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WHICH DISTILLERIES OFFER THE BEST RETURNS?

Updated: Mar 27

This is a special post written by our guest writer Sharon Chan

The Scotch whisky industry offers a range of casks—such as bourbon barrels and sherry butts—that come with their own sets of benefits. But which distilleries offer the best returns for investors in terms of returns on investment and capital appreciation?


The weakening of the pound against other currencies and the softening of demand for Blended Scotch Whisky have made sales of these Scotches less lucrative, but there are still plenty of people who have acquired a taste for them. For those looking for great rates of return on their investments, investing in Scottish whisky is a safe bet.



Why are some casks worth more than others?


When choosing a cask, consider the type of wood used, the age, scarcity, and perceptions of quality, as well as brand reputation. Of course, the most important consideration is the distillery it came from. Some distilleries are always considered the crème de la crème. For instance, a sherry cask from The Macallan is a rare and beautiful thing that will immediately capture the attention of investors worldwide—especially those with a taste for fine scotch. However, with experience, knowledge, and the right advice, you can find outstanding investment opportunities at less famous distilleries.


Which casks should I invest in?


Here, we paint a fascinating picture of how Scotland’s distilleries perform. 2020 showed an overall growth across all distilleries of 13%, with some significantly outperforming that figure. How much higher is your favorite distillery going to climb with so many distilleries on the market, it can be hard to separate the investments from the duds. Here are five distilleries selling casks that offer the best investment opportunities, plus a few more that are worth keeping an eye on.


THE SUPERSTARS


1. Laphroaig


For investors who are willing to wait for their casks to mature, the Laphroaig distillery offers a lucrative investment opportunity. The smoky flavor and smooth finish of this single malt make it one of the most distinctive whiskies on the market today. In recent years, its popularity has increased dramatically, resulting in a spike in prices from nearly £500 per cask in 2003 to nearly £800 in 2007.


2. Caol Ila


Caol Ila, a small distillery on the Isle of Islay in Scotland, is a hidden gem that many people don’t know about. It’s been used in blends such as Johnnie Walker’s Black Label, but it’s becoming more popular as a single malt. It has been one of the market’s best-performing investments, with growth exceeding 15% in the first half of 2020.


3. Bunnahabhain


When you are looking for a single malt with a delicate and citrusy taste, then Bunnahabhain is a perfect choice. Its sherry casks make this single malt a favorite among connoisseurs. The quality of Bunnahabhain barrels has increased in popularity over the last few years, making it one of the best choices for investors looking for steady growth above the market rate.


4. Highland Park


Highland Park is located in Orkney, one of the most remote places in the world. The distillery has been producing some of the world’s most highly prized single malt whisky for more than 220 years, and its casks are now highly prized in the market for their quality and rarity. We think they will continue to outperform other distilleries for years to come.


5. The Macallan


The Macallan single malt, a Speyside whisky founded in 1824 and renowned worldwide, is one of the world’s most sought-after scotches. The core range of The Macallan comprises a wide variety of whisky styles. But the emphasis is on sherry-influenced whiskies that are rich in aromas, spicy fruit flavors, and sweet dreams—and therefore extremely rare to find on the open market. If you are lucky enough to invest in a cask from The Macallan, your investment will grow by at least 17% year on year.


THE ONES TO WATCH


1. Linkwood


Despite being located in the Speyside region and producing whisky, the Linkwood distillery is often overlooked next to its more famous neighbors. However, the quality of Linkwood’s casks is unquestioned: The distillery uses high-quality American Oak and Spanish Sherry casks, releasing a small amount of their whisky to the market. Intelligent investors are starting to take notice.


2. Benrinnes


The secret to investing in fine whiskies is to pay attention to the casks they’re aged in. The best casks are made at Benrinnes, a Speyside distillery that produces some of Scotland’s finest whiskies. These high-quality casks end up in Johnnie Walker blends, but select barrels from this distillery have been bottled as single malt scotch and should be valuable over time as consumers learn about their worth.


3. Glen Moray


Since its purchase in 2008, Glen Moray has become one of Scotland’s finest distilleries, and all its malt whisky is aged exclusively in American oak casks that are either sherry or wine finished. It has picked up numerous awards, including Best Speyside Single Cask Malt for the Glen Moray 1994 Sherry Cask Finish at the World Whiskies Awards 2018. Glen Moray is a good value investment if you’re looking for high-quality casks at a reasonable price.


The whisky business isn’t hibernating. We’ve done our best above to share our perspectives about the whisky industry and what we believe investors should take into consideration.


Hopefully, these insights have provided you with food for thought and a good starting point for your research. It’s never profitable to simply put money into something without doing a little research, so it’s always good to take things slow and look carefully at the new stock you’re thinking of buying. Today’s whisky is tomorrow’s investment. While the long-term outlook of stocks is uncertain, whisky offers excellent returns compared to other stock markets. It makes sense that whisky offers satisfactory returns compared to other stock markets – all the more reason to consider whisky as an option when planning your following portfolio.


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