The majority of people buying whisky do so because they enjoy the taste. They want to sample different flavors, varieties, or to develop a palate for a good dram.

Increasingly, though, there are those that buy whisky, not for the experience of drinking it, but because they think it can make them rich.

When it comes to buying alcohol as an investment, the first thing you’ll probably think of is fine wine. But, the investment market for whisky is booming to the point that investing in the hard stuff might bring you a better return.

As the Spectator notes, a vertical (a series of bottlings from successive years) of 18-year old vintage Macallan would have cost you £19,000 ($25,000) back in 2015. By the end of 2016, they were worth £46,000 ($61,000). That’s a 142% increase and makes the spirit a better investment bet than first-growth Bordeaux.

When you read statistics like that, investing in whisky suddenly seems like an attractive option. But, it’s not as simple as buying an old bottling and watching the money roll in.

If you want to see a return on a collectable whisky, there are a few rules to follow. That’s what this article is here for. Today, we’re talking about the fundamentals of investing in whisky; the do’s, the don’ts and the things to look out for when you’re buying.

Let’s dive in.

Why is whisky investment booming?

Today, the market for collectable whiskies is largely being driven by China. It used to be that the Chinese were buying vintage Macallan bottlings as “gifts to facilitate business” (or, what you and I would call “bribes”), but a government crackdown put that practice to bed. These days though, the boom in whisky sales in China is driven by a very different reason. As Martin Green, head of whisky at auction house Bonhams notes:

“Interest in whisky has been growing steadily for many years. One reason is the increasing wealth in the Far East where whisky is seen as a premium product and an indication of taste and sophistication.”

The rise of young High Net Worth Individuals (HNWI), a group of people with $30 million or more in liquid financial assets who are below the age of 30 are also fueling demand for rare whiskies. According to the Jing Daily, interest in whiskey among this population has grown from 15% to 22% in the past three years. According to the Hurun Research Institute’s China HNWI Whiskey Consumption Behavior Report 2017, whiskey is the third most favored alcoholic beverage among Chinese people.

But it isn’t just the Chinese who are consuming whiskies; according to Vijay Sarathi, an analyst at Technavio, who specializes in alcoholic beverages research:

“The demand for premium whiskey is increasing around the world, especially in major markets such as the UK and US. Super-premium whiskies, which are priced above USD 30, recorded close to USD 330 million worth of revenue in 2014, growing by almost 20%. This trend indicates, growth of the premium whiskey segment will significantly increase revenues for the overall market through 2020.” 

What to look for in an investment-grade whisky

If you’re buying whisky as an investment, there three things to consider when picking out a bottle:

Rarity

This one seems entirely obvious, but the rarer a whisky it is, the more collectable it will likely be. Limited runs that are in short supply or limited editions from established makers tend to be popular. Then there are bottles from so-called “silent distilleries” (distilleries that have closed down). Port Ellen in Islay, for example, shut down in 1983. Diageo, the drink conglomerate that owned it, has trickled remaining Port Ellen product on to the market every year for the past 17 years. Their 2016 offering was $3,400 a bottle.

Photo from The Whisky Exchange

Collectability

When buying a rare bottle of whisky, you have to weigh that rarity up against the recognition of the brand. As Scotsman Food and Drink notes,

“favoring an official bottle brings better value to the resale than an independent bottle, even when they have identical properties – same brand, same year of distillation.”

It’s something that Whisky Exchange owner Sukhinder Singh echoes:

“Much of the demand is driven by how good the whisky is; it’s not about packaging or rarity.”

Which is to say, just because a whisky is a collector-aimed, limited edition, doesn’t mean it’ll keep its value. There’s a reason 1980s bottles of 12-year-old Talisker only sell for just over $1000.

If you read our Scotch 101 series, you’re probably familiar with names like Macallan, Ardbeg, Bowmore, Highland Park, The Balvenie or Glenmorangie. And guess what? It’s bottling from those established brands that tend to sell consistently at auction.

Collectible Range

Remember that vertical of 18-year-old Macallan we mentioned at the beginning? Part of the reason it sold so well is that collectible ranges of whiskies are big business with whisky investors. Distilleries deliberately release series of special editions that, across the years, form a collection, and owning a full run of one of those series increases the value of the bottles exponentially.

Where do you buy whisky for investment?

If you’re looking to buy an investment grade whisky, you’ve got three options. The first is going to a whisky auction. This is where the majority of investment grade whisky ends up. But, buying at auction presents some challenges. Auctioneers may charge up to 25 per cent of the value of whiskies in order to sell them, while there are also transportation and storage costs to factor in.

Buying direct is another route, though one also has to factor in that returns can vary greatly due to the high transaction costs involved in buying and selling.

Finally, there’s the option of investing online, which has gained some traction in recent times. Using this approach, investors buy and sell whisky at wholesale prices for as little as $3 a liter using platforms like WhiskyInvestDirect.

Things to watch out for

As when investing in any collectable, the aspiring whisky investor needs to look out for forgeries. There are people out there trying to sell forged whisky bottles. Some are fairly obvious to spot – they might claim to be from a year when the distiller didn’t make whisky, for example – but others are tricky. Always do plenty of research when buying a bottle – Catawiki and Rare Whisky 101 are useful resources – and, if you get an offer that seems to good to be true, it probably is.

And of course, it goes without saying that buying an opened bottle of collectable whisky is a definite no-no. The instant that seal is broken, the value of that drink plummets and an opened whisky is essentially a non-investment. (If you want to know why, check out our guide to storing whisky).

Financial Times article: How to Spot a Fake Whisky.
Reddit: How to Spot a Fake Hibiki

Photo by Louis Smit on Unsplash

Final thoughts 

Investing in whisky might seem appealing, given the returns that you can potentially make, but it’s a challenging business and there are lots of variables that will determine your success. As Patrick Connolly (speaking to the Financial Times), adviser at Chase de Vere, puts it:

“Remember that whisky doesn’t produce any earnings or income and so price fluctuations are based solely on supply and demand. This means there can be some big upward or downward price movements if there are changes in the economic environment or as it comes in or out of favor.”

If investing is too risky for your palate, I would recommend becoming a collector. If all goes wrong and you can’t sell your whisky, at least you’ve got a spectacular drink to show and an excuse to find some good friends over for a great time!

You know your single malt from your single cask; you know the regions of Scotland like the back of your hand and you’re a master at nosing and tasting your particular whisky.

But what do you do with the bottle when you’re done drinking from it?

Storing Scotch isn’t as simple as shoving it in a wine rack or leaving it on the windowsill. There are certain rules you need to follow if you want to get the most out of your beverage in the long term.

So, let’s dive in. In this final edition of Scotch 101, we’re talking about the correct method of Scotch storage; where your bottles should live, how to fight off the scourge of oxidization and what do you once your precious tipple has been opened.

Where should you keep your scotch?

The Modern Day Man’s Whisky and Wine Cabinet

Traditionally, Scotch whisky is stored in cellars for two reasons:

1) Cellars tend to maintain a room temperature of 15-18°c – the optimal temperature for your Scotch.

2) Cellars are dark, with only a minimum amount of sunlight and heat.

If you have a cellar, it’s the obvious place to store your whiskies. But, not to worry if you don’t. Plenty of Scotch enthusiasts have gotten on just fine without one. The trick is making sure you keep your whisky in conditions as close to that cellar as possible. That means, protecting it from the sun’s rays and fluctuations in temperature.

So what’s the issue with sunlight anyway? Well, it breaks down the alcohol for one, as well as causing chemical reactions to the alcohol’s volatile bonds that will alter the flavor.

Leaving your Scotch on a shelf near to a window is therefore a no-no. If you can, store it in a cabinet, or at least make sure it is covered it with a dense, opaque material such as wood. So long as the temperature of the room, your Scotch is stored in, is between 15 -20°c (59-68°f) – regular room temperature – you shouldn’t have a problem.

Keep your bottles vertical:

Photo by Alex Holyoake

Wine connoisseurs recommend storing wine bottles horizontally. But with whisky, it’s a different story.

Whisky bottles should always be stored vertically, and the reason is to do with their high alcohol content.

As we’ve already established, any given Scotch will have a minimum alcohol content of 40% (it can’t legally be called Scotch if it doesn’t).

Because of its high alcohol content, whisky has a tendency to react with cork. When whisky comes into contact with cork, it causes it to decay and gradually disintegrate. This results in oxygen entering the bottle, oxidizing its content and changing the characteristics of your whisky. Oh, and it makes your drink taste awful to boot. Keeping your bottle vertical keeps the cork in a good state and preserves your drink.

And on the subject of cork, you want to keep the cork of your bottle moist to avoid it chipping, it’s worth turning your bottle upside down once a month to keep the cork wet.

Storing an open bottle of whisky:

The Modern Day Man’s Yamazaki Sherry Cask 2013. Finished with the help of friends.

Everything we’ve talked about so far applies to storing a sealed bottle of Scotch. But, what happens when you crack your bottle open? How long does it keep and how should you take care of it?

Well, crucial to how long your whisky will last is how much liquid is left in the bottle.

As the folks over at Scotch Noob note:

“An opened bottle of whisky (stored away from light) with more than two-thirds of its contents remaining can be expected to remain unchanged for about one year.”

After that period, oxidation is going to start occurring. And, as we know, when oxygen binds with your whisky, it starts to affect the flavor.

The more air in the bottle (i.e.: the more Scotch is drunk), the quicker oxidation will occur. Say you’ve finished three quarters of your scotch bottle; you can expect to notice a degradation in quality in less than a month, eventually resulting a flat and tasteless tipple with few of the characteristics it once had.

So what do you do if you’re down to that last third of a bottle?

Well, there are two options. The first, and by far the most sociable, is to invite friends around for a whisky tasting evening (my favorite method). It’s a sure fire way to use up that whisky before oxidization takes its toll. Besides, sharing a drink with good company is one of life’s great pleasures.

But if you’re what the Scots would call a Jimmy-nae-mates and don’t want to share your Scotch around, you can always funnel your chosen Scotch into smaller glass bottles (with good seals) to slow down that oxidization process. It’s less fun, sure. But if you’re saving that remaining Scotch for a particular occasion, then this is the sensible option.

Can You “Age” Your Whisky?

Addressing one final question that often gets asked when it comes to whisky storage, whisky does not “age” like fine wine does.  Whisky matures in the cask. Once it’s been distilled, you can’t mature it in the bottle. As Scotch Whisky Association notes, if you keep a 12 year bottle for 100 years it will remain a 12 year old bottle. Keeping that bottle closed for longer won’t improve the flavor, so don’t worry about cracking open your single malt too soon.

So that’s it for Scotch 101. Assuming you’ve followed all the advice in this guide, it’s fair to say that you now know a thing or two about the history and practices of Scotch Whisky, and the many amazing varieties of Scotch that are available. Now, all that’s left for you to do is open your bottle, pour yourself a dram and savor its flavors.

We’ve covered the world of Scotch, but we’re by no means done with the wonderful world of whisky. In the next Whisky 101 series, we’re going global, sampling the spirits of Ireland, Canada, Japan, India and everywhere in between.

So until next time, do dheagh shlàinte!

Read the Previews Scotch 101 Series:
1) Understanding Blends, Single Malts and Casks
2) Understanding Scotch Whisky Regions (Part One)
3) Understanding Scotch Whisky Regions (Part Two)
4) How to Drink Your Single Malt

By now, you’ve purchased a good single malt bottle, and you’re probably itching to try it. But now is not the time to be over-eager! If you want to get the most out of your first Scotch, there’s a right way to drink it.

Drinking Scotch is an art in itself, and there are methods that seasoned Scotch drinkers have used for years to really appreciate the unique flavor characteristics of a given dram.

So let’s dive in and find out how you go about drinking your single malt. From temperature, glasses and drinking methods, to the debate around water, ice and mixers, we’re covering it all!

What Temperature is Scotch Served At?

While many alcoholic drinks are best served chilled, that’s certainly not the case for Scotch. If you want to get the most out of your single malt when it comes to flavor, make sure you’re serving it at room temperature and remember that refrigerating your given Scotch isn’t a good idea.

Why? As Nick Savage, master distiller at The Macallan notes, chilling Scotch causes the flavors to tighten up and “contract.” Room temperature, meanwhile, “allows for optimal taste” because the whisky’s aroma’s and flavors will “volatilize,” meaning you can better appreciate them.

Some even recommend wrapping your hand around the whisky glass before you drink it, allowing those flavors to volatilize even further.

So, in summary, refrigeration of your Scotch is a definite no-no. Room temperature is the way to go to get the most out of your tipple.

What Kind of Glass Do You Use?

A standard whisky tumbler might seem like the glass of choice for any self-respecting Scotch drinker. It’s what you see folks using to drink Scotch in movies and on TV all the time.

But, Scotch aficionados tend to disagree. In fact, the recommended receptacle for your dram is a tulip-shaped glass.

Photo by henry fournier

This is for two reasons:

• It allows the whisky to be swirled around without spilling (useful for releasing the flavors of the whisky)
• It concentrates the aromas at the neck of the glass

They’re not always the easiest things to find, but it’s well worth hunting out a tulip-shaped glass if you want to get the most out of your dram.

The Stages of Drinking Scotch Whisky

Photo by Filip Bunkens

Once your whisky is at room temperature and poured into an appropriate glass, there are a few steps to drinking your chosen dram that will help you appreciate it fully.

Checking the color:

Hold your glass up to the light and check the color of the whisky. Some people believe doing this helps you determine the age of your malt, but this is a misconception. Checking the color will give you an indication of how your drink was matured. Golden colored single malts typically come from sherry oak casks, paler whiskies from bourbon casks.

Checking the “legs”:

Checking the legs on your whisky involves holding your glass by the stem, tilting it and then rotating it briskly, so that the walls of the glass are coated with the Scotch. When the glass is held up straight, you’ll see the “legs” forming at the whisky runs down the sides of the glass.

Why do this? Checking the legs helps you determine the age of your whisky. The slower the legs, the more unguent the liquid and the older the whisky.

“Nosing”

Now that you’ve determined the age and origin of your whisky, it would be tempting to dive straight in with the tasting. But, there’s a very important step that comes before the drinking – and that’s the nosing.

Nosing the whisky simply means smelling it. The correct way to do this is to hold the glass away from you and then pass it under your nose, taking a deep breath through your nose as you do so.

On this first pass, you should make a mental note of what the smell reminds you of. Then, repeat the process a few times to see what other notes you detect.

This might seem like a strange step, but drinking Scotch really is a multi-sensory experience and nosing is essential to understanding the full flavor characteristics of your dram.

Tasting:

Finally, we get to the tasting. To do this, form your tongue into a small spoon shape, then take a sip from your glass. Don’t swallow the whisky straight away, instead let it rest on your tongue.

From here, your mind tries to identify the many complex aromas of your dram and what they remind you of. This process can sometimes be overwhelming, especially to a new whisky drinker. But, remember that they’re your taste buds, and that there aren’t right or wrong things to detect in your dram.

Crucial to tasting is that it helps you distinguish different Scotches from one another. Next time you taste that single malt, your mind should be able to identify it.

Water, Ice and Mixers:

There’s plenty of debate about whether you should add anything at all to your whisky. Some purists say that whisky should only ever be drank neat.

But, the general consensus is that, if you’re going to dilute your Scotch, it should be with water. Many believe that adding a touch of water can enhance the aroma of your whisky and bring out many of its hidden characteristics.

By water, we’re specifically referring to soft, still spring water, ideally from Scotland. Tap water is off the table because it contains high levels of chlorine that can spoil, instead of complimenting your tipple.

As a general rule, it’s recommended that you taste your whisky neat first, and then add a little spring water with your second sip. You don’t want to drown your drink; about 20% water is plenty. Combine the whisky and water by gently shaking the glass (giving it a “shoogle” in Scottish parlance).

Scotch on the rocks might be common in bars across the Scottish land (and everywhere else), but for whisky connoisseurs, adding ice is a big no-no for three reasons.

• Ice cubes are usually made from tap water, meaning high levels of chlorine.
• Ice cubes reduce the temperature of the drink, and chilling Scotch whisky freezes its flavors.
• It’s very difficult to regulate the amount of water in your drink when adding ice cubes, and they dilute the flavor as they melt.

Finally, mixers such as sodas, ginger ales, lemonades and colas are a pointless addition to Scotch. You spent top dollar on your bottle because you wanted to experience its unique flavor. Covering up that whisky’s true taste with a cheap mixer is not going to help you do that.

So that’s it for this week’s edition. By now, you’re well versed in buying and drinking Scotch. Next week, we’ll be talking about how to store your whisky so that you can get the most out of it for years to come.

In last week’s edition, we explored the first three Scotch whisky regions – The Highlands, Speyside and the Islands – and the huge variety of whiskies that those regions produce. This week, we’re heading down to the south of Scotland to explore the three remaining regions: Islay, The Lowlands and Campbeltown.

There’s a huge variety of whiskies in these regions, as well as some of the most famous distilleries in the world of Scotch. So, without further ado, let’s dive in with a whisky region known for its strong flavors: Islay.

Islay:

Number of Distilleries: 8

The Scottish island of Islay (pronounced ‘eye-luh’) – located to the West of the Scottish mainland – is the country’s smallest whisky producing region. But, despite its small size, whisky is synonymous with Islay. It’s widely believed that Islay is one of the first places whisky was distilled, and the production of uisge beatha (Gaelic for “Whisky”) by monks in the region dates back to the 14^th century. Testament to Islay’s whisky heritage, the majority of the island’s population are involved in its production, through agriculture, distribution or distillation.

Islay is home to eight distilleries, three of which – Ardbeg, Laphroaig and Lagavulin – are world famous. And, the characteristics of the island have a massive impact on Islay whiskies. The most strongly flavoured of all Scotches, Islays are big on strong, peaty notes. This distinctive flavour is informed by the island itself. Islay is heavily composed of peat – so much so that most of the island’s water is brown as a result – which accounts for the abundant smokiness.

Then there are the heavy winter gales, that blow sea salt spray far inland, resulting in briny notes atop the peaty, smokiness. Given this, it’s not surprising that many drinkers detect hints of seaweed, brine and even kippers in a given bottle.

While “massively peaty” is the term best employed to describe the majority of Islay drams, it’s not true for every tipple produced on the island. Bruichladdich and Bunnahabhain are notable for being much lighter on peat than the rest of their Islay brethren, offering a much milder drinking experience as a result.

With their intense, smoky flavors, Islays might not be to everyone’s taste, especially if you’re new to drinking Scotch. But, their distinctiveness makes them well worth persevering with, and they’re incredibly rewarding to a more experienced palette.

Lowlands:

Number of Distilleries: 4

In terms of the area it covers, The Lowlands is the second biggest whisky region in Scotland. At one time, it was one of Scotland’s most densely populated areas in terms of distilleries, with 215 distilleries recorded during the late 18^th century. Today however, only four exist in the region. Many suspect that the Lowlands’ decline was down to successive parliamentary acts that favored English gin production, which effectively curbed the biggest market for Lowland producers at the time.

Lying South of an imaginary line that runs from Greenock on the West coast of Scotland to Dundee in the East, and perching just above England, most of the malts produced in the Lowlands end up as blends.

The reason? Lowlands whiskies are by far the lightest and gentlest tipples produced in Scotland, tripled distilled and with no peatiness whatsoever. Lowland whiskies are typically characterized by notes of grass, honeysuckle, cream, toast and cinnamon.

Given their lighter, floral, “feminine” tones, Lowland malts are sometimes nicknamed the “Lowland Ladies.” For this reason, writers such as Charles Maclean have also championed them as a perfect aperitif, and you will find the likes of Auchentoshan, Bladnoch and Glenkinchie frequently recommended as excellent introductory malts for whisky novices.

If you’re looking for a light and easy first Scotch, you could do a lot worse than picking a bottle from the Lowlands region.

Photo by Asa Rodger

Campbeltown:

Number of Distilleries: 3

Lastly, we come to Campbeltown. Lying towards the end of the Mull of Kintyre peninsula on the West Coast of Scotland, there used to be over 30 distilleries in the Campbeltown region. These days, however, that number is reduced to just three: Glen Scotia, Glengyle and Springbank.

An area that Whisky historian Alfred Barnett referred to as “Whisky City” in 1885, the number of Campbeltown’s distilleries had actually started dwindling during the 1850s (there were just 21 when Barnard visited). The reason? Improved transportation links to rival distilleries in the North had a major impact on business in the region. The onset of the First World War, as well as American Prohibition in the 1920s, led to the further closure of distilleries in this once thriving whisky region.

Yet, in spite of its small number of distilleries, Campbeltown remains a revered whisky making location. Its tipples are full of flavor: robust and complex with just a hint of sea salt and a mild peatiness.

There’s plenty of variety across the three spirits as well. Springbank is the smokiest of the three. Glen Scotia is lighter and grassier. Kilkerran, produced by the Glengyle distillery, is sweet, fruity and spiced.

Don’t be fooled by the small number of distilleries. Campbeltown spirits offer a wide range of flavors; salt, smoke, fruit, vanilla, toffee and everything in between. In short, the tipples from all three of Campbeltown’s distilleries are definitely worth exploring.

So that’s it for this edition of Scotch 101. By now, you’re fully up to speed on the differences between blends, single-malt and single-cask whiskies, and well versed on the flavors that the different scotch regions have to offer.

But, we’re not done yet! While you’re now in a strong position to purchase your first bottle of scotch, you still need to know how to drink the thing. And that is a fine art in itself.

Make sure to tune in next time, when we’ll be talking about the importance of finding the right glass for your dram, the debate on whether adding ice or water to your whisky is a good idea, and how to drink your whisky to get the most out of its unique flavors.