An Expensive Hobby vs a Smart Investment?

An Expensive Hobby vs a Smart Investment?

Why would you buy a cask of 2019 newly-made spirit from a new distillery when for a third of the price you could have a cask of whisky from a reputable distillery?(it must be, legally, over three years old)

When looking to invest in a cask, one of the most popular options is to purchase a barrel of new-make whisky from a new distillery. It’s a great experience and highly romantic, often including a trip to the warehouse, a round of golf and storage included for 10 years.

However, there is a downside to all the pomp and circumstance. The prices you are charged (often over £4000) reflects the value of a fully mature 10-year-old whisky, not new-make spirit. In most cases, as a ‘custodian’, you cannot sell your cask in-bond for profit and are restricted to bottling your cask. Therefore, it’s not an investment, it’s an expensive hobby. Not all new distilleries are successful either. You have no way of knowing if a business that’s only just started will still be going, or have any sort of reputation, in 10 years’ time.

casks

For the serious investor…

For the serious investor looking to buy a cask at a young age for a medium to long-term investment, there’s another, better, option. We sell casks of single malt whisky from established distilleries such as GlenAllachie, the Speyside Distillery, Glen Moray, Glen Ord, Blair Athol, Glen Elgin and Teaninich. There’s already a buzzing community of independent bottlers and collectors for these whiskies.

You can own one for as little at £1,500. Held in bond, you are free to trade these casks for profit, draw samples, or bottle yourself with your own personalised label.

These casks are not new-make. They’re already over three years old and legally whisky. That’s three years less that you have to wait to realise your investment.

Invest into cask whisky – video – We asked a few people about their own experience with investing into casks of whisky and here’s what they have to say about it.

Get in touch to request our latest stock list and let’s talk whisky!

NEW ARRIVAL – JURA barrel 2009

NEW ARRIVAL – JURA barrel 2009

Two of our latest arrivals are 2009 Jura casks – AYS 14/11/2009. This is a very rare opportunity as Jura casks are unique and difficult to come by. This cask is not quite ready to be bottled just yet and we’d recommend it as a 3-4 year investment. Or if you’re patient – a 6 year investment. Relatively short ferments mean that this is a whisky that needs time (or active casks) to open fully.

Jura distillery has been licensed since 1810 and was re-established much later as a classic 1960s distillery. – Large rooms, a clear flow from a semi-lauter tun, stainless steel washbacks, and a capacious stillhouse with 7.7m tall stills with capacity in excess of 20,000 litres.

It began being sold as single malt in 1974, and the range has grown steadily since. The start of peating saw some smoky-whisky in the Superstition brand launched in 2002, while a 100% smoked Prophecy was released in 2009. A typical characteristic of Jura whisky is in oily and salty taste.

Fun Fact! – George Orwell lived on Jura and finished his book 1984 on the island.

Get in touch with us for prices and to view our full stock list.

Have you seen Simon’s latest interview in Gentleman’s Journal? Read all about why you should buy your whisky by the cask! 

CASK OF THE MONTH – BRUICHLADDICH, ORGANIC BARLEY

CASK OF THE MONTH – BRUICHLADDICH, ORGANIC BARLEY

CASK OF THE MONTH – BRUICHLADDICH, 2012

Does using organic barley affect the flavour of a whisky?

We have the answer – an entire cask of Bruichladdich, distilled in 2012 kind of an answer!

Everybody wants organic. Bruichladdich’s ‘Barley’ series has proved enormously popular and now’s the chance for the hippest whisky lover to own (or bottle!) a whole single cask of organic Bruichladdich for the first time in years.

It’s not the oldest whisky, but organic certification, a first fill bourbon barrel and superb spirit has resulted in an outstanding whisky.

Drink responsibly! – Buying this cask will scientifically reduce your carbon footprint. 🙂

 

Read all about first fill and refill casks HERE.

Should you judge a whisky by its colour?

Should you judge a whisky by its colour?

‘Don’t judge a book by its cover’ is a phrase we’re all familiar with yet at times guilty of ignoring.

We buy with our eyes.  When comparing a dark-coloured whisky with a light-coloured whisky our brains trick us into telling us that the darker whisky is superior. This is due to a misconception that colour reflects richness of flavour. However, we must bear in mind that with taste this is not always the case. A well-made bearnaise sauce can be much fuller flavoured than an average dark gravy, in very much the same way a craft India Pale Ale will be tastier than a can of Guinness.

whisky colour

Many whisky companies fool us with a simple trick. They add E150A, or caramel colouring, which makes many of your favourite single malts unnaturally dark.

Other whiskies, especially single cask releases from fresh sherry casks, impart the colour of the liquid they’ve previously held. However, these casks only account for a minute proportion of all scotch whisky. While the flavours can often be rich with oodles of dried fruits, it’s worth bearing in mind that pale whiskies such as a classic Ardbeg 10-Year-Old are equally rich. – With a heavy peat aroma and fresh fruits such as apples and pears.

the Takeaway

It’s not my intention of dissuading anyone from purchasing a dark-coloured whisky, far from it. One of my favourite drams is the GlenAllachie 15-Year-Old which has had a secondary maturation in Oloroso and Pedro Ximenez casks. Next time you’re debating whether to go for a dark whisky or a light whisky, I would encourage you to try both and come to your own conclusion.

Want to keep reading? See our article on comparing younger and older whisky!

Cask Investment – Let’s talk numbers!

Cask Investment – Let’s talk numbers!

While we don’t make estimates and predictions on the future value of cask whisky, we’re happy to help advise you based on our own experience.

Whether you are a seasoned investor, a first-time buyer or looking to bottle straight away, we have options for you!

Let’s take Glenrothes for example…

Cask Price Increases

In October 2019, a 40-year-old Glenrothes bottling will be released for the first time. One bottle will set you back £2900. For less than the price of two of these bottles you can acquire an entire cask. One of our sherry butts from 2015 contains well over 700 bottles and costs as little as £5,601.38.

Our Glenrothes Sherry Butts from 2015 are available for £5,601.38, casks from 2012 for £7,823.31, and from 2011 for £8,281.68. This gives a 10.27% annual percent return on a four-year-old cask over four years. With a difference in age of only three months between our 2012 and 2011 casks (distilled in February and November respectively), the increase in value is 5.5%.

Earlier this year, a 1st fill 2006 Glenrothes Sherry Butt sold at auction for £21,000, highlighting the financial potential of mature casks from this distillery as well as its high desirability: read more here!

With in-bond sales exempt from capital gains tax, the potential returns are clearly attractive.

 

Bottle price increases

Another way of understanding the potential value of our Glenrothes casks is by looking at bottle prices. Don’t confuse distillery expressions bottled at 40% with single cask, cask strength editions; the latter will always fetch higher prices. Please note that the bottle cost in-cask does not include duty or VAT, which is included in the bottle price. As the whisky gets older and the bottle price increases, the price of duty per bottle (approx. £10 per 70cl bottle) stays the same. In fact, duty on a very old bottle with a naturally lower strength will be less than a younger bottle at a higher strength.

A Glenrothes 2015 has an in-cask bottle price of approximately £7.36. When buying a 2012 or 2011 cask, the price-per-bottle in cask is around £10.65 and £11.28 respectively. A single-cask bottling of 8-year-old Glenrothes has an average retail price of £60. For a 2011 sherry butt, the spirit inside has a potential retail value of over £44,000 based on approximately 734 bottles at cask strength. When filled, these casks contain 779 bottles worth of spirit; this amount reduces with age due to the natural evaporation of spirit from the cask known as the ‘angel’s share’.

glenrothes bottle

Let’s fast forward to a 30-year-old Glenrothes. A bottle of this rare liquid would set you back at least £440. Du

e to the angel’s share, we’d expect around 490 bottles to be drawn from the cask, with an on-the-shelf value in excess of £200,000.
The best way to approach buying casks, as with any investment, is to create a balanced portfolio of different ages, different hold times, and different distilleries. We would highly recommend adding any of our Glenrothes sherry butts to an existing portfolio, or as a first foray into casks as an alternative asset!

 

Understand that these numbers are based on our prices and every cask is different and unique in its own way.
With our expertise and experience, we are more than happy to recommend the perfect cask fitting your requirements, but we still advise everybody to do their own research.

New Arrivals – Bruichladdich casks

New Arrivals – Bruichladdich casks

We’ve acquired three of the finest Bruichladdich casks we’ve ever come across, with two still available – a 2004 Port Charlotte matured in a 1st fill Sherry Hogshead, and a 2003 Bruichladdich matured in a 1st fill Port Hogshead. The spirit has aged in both casks since day one, resulting in a flavour of epic proportions and natural colours to truly show off.

Whilst you could bottle these casks now, the wood is by no means overpowering, and these healthy casks could easily be held for over five years or more as an alternative asset.

Available

Bruichladdich 2003 Port Hogshead (1st Fill)
Distilled 14/11/2003
106.8 RLA @ 60.0%
Approx. 254 bottles

Port Charlotte 2004 Sherry Hogshead (1st Fill)
Distilled 23/07/2004
100.2 RLA @ 54.5%

Tasting notes for the Port Hogshead:

An incredibly rich nose. Lemon and lavender oils combine with Turkish delight, blackcurrant and vanilla. The flavours picked up on the nose continue in increasing intensity onto the palate, with oodles of candied fruits supported by a very full palate that’s oily and mouthcoating.

Get in contact now by emailing James at james@casktrade.com to secure this cask today.

NEW ARRIVAL – MILLTONDUFF 2007, hogshead

NEW ARRIVAL – MILLTONDUFF 2007, hogshead

MILLTONDUFF

HOGSHEAD

DISTILLED 11/06/2007

RLA 128.02, 464% ABV, est. 182 bottles

“Classic Speysider, and wonderfully soft, with plenty of white chocolate, tangerine peel, and mixed spices. So soft you barely notice it’s at 64%. A drop of water brings out warmth and toffee sweetness. Delightful.” – James

Get in touch, if interest, for more information and let’s talk whisky!

Whisky vs Wine

Whisky vs Wine

Whisky as an appreciating, alternative asset is a relatively recent phenomenon. With the market for such investments growing in parallel with the booming industry.  In 2017 alone, exports of Scotch rose 9% to a record 4.36 billion pounds. In the first half of 2018, the value of exports was over 10% greater than in 2017.

Scotch is the most attractive and reliable alternative asset class in the world. Due to the ever-increasing popularity and global demand, as well as the extremely low risk. When compared to wine or gold.

On the other hand, over 99% of wine consumed and purchased in the United Kingdom is imported. And despite a steady growth in the prices of fine wine, the whisky industry is growing much faster.

Accessibility

Allocations of investment-grade wine are few and far between. And often you have to purchase it as a bundle along with an estate’s 2nd and 3rd wines in order to secure a package. On the other hand, Cask Trade whisky is now a highly accessible alternative asset class. In which investment-grade casks can be obtained by newcomers to the market. And without any obligation to purchase additional non-assets.

Furthermore, asset-worthy wines are often very expensive, with many Bordeaux’s and Burgundy’s costing more than £10,000 per case. For the same amount of money, you’d be able to purchase a fully mature cask of scotch whisky from a highly reputable distillery. And that could yield upwards of 500 bottles. Entry-level casks can cost as little as £1500.

Investors in fine wine are mainly limited to wine enthusiasts who often own cellarfulls of bottles. While whisky is an asset class open to anyone.

Reliability

Non-deterioration of the asset is a unique security offered by whisky. Unlike wine, whisky can be saved from the ravages of time. A cask may have a lifespan of in excess of 50 years. Which is quite a time frame if buying malt under 8 or 10 years old. Even then, the whisky is only at the beginning of its true destiny; the bottle.

Unlike wine, whisky ceases to age in the bottle. Scotch that was distilled in the 19th century is still being opened and consumed to rapturous applause today. Furthermore, the risk of corking or poor storage is eliminated. Storage is provided in HMRC approved bonded warehouses. These are strictly governed and should offer complete peace of mind. These warehouses offer good rates for storage and insurance of casks. They are the same warehouses used by industry leading distillers. And ensuring the perfect, stable environment for maturation.

Is older whisky “better” than young whisky?

Is older whisky “better” than young whisky?

 

Many people believe, and often rightly, that older whisky is better than younger whisky.

Indeed, the longer spirit matures in the cask, it becomes softer, smoother and more complex.

Old Whisky

Drawn in and out of the oak through a thin layer of char, the whisky is flavoured by a host of organic compounds within the wood. And impurities are mellowed and filtered out.

There are also specific flavours commonly associated with old casks that simply cannot be found in a younger whisky. These can take the form of leathery, dusty, or ‘old book’ notes. With peated malts, the phenol compounds that give the whisky its distinctive flavour are broken down. A 30 year old Caol Ila will taste completely different to a 5 year old.

As mentioned in our previous article, ‘1st fill vs refill’, first fill casks mature more quickly and impart more flavour from the oak. On the other hand, refill casks will mature more slowly, allowing for more distillery character.

Young Whisky

Despite the rarity, complexity, and smoothness of older whiskies, there are also many compelling reasons to bottle whiskies at younger ages. An extremely active cask can result in a whisky being fully mature after only eight years of maturation. Any longer and the intensity of the flavour may either become too strong. Or else disappear entirely.

If the desired character of a whisky is to be a ‘peat monster’ in the classic Islay style, then a youthful whisky is infinitely preferable. The peat will be much more prominent. Furthermore, the alcohol percentage will be higher, resulting in more power. This is essential with some casks. Often the alcohol is an integral part of the flavour where the sweetness of the spirit and sweetness from the oak are intrinsically connected. With a loss of alcoholic strength, the entire flavour structure of a whisky can often fall apart.

On the other hand, the alcoholic strength can mask more subtle flavours. And the whisky can come across as ‘spirity’ and harsh. The organic flavour molecules are often bound to the alcohol. All that is needed is a couple of drops of water to help break down the chemical bonds. As well as release the full taste potential of a whisky. This trick can also do wonders for the texture and mouthfeel as well.

More youthful flavours include a clear and spirity sweetness, fresh fruits, coconut and banana, and notes of malt from the barley. Many distilleries these days have been experimenting with local and organic barley. Often from one farm, and this can have a distinctive effect on the whisky. These flavours will be much more distinctive at a younger age, and with too long, a maturation will become lost.

Afterthought

Think of flavour in whisky as being something akin to a building. All great whiskies have structure. A combination of flavours and textures working together to create a truly pleasurable sensation that is more than just taste. An old, fine and rare whisky such as a 38-year-old Port Ellen could be likened to Westminster Abbey. However, other old buildings, whilst historically valuable, can be in appalling condition with the structure entirely disintegrated.

We could compare cheap blends and young grain to a 1970’s council estate in Birmingham. But there is no reason that an 8-year-old Bruichladdich Organic Barley can’t be as wonderful and inspiring as the Sydney Opera House.

So, is older whisky “better” than young whisky? There is no wrong or right answer and it completely depends on your flavour preferences.

 

1st fill vs Refill cask

1st fill vs Refill cask

There is a common belief that 1st fill casks are superior to refill casks. With words such as ‘fresh’ and ‘active’ often associated with these particular barrels, hogsheads and butts.

The majority of casks used in the maturation of scotch are ex-bourbon. A US law states that bourbon can only be matured in virgin oak casks. And due to this law, these barrels and hogsheads will have been filled only once with bourbon whisky for an average of 2-3 years.

Where does the flavour come from?

The first time a bourbon cask is filled with scotch whisky, the wood is still fresh and active. With the sweet flavours of bourbon helping to season the wood. The more active the wood, the quicker the maturation and the more flavour extracted from the cask. Oak contains natural sugars that give the rich flavours of caramel and toffee, and vanillin gives classic vanilla notes. Lactones result in sweet coconut notes. And spicy-tasting compounds such as eugenol, iseugenol and cinnamaldehyde (from the charring process)  give us those familiar oak-spice, nutmeg and cinnamon flavours.

Virgin Oak

Virgin oak casks are perfect for the relatively quick maturation of bourbon whisky. But these would give far too much oak-influence to scotch which often matures for a considerably longer time. The previous liquid takes the ‘edge’ off the oak. Which ensures that the rougher, harsher elements of the cask are tempered (the really ‘woody’ and ‘varnishy’ flavours often associated with bourbon).

1st fill bourbon casks

1st fill bourbon casks are perfect for the maturation of Scotch whisky up to a certain age (around 15-18 years). However, a fresh and active cask will mature quicker. Breathe more and subsequently result in a greater angel’s share with greater loss of liquid and a faster reduction in ABV. Furthermore, whisky left for too long in a 1st fill cask runs the risk of becoming too woody. In which case, the softer and more subtle flavours and all of the distillery character is lost.

Refill bourbon casks

The wood of refill bourbon casks are less active than 1st fill; a portion of the flavour and colour from the oak will already have been extracted. However, a refill cask still contains plenty of the natural chemical compounds present in the oak. And we must not forget that the previous whisky will have also helped to season and flavour the oak. It will take longer for the new spirit to extract the flavours, and the whisky will mature more slowly. The cask will breathe less, but this will also result in a lower angel’s share. And make a refill cask much more suitable for long maturations from 18 to over 40 years old. The oak flavours will be more subtle, and the distillery character will play a greater part in the overall flavour.

Refill flavours

Smokey flavours, caused by phenolic compounds from the peated barley, will be more distinctive and take longer to mellow. As a cask breathes, spirit is drawn in and out of the oak, with the layer of charcoal from the charring process acting as a natural filter to fatty acids and phenols. These fatty acids are often the result of impure compounds from distillation through shorter, squatter stills and less copper contact in the condensers. This is what makes some whiskies such as Mortlach and Springbank so distinctively rich, fruity and meaty.

The compound B-damascenone gives floral notes, with diacetyl giving a buttery and creamy taste. A refill cask will naturally showcase these flavours better than a 1st fill cask. Other flavour compounds from the distillation process are esters such as ethyl hexanoate, which gives those fresh apple flavours. Another ester, isoamyl acetate, gives classic banana and pear-drop notes. These flavours are still present in 1st fill casks, but are often so subtle that the big toffee, caramel and vanilla flavours overpower them.

If you were to line up several 15 year old first-fill cask samples, you’d find a lot of similar flavours. The whisky would be rich, golden and sweet, but you might find it difficult to guess which distillery they are from. Were you to do the same with refill cask samples, the distillery character would be much more obvious.

A 1st fill cask might give 80% of its flavour from the wood and 20% from the distillation process. On the other hand, the refill cask will give closer to 60% of its flavour from the oak and 40% from the distillery.

Sherry butts

The same rings true with sherry butts. It must be noted that the large size of the butt results in a smaller surface area to volume ratio. They naturally mature slower and have a correspondingly lower angel’s share than the smaller barrels and hogsheads.

Spanish sherry butts are traditionally made of European Oak, which is less porous than American oak. There is less sugar and vanillin, but higher concentrations of spicy compounds. The previous fill of rich and nutty amontillado and oloroso sherry soaks into, and flavours the oak which often leaves several litres of liquid in the bottom of a butt (to ‘keep it fresh’) when it’s filled with whisky. 1st fill sherry butts result in an extremely rich, nutty and often dark-coloured whisky with a lot of flavour imparted from the sherry. Due to the colour, 1st fill sherry butts are among the most desirable casks available and fetch the highest prices. They’re also much harder to source, and an empty butt can cost in the region of £1000.

A refill sherry cask will mature more slowly, and the sherry influence and the colour will be less intense. However, this is a serious advantage if the cask is intended for long ageing, and the distillery character and more subtle notes from the sherry and European oak will come to the fore.

In conclusion

The difference between 1st fill and refill is one between youth and maturity, vigour and complexity, sweet and savoury, oak and copper. There is no right or wrong, and most people enjoy both! The only way to decide your preference is to try as many different examples of single-cask bottlings (blind if possible!) and make up your own mind!