From Barrel to Bank: The Complete Guide to Whisky Cask Investing

Anyone who wants to be able to diversify their investment portfolio will be actively looking for new opportunities, and for many people, a decision is made to follow a passion. Cask whisky is a classic example because it allows people to invest with the prospect of securing a long-term return, while at the same time embracing something they love. 

To show you how the process works, we’ve created the ultimate guide that will take you all the way from barrel to bank. 

Why does cask whisky appreciate?

Although no one can say with 100% certainty whether or not a specific cask will go up in value, the general trend is that as whisky ages, it typically becomes more valuable, particularly for highly sought-after casks. This occurs for a variety of reasons: 

• Whisky matures and ages when left in a cask, allowing it to develop a flavour that is truly unique
• Popular whiskies will see higher demand, which in turn pushes up the value of the remaining casks, particularly if there is a limited number of bottles available of a particular expression
• Casks produced by prestigious distilleries will often carry a higher value in the market, as they are more desirable 

If we accept that whisky is a tangible asset with value that can increase over time, we then have to figure out which type of cask whisky to buy. As with many things in life, not all casks are created equal, meaning that a careful, pragmatic strategy is required to secure a return on the investment. 

The risks of cask whisky investment

Buying up as many casks as you can is not necessarily the best approach, especially if you don’t know very much about the intricacies and nuances of the ageing process. You should do your due diligence and work with a knowledgeable company that can help you procure casks from renowned distilleries or casks of particularly desirable whisky. On top of this, even seemingly simple things, such as the storage temperature, can have a significant impact on the value. Damage to the wood, undetected evaporation, and general mistreatment can all turn a once-valuable investment into something that is worth very little. 

In addition to the above, it’s also important to remember that cask whisky investments will be subject to the same market fluctuations as every other class of asset. Like all investments, values can go up and down. The key is to adopt a long-term strategy so that you can move beyond short-term ups and downs in the market.

How to find the right cask

Just because no one can guarantee a return doesn’t mean you are better off going it alone. The best approach is to speak with an expert in the field with a track record and who is willing to guide you through the process. In an age where so much of what we do financially is online, there’s a lot to be said for meeting an expert in person. 

“We actively encourage people to come to our office or Knightsbridge store to meet us. Any company that shies away from meeting face-to-face should be met with a good degree of caution,” says Alphie Valentine, Co-founder of Hackstons, a whisky specialist that offers opportunities for both investment and consumption.

It’s the unique blend of knowledge, passion, and experience that companies like this are able to offer that makes the difference. They will be able to guide investors through their options and present opportunities based on expert understanding and market awareness. 

Verifying that you own the cask

Cask whisky is an investment many people choose to make because they have a passion for the spirit. Scammers and fraudsters understand that they can use this to their advantage and convince savvy investors to make choices they wouldn’t make otherwise with different types of assets. This is why ensuring you have robust proof of ownership of the cask is vital. 

A Delivery Order will confirm what is inside, where it is being stored, and who owns it. Having this document is the best possible protection against fraudulent schemes and scams. Without such a document, you may not be able to prove you have full legal entitlement to the cask. 

Choosing where to store the cask

Cask whisky needs to be stored in HMRC-bonded warehouses, and furthermore must be kept in highly specialist, temperature-controlled conditions. This is why companies like Hackstons have partner warehouses where skilled and highly trained technicians ensure everything is as it should be. A cask that is improperly stored or handled can quickly lose its value. 

Deciding how long to keep the cask

Investing in cask whisky is very much seen as a long-term investment due to the nature of the market. Many companies will have a minimum hold period of 5 years; however, more and more cask investors are realising that the more promising returns come when you hold for 10, 15, or even 20 years. Whisky matures year by year, with many casks appreciating as they age. Casks that are sold off and consumed in the meantime will reduce the overall number of casks on the market, typically increasing their value in the process. Using the expertise of a team like Hackstons, you can make sure that you keep the cask for the right length of time to maximise the size of the return. 

Cask whisky exit strategy

Many cask whisky investors choose to eventually sell their investments, either to other cask whisky investors or even through auctions. Outside of this, some cask owners choose to bottle their casks, and even enjoy the whisky, sell the bottles for a profit, or a combination of both. There are several different exit strategies, and any reputable cask whisky company will help you choose the best for your goals and ambitions.

The best approach, as with any type of investment, is to be pragmatic and start by connecting with an expert in the field who can offer social proof, like with Hackstons on Trustpilot. They will be able to answer any questions or queries you may have and outline how the process works, so that you can invest with complete peace of mind.