Alternative investment trends and Investing in Whisky

Hermès Himalaya Niloticus Crocodile Retourné Kelly 25
  1. Water and distillation: There are about 130 operating distilleries in Scotland. There are 5 main distillery regions in Scotland, which are Highland, Lowland, Islay, Speyside and Campbeltown. Each region has its own water and air quality, that gives their final spirit its own unique flavor and properties. For example whiskies from Speyside have sweet, caramel and fruity flavor, whereas Islay whiskies are more peaty and smoky.
  2. The cask: The most important factor of the flavor and quality comes from the cask it is matured in. Whisky casks are made of an oak and whisky is never matured in a brand new cask, but in a cask previously used for bourbon whisky (bourbon cask), or wine (sherry cask). The inside of the cask is torched by actual fire, which gives the initially transparent spirit its unique amber color and special taste that we know well.
  3. Maturation: Whisky value is positively correlated with the amount of time it has spent in the cask. Scotch whisky is legally a scotch whisky after 3 years of maturation. There are several significant years of age in a whisky such as 10, 12, 15, and 21. During these years, whiskies are the most valuable as most whisky is removed from the cask to be bottled to sell or consume beforehand. Also, there is a statistic that only 8% of the total cask whisky actually matures past that 15 year threshold. So by a simple law of supply and demand, whisky aged more than 15 years is most valuable on the market. One thing I have to also mention is that whisky is aged only in the cask, and it does not mature further in a bottle. That is why cask whisky value increases not just by market forces, but also by the passage of time itself.
  4. Bottling: Once the whisky has matured, there is one more critical stage where value is added, which is bottling. First of all, the ABV (Alcohol by volume) is very important. Whisky has about 63% ABV before it goes into the cask, and during the maturation process, 2% of it just evaporates into thin air every year. So, matured whisky coming out of the cask has more than 50% ABV. Now you can dilute it by adding water until it has 46% ABV before bottling, or you can bottle it by cask strength. I think it is not necessary to mention which bottle has more value.
Yamazaki whisky
Macallan

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