The whisky market is growing significantly. In the scotch whisky export analysis report 2017 published by Scotch Whisky Association, Single Malt Scotch Whisky continues to grow, with an increase of 14% year-on-year to £1.17bn, reflecting a trend towards premium products in global markets.
Given the growing demand for a product that takes literally years to produce. It unlocks the potential for investment opportunities. What is an ‘investment’? A simple definition would be the purchase of goods that are not consumed today but are used in the future to create wealth.
An investor has the ‘intention’ not to consume his/her own assets. Whisky drinkers beware!
Sweden has just recently launched the world’s first publicly traded whisky investment fund promising a target of 10% return per year, with a 2.5% management fee. There are also many privately-owned whisky groups out there, collectively purchasing fine whiskies as an investment, in due time, selling the whisky, often back to the members who wish to collect, to turn a profit. I’ll let you decide where does the profit come from…
Whether you are buying shares or whiskies as an investment, it is subjected to similar principles. Firstly, you need to have capital, enough capital to diversify your risk. Secondly, you need to have access to information earlier than others and finally, you need time! Time to keep track of the market and perform research, as well as time for the market to evolve. Don’t underestimate the effort required, it’s a lot of work! One more thing, no one wins all the time, that’s just part of the game.
So, should you invest or not invest? This is up to you of course. Remember one of the biggest trade off of being an investor: You can not drink your own whisky collection. This alone should make you think twice…unless you are allergic to alcohol.
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Photo by Autumn Mott and Roberto Junior