Whisky is widely considered an affordable luxury by the emerging middle class worldwide. Top brands like Johnnie Walker reported high sales globally in 2013 and 2014, thanks to consumer demand for premium and super-premium products.
Whisky types by volume 2015-2020
Source: Technavio, 2015
Scotch whisky holds single highest market share in the global whisky market. And while other types are expected to chip away at this share through 2020, Scotch will remain dominant.
However, the popularity of Scotch is declining in its traditional markets—the US and the UK.
Scotch imports declined in the US by 7% from 2013 to 2014, partly because of rising popularity of Bourbon, Tennessee, and Irish whiskies. The UK saw similar declines in the same period because of high taxes on Scotch.
But growing popularity in new markets like Brazil, Colombia, India, South Korea, the UAE, Mexico, Russia, Taiwan, Thailand, and Turkey will contribute to the steady growth of the market, at a cumulative average growth rate of 4.79% from 2015-2020. The global Scotch whisky market is expected to top a value of $54.84 billion by 2020.
Whisky investment will be a trend to watch
But far more interesting than geographical presence is a trend towards whisky investment, which is giving the Scotch market a boost. Online platforms, including Whisky Auctioneer, Just Whisky and Whisky Invest Direct have sprung up to give private investors access to maturing whisky. And resources like Rare Whisky 101 are providing detailed information regarding value, to help investors make good decisions.
Want more than just Scotch? Check out our other alcoholic beverages reports.
Private investments are giving distillers enough capital to invest in their brand, product, and marketing during the maturation of the whisky. And once it’s mature, investors can sell a product that has (hopefully) appreciated significantly over time.
A CNN article on the subject highlights just how lucrative the market can be:
“According to the Investment Grade Scotch index that is compiled by UK-based Whisky Highland, the top 100 whiskies appreciated by an average of 440% in the last six years.”
In 2014 alone, the Scotch whisky auction market in the UK reported an increase of 68.20% compared to 2013, reaching 33,998 bottles of single malt Scotch. The value of the auction market surpassed the volume in the same year, growing by 69.37% in 2014 to reach $11.94 million. The high growth was propelled by the increase in the number of the new online auctioneers.
It’s a unique crowdfunding solution that appears to provide the best of both worlds for distillers and investors.
What defines the price of whisky?
A number of factors impact the price of whisky, including whether the distillery is operational, shut down or silent (closed, but may be re-opened), the age of the whisky, and limited editions.
And when you’re dealing with the long-term maturation of a product, there’s a good chance the original distillery could shut down, thereby making the whisky rare and more valuable.
For example, the price of one of 6,000 bottles of Port Ellen, a distillery that shut down in 1983, was $157 in 2001. That bottle sold at a price of $3,136 in 2014.
Age is another factor that increases the auction value. Additionally, the year it was distilled and the number of years it was in barrel are taken into consideration.
The most expensive bottle ever
According to NPR, a bottle of 64-year-old Macallan single-malt sold for $460,000 in 2010. However, the most recent information we could find on this was from 2012, so if you know of a more expensive bottle, let us know.
