

Fine Whisky prices are almost totally uncorrelated with mainstream assets.  In fact, Fine Whisky has been negatively correlated with most mainstream assets (oil being the exception) over the past 10 years. 

This lack of correlation increases the value of Fine Whisky as a portfolio diversifier significantly.

Low Whisky Correlation with Mainstream Assets

Fine Whisky’s Sharpe Ratio is Off the Chart

Fine Whisky is not a volatile asset.  The monthly volatility of the main whisky index is only around 5%.  This compares with almost 15% monthly volatility for the S&P500. 

Very high returns, coupled with extremely low volatility, result in a Sharpe Ratio (where return is measured against risk) which is exceptionally high. 

Whisky High Sharpe Ratio


The Fine Whisky Cask Market

The Secondary Cask Market Takes Off at Cru

We appointed our dedicated Whisky expert, and entered the Fine Whisky cask market, in May 2020. 

Since that time, we have sourced just over 500 whole casks.  These we have placed these with collectors in Europe, Asia and the Americas.  In addition, we have developed the world’s first genuine whisky cask exchange, on which clients can buy and sell casks with the click of a mouse. 

Understandably, not many clients have yet offered their casks for resale, but those who have taken early profits have realized some excellent gains:

Secondary Market Sales on Cru’s Cask Exchange

Secondary Market Sales on Cru’s Cask Exchange

For obvious reasons, whole whisky casks are never going to be the most liquid markets, but we are pleased by the level of activity so far.  And it is re-assuring for holders to know that they can offer their casks on our exchange and expect a quick sale (so far with impressive returns). 

Independent Bottler Relationships Developing

In addition to the cask exchange, we are developing relationships with top independent bottlers such as Gordon & MacPhailStiubhart Single CaskThe Bottlers and Gleann Mor

Gordon & MacPhail

We have already bottled our first cask for a client who purchased a cask through our programme.    

We know that many of our cask collectors aim to bottle and consume the contents of their casks, but for those who are looking to sell in the future, the independent bottler community is going to be an important source of liquidity.

Whole Cask Supply is Drying Up

According to Rare Whisky 101, the 30 most desirable Scottish distilleries amongst global collectors are:

Whisky Distilleries Ranked

The above list is a good place to start when building a cask collection right?  Well … not so fast. 

The sad truth is that the majority of distilleries on this list release no new whole casks (neither aged inventory nor new make) at all.  Those coming to Fine Whisky collection from fine wine, where even if the supply is tight, at least there is always a new vintage of Domaine de la Romanée-Conti each year, must adjust their expectations. 

Casks which do appear on the secondary market from distilleries like Glenlivet, Glendronach, Bowmore, Clynelish, Springbank or Ardbeg are almost always from private collections, usually dating back to the 1990s (with price tags to match).  

Macallan is broadly the same these days.  The casks we occasionally see the market are almost always from either private individuals or cask bonders / brokers, not from Macallan itself.  At the moment, Macallan’s owner Edrington is not putting new casks into the market at all as Macallan shifts its focus to younger bottlings made in larger quantities. Other Edrington makes are currently still tricklingly onto the market, but we expect the supply of Whitlaw (Highland Park) and Glenshiel (Glenrothes) to begin to dry up now also.  Caol Ila is likely to be pulled from the market by Diageo to replenish its own stocks and Dalmore and Bruichladdich will likely go through a period of limited availability over the short to medium-term.

And believe it or not, that is the good news! 

Distilleries like Lagavulin has never been offered on the cask market, not even going back to the early 1990s.  Glenmorangie has similarly almost never sold whole casks.  Talisker and Clynelish have also now been long absent from the cask market.  The closed (“silent”) distilleries of Port Ellen, Brora and Rosebank are all but impossible to source in cask form these days; the tiny number of casks that remain unbottled are just too valuable. Among the newer distilleries in the Top 30 list, Daftmill does not sell whole casks, and Ardnamurchan only sells to their own private cask club.

For those distilleries which do still offer whole casks, naming rights are the issue.  Glenfarclas and Laphroaig do sometimes release whole casks, but these cannot have the name of the distillery printed on the bottle label.  Balvenie and Glenfiddich can occasionally be accessed, but these must be labelled as “Blended Malt”.  Glenfarclas casks can only be bottled as “unnamable Speyside” (which not exactly what most high net worth individuals want to put on their treasured bottle’s label! 

All the above means that the whole Whisky cask market is much smaller and tougher to access than many realize.   

Among those distilleries where there are casks to be found, Highland Park, Aberlour, Glenallachie, Craigellachie, Mortlach, Ben Nevis, Bunnahabhain, Arran (Lochranza) and Glen Grant are especially the focus of collectors’ attention right now.   

We are working hard to identify and source the above and other promising ‘up and coming’ distilleries where prices are still reasonable and where new make cask can still be attained. 

Our current ‘Top 10 Up and Comers List’ is:

Top 10 Up and Comers List

Which is Best:  ‘New Make’ or Aged Casks? 

As at vineyards, each year distilleries produce new casks of newly filled spirit (called “new make”).  We are often asked whether it is better to acquire casks immediately upon release, or seek out older barrels which have already seen some aging.  It is a bit like asking wine collectors if it is best to buy en primeur or not.

The answer of course depends on the time horizon of the collector.  Our analysis shows that new make casks generally provide the lowest price entry point, and hence have the highest long-term financial return potential.  But if the objective is bottling and consumption, then obviously a 2023 cask isn’t going to be as attractive, and all whisky needs a period of years of maturation in barrel. 

For example, a new make cask of (say) Royal Brackla from 2023 would most likely have the following pricing (as an example only):

Royal Brackla Example

When we compare the implied bottle price in this example cask of US$13.0 with the current price of Royal Brackla bottles in the secondary market, we find at that the implied rate of return on the cask is very high indeed.  But this only because the initial purchase price is so low (because it is a new make cask):

Royal Brackla Secondary Market Bottle Pricing

There are other factors to consider on the ROI calculation, such as the ‘angel’s share’ rate of evaporation, the costs of bottling etc.  Obviously the younger the cask, the more the angels will consume prior to bottling.  But the point is clear that if financial gain is the primary objective, then new make casks generally offer the best potential. 


Prospects for 2023 (and beyond)

Price Consolidation

Fine Whisky prices have cooled slightly from the frenetic pace of the last few years.  The main Whisky indexi is off -2.3% from its peak in June 2022.

Given what has happened in mainstream asset classes over the past 18 months, it is not surprising that a small correction is playing out in Fine Whisky, given the price performance over the past decade. 

How far will this correction go?   Is there a crash on the horizon for Fine Whisky casks?   We would very much doubt it.  For a crash in any asset, you need a significant volumes of forced selling.  What we are seeing right now is the reverse.  But as we enter 2023, we find many distilleries pulling back from offering new spirit into the market. 

Macallan Cask

As we saw above, most top distilleries offer no casks whatsoever, at any time.  Supply of the remaining new make and secondary casks is tightly controlled by a handful of players.  These are accurately conscious of secondary market conditions, and with Whisky not under any time pressure to be sold, whenever prices flat-line they tend to withhold supply to allow the market time to breath.  This is what we are now seeing, with major participants like Edrington (Macallan) not releasing any new casks onto the market currently.

Consumption Demand Remains Robust

Whisky consumption growth around the world remains remarkably strong.  The world Whisky market (by value) is expected to grow at a CAGR of +12.4% between 2022 and 2032 to a staggering US$550 billion per annumii

Some of this growth will inevitably spill over into the top end, especially given the simultaneous growth in the global high net worth community discussed below. 

Much of the growth in Whisky markets is coming from the world’s faster growing economies, which bodes well for the medium to long-term outlook:

Whisky Consumption per Country

S&P forecasts that India’s annual nominal gross domestic product growth will average 6.3% through 2030.  Similarly, Morgan Stanley estimates that India’s GDP is likely to more than double from current levels by 2031, with India surpassing Japan and Germany to become the world’s third largest economy by 2030. 

Analysts at Future Market Insights find that demand for Whisky amongst Millennials is holding up much better than for beer and wine.  This provides further comfort that the market rests on very solid long-term fundamentals. 

Rum Casks

With whisky casks collecting gaining in prominence, the search for similar opportunities has led to other high-quality, well-regarded, aged spirits.  Rum, in particular, has emerged as a particularly popular option for those looking to branch out from whisky - or perhaps just seeking better value as whisky cask prices climb.

Rum has many of the same attractive elements:  as with the distinctive regions of Scotland, Rum has many flavour profiles based on its origin - from the heavy Jamaican and naval Rums, to the lighter golden Rums of the Dominican Republic and Central America, and again to the classic Rhum Agricole of the French Caribbean.

High Net Worth Growth Will Drive Demand

At the top end of the Fine Whisky market, demand is driven by High and Ultra High Net Worth Individuals.

Knight Frank report that this group is growing rapidly and has a high propensity to invest their money into collectible assets (16% of UHNWIs wealth is invested into collectible assets).

Knight Frank project that the UHNWI group, who have assets of US$30 million or more, will have doubled in the 10-year period to 2026, growing from 348,355 to 783,671.

Much of this growth will occur in markets which already have a strong propensity to collect Fine Whisky. By 2026 Asia will surpass Europe as the world's second largest wealth hub.  For example, Singapore will have witnessed growth in its UHNWI base of 266% by 2026, to 6,000 individuals.

Knight Frank Wealth Report

As platforms like Cru Markets make it easier for high net worths to access and trade Fine Whisky casks, we believe that interest, and hence demand, will only continue to grow over the foreseeable future.


iSource:  Rare Whisky 101 Apex 100 index.

iiSource:  Future Market Insights