Do You want to invest in rare Whisky?

Over millions of years the human species has developed from nomadising primates to Homo sapiens to today's Homo post atomiensis. ;-) Our evolution took several million years, and some important characteristics such as the hunting and gathering instincts secured our survival over the whole time.

In this article we focus on humans as hunters and gatherers. These two characteristics complement each other perfectly. Hunting and holding on to something so we don't lose everything we've worked so hard for again. This instinct presumably developed as a reaction to the seasons with their varying food supply. Care in good time for times of need... these characteristics have been handed down to us over generations. You can see it in little children when they align their beloved toys on the shelf.

Many things are collected in daily life. This collecting instinct is nothing negative. For instance, the collecting passion of the big world religions and their gathering of treasures of all kinds enabled us to understand our history much better.

In the private sector it used to be stamps and china. Later the zeitgeist switched to less expensive goods such as crown corks, beer mats and American licence plates. Today you can't find any object that is not collected. Sugar lump wrappings, matchbooks, pins and whisky bottles are among the least exotic collector's items.

Let's dig a bit deeper. What constitutes a collector's item? At the beginning of a collecting passion there’s a trigger. Your get enthralled by a special gift or you see a small collection of things you'd like to own yourself. In the case of matchbooks it's easy. Whenever you come across one you take it home. In the case of whisky it can quickly become very expensive.

Furthermore collecting stamps is 'out', and the small colourful pictures, mint or stamped, are just worth a fraction of the value imprinted. Why did people use to collect stamps but not anymore? We can only make assumptions. The stamped stamps were available for free. Foreign stamps roused our desire to see distant places, and one thing led to another. Nowadays we can actually travel to distant places, and less and less letters are written. It's a multimedia world. 

These single cask editions are really expensive. You can pay between 250 and 5,000 euros per bottle. But is the bottle worth that money? Will the price continue to increase? Or has a clever vendor boosted prices by creating an artificial shortage? Along the lines of: "Believe me, this bottle is the very last specimen. It is out of stock. As a collector of XYZ you must have it!"

Please bear in mind: Of each whisky at least some hundred bottles are bottled as you can see with the 'rare' Ardbegs and Springbanks in the pictures above. The bottles leave the bottling plants on pallets. Very few bottles are actually unique specimens. These statements often just force up prices. Please stay critical.

The passion to collect is insatiable, and after a short period of time each collector must ask themselves how they also can make money with their knowledge of the item they collect. Stamp collectors used to buy at least four stamps. Two were stamped and two were kept mint. One of each type was put into the collection and two were kept for swapping. A real whisky collector always buys three bottles. One to enjoy, a second one for the collection and a third one for later swapping, when the price has risen accordingly. It's an excellent way to expand a collection. By selling the redundant bottles additional money can be raised in order to fulfil wishes that exceed the collecting budget.

The whisky collecting passion often starts with the wish to own a bottle from each distillery. The path is easy: Buy whatever the budget allows. For about 5,000 euros you can get about 100 bottles from different distilleries and then you first have to save money for a bigger cabinet. At this point at the latest, whisky collectors start to think about their motivation and how to develop their collection. The focus switches slowly from amazing-looking bottles to rare whiskies. As time goes by they realise that the standard bottlings are always available. They grow tired of them and start to look for rarities.

If you follow these pieces of advice you have developed from a common-or-garden collector to a professional collector. You don't collect bottles for their looks anymore but think about the future appreciation value of a bottle before buying it.

It's a small step for you but a giant leap for your collection. In the following paragraphs we're going to strategically choose bottles that could later make thousands of euros at big auctions. In September 2002 a bottle of Black Bowmore was sold for 2,800 euros by a German retailer. The bottle was originally sold for 125 euros in 1995.

You will soon notice that many of the bottles you have amassed until now don't deserve a place in your cabinet anymore. You can't sell them. It's like with the stamps. Everybody has them and nobody wants them. Have a look at the pallets above with collector's bottles. Of these selected, 'rare' bottles there are thousands in Europe. You have to choose carefully to find the bargains among these. - We'll see later how to do that.

What can you do with the surplus bottles? Now the whisky collection can show its incredible advantage over the stamp collection. You enjoy the 'worthless' or let's say 'the bottles that won't rise in value' yourself. You didn't waste money and it's even fun!

You will never realise a good price with bottles sold in the millions. Yet the value of these bottles increased by 100% in recent years, since Macallan discontinued this series and now only offers their younger whiskies without an age statement. Allow me a word on the 1.0l bottles: They are not very popular among collectors because they are too tall for most cabinets. Only with really rare bottles it doesn't matter whether you have a 0.7l, 0.75l or a 1.0l bottle.

CAUTION! Due to the limited warehouse capacities of Macallan the recently launched 25-year-olds didn't have a vintage anymore. This is a considerable drawback for collectors. Still these bottles reached extreme prices of 750 euros among collectors in 2014. You couldn't do anything wrong.

However, collectors seek after another bottling. It's the old 12-year-old original bottling. Should a new original bottling be launched, no one will be interested in the Signatory bottling anymore. From a collector's point of view this bottle is meant to be consumed soon - it also tastes quite good.

However, it's seldom advisable to purchase first bottlings. You should rather wait and watch from a safe distance how a new malt develops. For example, the Glengyle distillery, which has been re-erected in the old buildings, is currently selling their first bottlings directly. 270 euros for a whisky that hasn't even been distilled yet! Only one party is making a profit here, and that's the distillery.

Launched in 1998 for 39 euros, the final bottles reached retail prices of 75 euros -  an increase by  almost 100% in 4 years. Due to the extreme scarcity also the 1.0l bottles are sought after. In 2014 the bottles reached prices of about 200 euros.

Three casks were bottled in 2000, and the initial price of 1,150 euros was wishful thinking. By far not all bottles have been sold yet. The prices have even come under pressure because the market didn't accept the bottles. Moreover, there's a tenacious rumour that the former owner of the distillery still has some casks and is soon going to launch a new original bottling. But that may also be a defensive rumour spread by the competitors of Signatory. They're angry because Signatory was allowed to bottle all three casks.

The stagnation of the price at 95 euros in 2002 highlights the situation. But nothing is more constant than change. In 2002 the distillery was mothballed due to the recession in the wake of the burst of the internet bubble. In 2011 it was dismantled for good. Today bottles distilled in 1968 regularly reach prices of 200 euros and more.

Only malt whiskies play in the Champions League. If you consider that ten thousands of bottles of the Blue Label are sold worldwide each year, you don't have a unique bottle even if they're individually numbered. Prices stagnating for over a decade confirm this.

 For ambitious would-be collectors my remarks surely were unpleasant. I want to say sorry for that. Extreme examples, strong words and exaggerations are means to exemplify basic correlations. My goal was to spare you negative future experiences as a collector.

Which are the distilleries that are actually sought after? Before we talk about distilleries, let's talk about the bottlers. I don't know any independent bottler beside Gordon & MacPhail that has ever scored high collector's prices. And I don't mean some hundred euros for an old bottle. I mean really high proceeds of more than 1,000 euros. Even G&M only scored such prices with bottlings they produced on behalf of the distilleries with official labels. As a collector you can easily dismiss their own bottling series such as MacPhail's or Glen Avon.

Collectors seek originals - not copies. No matter how fabulous the 1968 Signatory Bowmore might look, it's there to be drunk. A hardcore collector wouldn't pay anything for it. The Silent Stills Edition of Signatory is no exception. The Port Ellen original bottlings (Annual Releases) regularly reached higher prices than the Signatory Port Ellen wooden cases with a miniature and a piece of cask. Diageo's Rare Malts Selection is an exception. Since the bottler of the series was also the owner of the distilleries, this series took the status of an original bottling. Only when there have been no more original bottlings for several years, these bottles start to increase in value.

Finally let's talk about the distilleries themselves. Auctions of old malt whisky bottles have the biggest influence on the value development of young whiskies. Only distilleries that already had malt whisky bottles on the market shortly after World War II, or even better before the war, have an actual chance to reach high prices among collectors. The big auctions in Scotland have a model function. Thus there are only about a dozen distilleries with a potential for an exceptional increase in value.

Selling your collector's bottles is hard. The exceptional specimens can be sold at auctions. Big auctioneers are only seldom interested in bottles worth less than 300 euros. With these bottles their agio is too low to make a profit. Get into an optimum position with strategic purchases. Then you just have to wait between 10 and 30 years before you can reap the benefits of your labour. Only few bottles in your collection will increase in value exorbitantly, but some will for sure.

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