POURING PROFITS (eBook)

Expert tips and strategies for investing in whisky

Samantha De Noia (Autor)

eBook Download: EPUB

2023 | 1. Auflage
368 Seiten
Books on Demand (Verlag)
978-84-1174-511-6 (ISBN)

Infos

As a passionate whisky specialist, I understand the struggle of making informed investment decisions without the proper knowledge and insight. That's why I wrote "Pouring Profits", a comprehensive guide to help you navigate the whisky investment market and learn about all the options available with ease and confidence. With this book, you'll gain access to independent and unbiased information about the whisky market and guidance on how to make wise investments. I'll provide you with a comprehensive view of the market, the tools, and the knowledge required to effectively triple your income through whisky investment, as well as manage costs and accurately calculate potential profits.

In this captivating book, Samantha De Noia, a self-proclaimed "whisky freak" with over 20 years of experience and an unstoppable wanderlust, takes readers on a journey through the world of Scotch whisky. From the rolling hills of Scotland to the bustling cities of the world, she shares her deep passion for whisky and countless investment tips to achieve success and increase your wealth. As the founder of 9 Smoking Barrels, a creative whisky agency, Sam is dedicated to spreading the love and legacy of this extraordinary spirit. Through this book, readers will discover the art and craft of whisky making, explore the rich history and culture behind the spirit, and learn how to genuinely appreciate the complexity of a good dram while making profits and having fun. Whether you're a seasoned whisky enthusiast or just starting to explore this fascinating world, this book is the perfect guide to spark your passion for whisky investment.

Textauszug

CHAPTER I

AGED TO PERFECTION: HISTORY OF THE WHISKY INVESTMENT MARKET

Once Upon a Whisky

The origins of whisky can be traced back to medieval Ireland and Scotland, where it was originally used for medicinal purposes. However, over time, whisky production and consumption grew, and it eventually became an important part of the social and cultural fabric of many countries.

The earliest known reference to whisky comes from 1494, in an entry in the Exchequer Rolls of Scotland, which recorded the purchase of barley to make aqua vitae, a Latin term meaning "water of life." This early whisky was made from barley and was distilled in a process similar to that used to make beer. Over time, the recipe for whisky evolved, and other grains such as wheat, corn, and rye were also used in its production.

During the 18th and 19th centuries, whisky production in Scotland and Ireland grew exponentially. In Scotland, the whisky industry was centred around the Lowlands, Speyside, and the Islands regions, each with their own distinct style of whisky. In Ireland, the industry was centred around the counties of Cork, Dublin, and Ulster. The whisky industry in both countries was initially small-scale, with production primarily for local consumption. However, as the demand for whisky grew, so did the industry. Distilleries began to open, and many of the existing ones expanded their production.

In the early 19th century, the whisky industry in both countries was hit by a number of challenges, including a period of excise tax, which made production more expensive, and the phylloxera epidemic, which destroyed vineyards and reduced the availability of wine and brandy, which were the traditional drinks of the upper classes. Whisky producers adapted, and the industry continued to grow.

In the late 19th and early 20th centuries, the whisky industry in Scotland and Ireland faced further challenges, including the introduction of prohibition in the United States and the imposition of high tariffs on imported whisky by other countries. Many distilleries closed, and those that remained open struggled to survive.

As well, the Scotch whisky industry was impacted by higher taxes and the First World War, which resulted in a decline in consumption and the closure of several distilleries. Additionally, the war diverted supplies of grain from distilling to other uses. In response, the industry introduced a compulsory minimum two-year maturation period for Scotch whisky before sale and formed the Whisky Association to defend against government interference.

Despite the popularity of blended whiskies, self or single malt whiskies were still appreciated by connoisseurs, particularly for their unique and distinct flavours. Many single whiskies, especially those intended for export, were aged for about five years and were enjoyed by the sporting fraternity who visited Scotland for fishing and shooting. Exhibitions showcasing self-whiskies from different malt distilleries in Scotland and elsewhere were held, and medals were awarded to the best ones.

In the second half of the 20th century, the whisky industry continued to grow and expand. New distilleries were established, and existing ones expanded their production. The popularity of whisky also continued to grow, and it became a global industry. Today, whisky is produced in many countries around the world, including Canada, Japan, India, and Australia.

In recent years, the whisky market has seen a resurgence of interest in single malt whiskies, which are made from 100% malted barley and produced by a single distillery. This has led to a renewed interest in the traditional methods of whisky production and the unique characteristics of different regions. Additionally, the growing interest in craft spirits has also led to an increase in the number of small-scale distilleries producing whisky.

Whisky as an investment

As we discovered, the whisky industry has a long and complex history that has shaped the way we view and consume this precious liquid today. In the late 19th century, whisky was a struggling industry that faced many financial challenges due to the long maturation process required to produce a quality product. Scottish distilleries had to find creative ways to generate income for daily operations, and one of the solutions was to sell barrels as investments rather than focusing on bottles.

The 1890s saw a surge in the popularity of whisky as an investment. Banks began lending money to speculators to acquire stocks of new and maturing whisky and distillery shares. This led to an overproduction of whisky, as distilleries expanded their capacity and laid down more stock than the demand could keep up with. The annual increase in stock warehoused in Scotland rose from just under nine million litres in 1891-2 to 61.4 million litres in 1897-98, and by 1898-9, net additions to stock amounted to 40 per cent or more of total output. The rise in production of pot stills was largely paralleled by the patent still producers, and grain whisky output rose from 42.7 million litres in 1886 to nearly 95.4 million litres in 1900.

As expected, this investment frenzy did not last forever. In 1900, the Pattison crash occurred, named after the infamous Pattison brothers who had built a vast whisky empire on credit. When they were unable to pay their debts, the whisky market crashed, leading to widespread bankruptcies and distillery closures. This event marked the end of the whisky investment boom, and the industry struggled to recover for several decades.

In the 1990s, the whisky industry faced a new set of challenges. Single malt whisky was still considered a niche beverage, and distilleries struggled to make a profit. Many closed down, and casks were purchased as investments but were not always profitable due to unfavourable market conditions.

However, in the early 2000s, the whisky industry began to shift gears. The emergence of the internet and the global market allowed distilleries to reach a wider audience and rebrand themselves for a new generation of consumers. Prices of bottles began to show growth, and the release of the fourth edition of Black Bowmore demonstrated the distilleries adjusting prices to reflect the brand's perceived value. One of the consequences of this shift was that many distilleries, including Scotland's premier whisky brand The Macallan, stopped selling barrels on the private market. Instead, they kept their valuable stocks, and the most precious barrels ended up in the hands of private collectors. This scarcity made them extremely rare and therefore much more valuable. Now, there is a finite amount of high-quality whisky barrels in warehouses across Scotland, and every time one is bottled, there are fewer left. This inherent rarity is built into the value of each barrel, making whisky one of the most tantalizing and exciting investment opportunities available.

The Digital Age of Whisky

In the 2010s, with the rise of online whisky auctions and reduced overheads, bottle prices saw more significant growth. E-Bay became a major market for rare whisky auctions, but when unauthorized sellers were banned from selling alcohol online in 2012, online auction sites emerged to fill the void, as did traditional auction houses. The internet did what it was supposed to do, and it destroyed the traditional auction industry and democratized access to the market. Online auctions allow investors from around the world to bid on rare and unique whiskies.

Auctions in the UK and the US became particularly attractive to Asian customers, as demand outstrips supply, and it created a vibrant ecosystem. In terms of brands, The Macallan emerged as a dominant player in the market, cementing its position with a historic catalogue of collectable series, a new visitor centre, and distillery. This ultimately led to the world record sale of a £1.5 million bottle in 2019. The timing of investments was important as demonstrated by the significant appreciation in value of some bottles over the years.

Weathering the Storm: Whisky and COVID-19

Few areas of modern life have not been affected by Covid-19, including whisky. Scottish distilleries were forced to close when the country went into crisis in March 2020, and some went on to donate their alcohol for use in hand sanitizer production, while others began producing it themselves. While many were able to reopen and resume whisky production in the second half of the year, the impact of the disruption means that the whisky produced in 2020 could be the most valuable batch in history due to the reduction in quantity. Also, on-premises sales, such as those at bars and restaurants, have dropped drastically, leading to a decrease in demand for lower-priced blended whiskies. However, the market for high-end single malts has remained relatively stable, and even experienced growth as consumers turned to online purchasing and home consumption. Meanwhile, global whisky exports, which are key to its success, were greatly affected in the first half of the year, with a 30% drop compared to the previous year. However, since exports grew by 4.4% in 2019 to a total value of £4.910 billion, the industry was in good health before the crisis and there is no reason to think that will change after it.

The Role of Inflation and Volatility in Whisky Investment

As the global economy begins to recover from the COVID-19 pandemic, investors are becoming increasingly concerned about inflation. Governments around the world have borrowed heavily to support their economies during the crisis,...

Produkt-Details

• Erscheint lt. Verlag: 18.4.2023
• Sprache: englisch
• Themenwelt: Sachbuch/Ratgeber ► Essen / Trinken
• ISBN-10: 84-1174-511-2 / 8411745112
• ISBN-13: 978-84-1174-511-6 / 9788411745116