Despite last year’s uncertainty, cask whiskey sales have continued to soar – but what are the key trends predicted for 2022? Alistair Moncrieff, Managing Partner at Whiskey Investment Partners speaks db through them…
Whiskey as an investment has seen huge rises over the past ten years, up 546% in the ten years to 2020 according to the Knight Frank Investment Index 2020, and although it there was a slight decline in some of the ultra-rare luxury bottles in 202o (the Knight Frank Whiskey Index (KFWI) fell 3.5% in 2020), the larger end of the market remained buoyant, l Rare Whiskey 101 Apex1000 index up nearly 8% in 2020). Meanwhile, the IWSR notes that investment in casks (a longer-term investment) is increasing and is now valued at $40 million.
So what are the trends to watch?
Topping the list is technology and the rapid rise of new business models and technologies in the whiskey industry, says Moncrieff. Already, companies are using blockchain technology for whiskey cryptocurrency and NFTS – and there have been partnerships with some of the world’s biggest distilleries, including Macallan, Dalmore, Bowmore and Glenlivet, which offers a modern way to buy or own shares in cask whiskey.
“It’s clear that the whiskey industry as we know it is entering the modern era, as even the most traditional players in the market are beginning to embrace the technology,” says Moncrieff.
Sustainable practices are also on the agenda in the wake of COP26 – and increasingly there is a conversation to use whiskey waste to replace fossil fuels, which will help the whiskey industry to become net zero. Glenfiddich, for example, has already announced that it is treating its waste to produce methane to power its specially adapted delivery trucks, while a Glasgow-based biotech company Celtic Renewables, set up in 2011 and specializing in turning leftover waste from the whiskey-making process into chemicals similar to those produced in oil refineries, which he says can be used as a direct replacement for gasoline.
In recent years, younger premium spirits (typically eight years old or younger) have increasingly captured the attention of international judges and won awards on the world stage. As these whiskeys become more prevalent, thanks in part to new technologies and maturing techniques, they are becoming increasingly attractive as investments. Moncrief says The Glasgow Distillery and Octomore (Bruichladdich Distillery) are ones to watch.
Cross-brand collaborations have also been a key trend, gaining popularity and demand globally. “As whiskey goes mainstream, luxury brands in particular are looking to engage and partner with whiskey brands to tap into the romance of whiskey and capitalize on audience crossover,” Moncrieff says. Notable collaborations include Bowmore x Aston Martin, which result in a limited edition range, with branding and creative assets.
“This is a tactic worth considering for smaller distilleries or luxury brands looking to leverage brand equity, and a trend we expect to see more brands dive into,” Moncrieff added.
The team predicts that with a volatile stock market and continued uncertainty over Covid-19, 2022 will be a good year for whiskey cask investing. Although tangible assets are generally safer, supply issues related to Brexit and Covid-19 are likely to persist, limiting supply as global demand increases. From an investment perspective, however, this scarcity of good quality malt Scotch whiskey casks means values are rising.
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