Investing in whisky has become an increasingly popular alternative asset class among investors, especially those with a taste for the finer things in life, as it undoubtedly offers unique benefits that traditional investments cannot match.

Here are eight reasons why whisky could be a smart addition to your investment portfolio:

1. Historical Performance

Historical data shows that the whisky industry has experienced significant and stable growth over the last decade.

Some rare whiskies  have appreciated by over 500% in the last decade, with average annual returns often exceeding 12–15%, outperforming many traditional assets like stocks and gold

 

A few notable examples  include:

• The Apex 1000 index (tracking the performance of 1000 rare whisky bottles) grew by 416% since 2013, outperforming many traditional benchmarks like the S&P 500 at only 178%.
• The Rare Whisky Icon 100 index (tracking the performance of 100 collector's bottles) grew by 478% since 2014.
• The Rare Whisky Vintage 50 index (tracking the performance of 50 oldest bottles) grew by over 600% since 2014!

2. Low Risk

Investing in whisky carries a lower risk than other investments, such as stocks and bonds.

Whisky is a tangible asset that can be easily stored and held for the long-term, which means that its value does not fluctuate as much as stocks and bonds. It is also less susceptible to market manipulations or cyber risks.

3. High Returns

Whisky investments can offer higher returns than other investments. Rare and vintage whiskies can appreciate in value by as much as 20-30% a year, not even considering normal inflation, making them a great investment for those looking to generate a solid return. 

 

A few examples include (both in SA and internationally):

• The Macallan Estate increased from     R2 600.00 retail in 2021, to around      R7 000.00 average selling price in 2024 - A return of over 168%. 
• The 2016 release of the Macallan 18-Year-Old increased from $463 in 2020, to $1 209 in 2022 - A return of 161%.
• The 1961 Bowmore 50-Year-Old increased from $59 969 in 2020, to $96 923 in 2022 - A return of 61%. 

4. Market Growth

In recent years whisky has grown exponentially in popularity as both a drink and an investment opportunity.

 

In 2021, the whisky market was valued at $79.6 billion and is predicted to grow to $109 billion by 2025.

 

Also, investing in whisky has become a popular investment amongst younger investors attracted by its accessibility, relative affordable price and potential for significant returns.

5. Tax Advantages

Whisky investments can be a tax-efficient way to invest. This means that investors can benefit from lower tax rates, which can result in higher returns.

Also, being a local auction house, there is no import duties payable vs participating in whisky auctions globally.

6. Portfolio Diversification

Whisky investments can add diversification to an investment portfolio and reduce risk.

By holding a mix of different asset classes, investors can spread their risk and give their portfolio a greater chance of success.

7. Enjoyment & Passion

For whisky enthusiasts, investing is more than just financial gain, it’s about passion and enjoyment.

Investors can take pride in owning a piece of whisky history and potentially enjoy the product personally or share it with family and friends as a unique asset.

8. Easy Exit Strategy

Especially now, with an easily-accessible online auction platform like Pinaroch available in South Africa, investors can easily profit from their investments by selling their bottles on auction to other investors and/or collectors.

In closing, whisky investments are becoming increasingly popular with investors, and for good reason. They offer low risk, high returns, tax advantages, portfolio diversification, and social status. For those looking to diversify their portfolio and potentially earn higher returns, whisky investments may be the perfect choice.