- 25th May 2021
The GPA Luxury whisky investment guide
Investing is a great way to make your money work for you. After an initial payment, you can sit back, relax, and let value accumulate until you’re ready to cash out. Of course, it’s not always easy to decide where to invest in the first place – even if you’re experienced.
If you’re risk-averse, the process can be as simple as putting your money into a savings account or fixed rate bond. If you’re looking for a greater return on your investment, it can be lucrative – albeit riskier – to acquire property or buy stocks or shares in a business.
Another option is to invest your money in high-worth objects that will acquire a higher value over time. The benefit of this is that you can cultivate an existing hobby or passion around the items you collect – whether it’s art, vintage cars, or whisky.
Is whisky a good investment?
Though the rare whisky scene has been flourishing for years, it’s only recently that connoisseurs have begun to treat their favoured single malts and aged blends as important investments. The reason? Rare whisky is more in demand than it’s ever been. Between 2009 and 2019, rare whisky grew in value by a whopping 582% – by comparison, art appreciated by 158% and classic cars by 258%.
This increase in demand has gone hand in hand with renewed investment in distilleries, including the “ghost” distilleries of Scotland, many of which have been brought back to life by Diageo. Improved technology has meant that cask longevity is easier to guarantee, and there is more money to put into packaging and marketing.
Beyond the value of a bottle’s contents, many fine whiskies are now desirable because they come housed in limited edition luxury packs, accompanied with bespoke artwork which – on its own terms – represents a high-worth collectible.
How much does rare whisky sell for?
In 2019, a single bottle of The Macallan Fine & Rare 60-Year-Old (1926) broke records when it sold for just under £1.5 million. A number of other Macallan whiskies, including the Red Collection and Lalique Six Pillars Collection, have also topped the list for their impressive sale prices.
But it’s not just the Scottish whisky scene putting out must-have releases. We’ve also seen some ultrarare Japanese whiskies sell for eye-watering amounts. In 2020, Hanyu Ichiro’s Full Card Series – a set of 54 bottles all representing a different playing card – sold for just over £1 million.
At the more “everyday” end of the spectrum, bottles of whisky can sell at auction for hundreds or thousands of pounds, meaning that even a small-time collector can make decent money.
An excellent way to get an idea for prices is to visit a site like Scotch Whisky Auctions and view recently closed bids. In April 2021, this bottle of Macallan, which comes in a Lalique decanter, sold for £58,000, while this 31-year-old Laphroaig sold for £6,500.
How should I invest in whisky?
1. Do your research
You don’t have to be a whisky expert to start investing, but it’s important not to go in blind. To get you started, here are the basics.
How is whisky made?
Whisky is made using the following processes:
- Malting – the grain (usually barley) is toasted
- Milling – the grain is ground into a coarse powder
- Mashing – the powder is mixed with water and heated to activate enzymes which break down the starch into sugars
- Fermentation – yeast is added to ferment the sugars into alcohol
- Distillation – the liquid is heated in a still and the alcohol isolated and reduced into whisky; this process is repeated two or three times
- Maturation – the whisky is put into casks and aged for a period of time
Each of these steps is important in its own right. The final flavour profile and mouth-feel of a whisky can be determined by all kinds of factors, including the yeast used in the fermenting process, the shape of the still, and – of course – how long it has been matured.
Malt or grain?
Malt whiskies are made from cereal grain that’s been dried in a process known as “malting”. Most malt whiskies are made using malted barley – if a different grain has been used it will be labelled as such e.g. rye malt whisky.
Grain whiskies are made from any type of grain other than malted barley, including rye, corn, and wheat. However, grain whiskies still tend to contain some malted barley, as this contains the enzymes needed for the mashing process.
Single malt, single cask, or blended?
Single malts are whiskies derived from a single distillery using a mash made from just one malted grain. A single malt will usually be sourced from various casks, and blended together. The benefit of this is that the distillery can curate a distinctive flavour profile that remains the same across different releases. Bottles of single malt will bear the name of the distillery and their age.
Blended whisky is a blend of different whiskies from different distilleries. A blend of single malts from different distilleries is known as a blended malt whisky. Blended whiskies usually won’t bear the name of a single distillery.
Single cask whisky is whisky derived from just one cask. Because no two casks are alike, a whisky derived from a single cask is very unique and limited edition. For this reason, single cask whisky tends to be extremely in-demand and expensive.
Who makes the best whisky?
While Scottish whisky tends to dominate the scene, Ireland, the USA, and Japan are all seen as key producers within the whisky world. Each region will have different regulations for how whisky is made and labelled.
To be called a “Scotch”, a whisky must contain some malted barley, and must have been distilled in Scotland for at least three years in oak casks. Within Scotland itself, there are plenty of whisky subcategories, including Speyside, Lowland, and Highland.
American whiskies are far more varied in terms of how they’re made, and don’t legally need to be aged for a minimum period. Popular varieties include bourbon and rye.
Whisky or whiskey?
For ease, we use the “whisky” spelling throughout this article, but in many contexts “whiskey” is correct. The differing spellings of whisky/whiskey tend to be dictated by the region. As a rule, if it’s made in Scotland or Japan, it’s whisky; if it’s made in Ireland or America, it’s whiskey.
2. Start your whisky collection
Starting your whisky collection is as simple as buying that first special bottle. But before you get to that point, it’s a good idea to work out what you like.
Go to whisky tastings
If you’re fairly new to the world of whisky, going to some guided tastings is essential. Go in with an open mind and be prepared to learn. Try to sample a variety of different types – from American bourbons and Irish whiskeys, right up to the finest Scottish single malts.
Remember: an aged whisky from a single cask may be the most expensive on offer, but this doesn’t guarantee an amazing flavour. It’s important to trust your taste buds!
A distillery tour will give you a better idea of the complex processes that go into making whisky and give you the opportunity to sample a brand’s unique flavour profiles.
Additionally, visiting (and researching) an individual distillery will clue you in on their financial situation, and give you an idea of what they have planned for the future – important information if you plan to invest.
Familiarise yourself with the big names
Classic whiskies from established Scottish distilleries tend to be a safe bet when it comes to investing your money, so it’s a good idea to get to grips with what The Macallan, Glenfiddich, and Laphroaig are offering. Staying abreast of new releases from these big names will keep you ahead of the curve when it comes to investing.
Research new names
Though the big names are important, it’s also a good idea to look into less well-established distilleries and newer brands that are stirring up excitement amongst the experts. Investing early in a promising new distillery can be a great way to see healthy returns a few years down the line.
Buy from respected sources
Unfortunately, there is a growing market for “fake” whiskies, so you should always make sure that you shop with a respected seller. Buy directly from established distilleries, specialist retailers like The Whisky Exchange and Master of Malt, and auction houses with a proven track record within the sector.
Look for high alcohol volume
A whisky with a high alcohol volume will have a longer shelf life, which makes it a safer investment.
Seek out rare releases
It’s an obvious point, but releases of particularly rare, limited edition, and aged whiskies – especially those from “ghost” distilleries – are always going to attract more attention, and therefore are more likely to be a safe investment. Rare bottlings that have numbering handwritten on the label are generally more desirable.
Keep an eye out for limited edition packaging
Increasingly, distilleries and brands are releasing special collections of whiskies that come with limited edition luxury packaging, such a bespoke wooden cases or illustrated art packs. Buying a whisky with a limited edition premium pack can be a great way to heighten the value of your investment.
Find a reputable seller
When the time comes for you to sell your whisky and enjoy the return on your original investment, make sure you do it the right way. Retailers like The Whisky Exchange and Master of Malt will buy your rare, aged whiskies and sell them on for you. Alternatively, you can sell through an auction house or a whisky broker.
One key thing to know is that selling whisky online is illegal unless you have the correct licences – so it’s always best to go through an established third party.
3. Take care of your bottles
Once you’ve started your whisky collection, you’ll want to make sure you take good care of the bottles and packaging. To ensure that the precious liquid in your bottles retains its quality for years to come, you should store it in optimal conditions:
- Maintain your whisky at an even temperature, ideally lower than room temperature – excess heat or an uneven climate can spoil the flavour.
- Keep your whisky in darkness and never in direct sunlight – UV light is one of the worst things for whisky, so never leave bottles by a window!
- Store your bottles standing up – this prevents the alcohol from making contact with the cork and degrading the material.
You don’t need any specialist equipment to store whisky, but you may want to create a storage area so that you can display your collection. Deep shelves and glass-fronted cabinets set in a cool, shadowed corner will be ideal for this purpose.
Investment bottles aside, any whisky that you keep for yourself should also be treated well. After opening a bottle, you should aim to finish it within one year – whisky left standing in a largely empty bottle will oxidise. As an alternative, you can decant remaining whisky into a smaller bottle, but just make sure you use glass and not cheap plastic.
It should also go without saying that care should be taken to protect any luxury, limited edition packaging or collectibles that accompany your whisky. A beautiful wooden presentation box that has been scratched, discoloured, or otherwise damaged will reduce the overall value.
Which whiskies should I invest in?
There are no right or wrong whiskies to invest in – you should spend your money on the single malts, blends, ryes, and bourbons that you enjoy the most. Beyond that you can check out the hottest whiskies of the moment by monitoring whisky websites and newsletters.
This whisky investment guide from The Decanter recommends Black Bowmore DB5 1964, Hakushu 18 Year Old, and Johnnie Walker Blue Label Ghost and Rare – a unique blend of eight Scottish whiskies that comes housed in a beautiful GPA Luxury pack. This guide from Bloomberg, meanwhile, recommends labels like Springbank, Mortlach, and Yamazaki.
Luxury whisky packs from GPA Luxury
Here at GPA Luxury, we specialise in bespoke, premium packaging for the world’s top whisky brands. Our award-winning packs are created using the finest materials and craftsmanship, with longevity in mind.
In addition to Johnnie Walker Blue Label Ghost and Rare (mentioned above), we’ve also crafted packs for the following:
Diageo’s Prima & Ultima collection is drawn from eight Scottish distilleries: Caol Ila, Port Ellen, Clynelish, Mortlach, Talisker, Singleton of Dufftown, and Cragganmore. Each presentation case is made from FSC-certified MDF and wrapped in premium white paper flecked with gold foil.
This 40-year-old whisky from the famous ghost distillery of Port Ellen is sourced from nine “lost” casks rediscovered in the warehouse. Our pack has a black wood veneer exterior, and features a hidden drawer containing two keys, which can be used to unlock the whisky within.
Woodford Reserve is an American whiskey, considered one of the finest bourbons on the market. This special edition version comes in a crystal Baccarat decanter and housed in a GPA presentation case wrapped in red, leather-imitation paper, and lined with white satin-silk fabric.
This premium blended Irish whiskey was created in 1984 by two master blenders. Aged in ex-bourbon barrels, the Very Rare is bottled just once a year. The 2017 release comes housed in a sturdy oak presentation box complete with leather detailing and paper lining.
If you’re a brand looking to house your whisky in bespoke, premium packaging, get in touch with GPA Luxury today. You can find out more about our approach by reading this article: Seven tips for creating the perfect luxury whisky pack.