Did you know that you can make an investment in a whiskey cask?

Although when you think of a whiskey investment you will most likely think about your own personal whiskey collection, the fact is there are other places you can put your money, and one of these is to invest in an entire cask. There are many advantages to doing this, and it’s certainly something that is gaining in popularity. Read on to find out more.

Why Choose A Whiskey Cask?

The current economic situation presents a number of benefits to investing in cask whiskey rather than typical assets, such as equities and shares. In no way, shape, or form does the price of whiskey depend on the state of the financial markets. As a result, economic downturns have less of an impact on it. The laws of supply and demand, on the other hand, do apply. An asset-backed investment in whiskey barrels is likewise a physical commodity that the investor owns. Whiskey’s intrinsic worth is mostly influenced by its age and brand, both of which are expected to rise in value with time.

Whiskey’s appeal to investors has increased steadily in recent years. The value of rare whiskey has increased by 564 percent in the previous decade, which is impressive, to say the least. Individual barrel sales are also becoming more prevalent. For investors, the value of interest in whiskey barrels is already estimated at $40 million by the International Wine and Spirit Research Organization (IWSR).

How Does Buying A Whiskey Cask Work?

Casks are held in a government-bonded warehouse once they are purchased. They should ideally be retained for 5 to 10 years and adequately insured. Each barrel holds over 200 liters of whiskey. As the asset owner, the investor receives ownership and titles. The insurance on each 200-liter cask whiskey rises year after year in keeping with the value,
covering any negative aspects. Essentially, when the whiskey sells, you will receive a return on your investment through a percentage of those sales.

What Are The Exit Strategies?

When the investment has matured, investors have numerous alternatives for determining their exit plan. Selling mature stock to current brands and new distilleries in need of matured spirit to bottle and sell to customers is one such technique. With the whiskey market expected to rise, numerous companies will be eager to replenish their inventories. Investors who own barrels might be crucial in this.

In rare cases, the distillery that acquired the barrels may also repurchase back the alcohol that they initially sold. Some even want a “first right of refusal” provision to guarantee they can purchase back their barrels. Several whiskey brokers purchase and sell whiskey on a regular basis already.

For private investors, selling to other private investors or collectors is another option for an exit strategy. The investors want to buy whiskey that has already been matured for at least five or ten years, bypassing the early stages of maturation. Whiskey gets scarcer after ten years because 97 percent of all Irish whiskey sold is between the ages of three to eight
years old, while 90 percent of Scotch sales are between the ages of three to ten.

As you can see, if you have your own whisky cask, you have numerous opportunities to get an excellent return on your initial investment.