The Hottest Spirit on the Market Right Now Is Whatever’s Expensive
2018 may have seen the end of the bull market, but if you’re looking to make a quick buck, the spirits industry may be your best bet. In the past year, sales at whiskey auctions have been on a torrid pace, and even at the liquor store, more people appear to be shopping by the sticker price.
According to the newly released Wealth Report 2019, rare whiskey easily topped the Knight Frank Luxury Investment Index over both the past 12 months and 10 years. In the past year, rare whiskey has seen its value jump 40 percent. The next highest luxury asset investment over that time was coins which were up a mere 12 percent, followed by wine at 9 percent, art at 9 percent, and watches at 5 percent. The discrepancies are equally eye-popping over the past decade: The value of rare whiskies is up 582 percent, more than double the next best investment, cars, which is up 258 percent. Following that was coins, up 193 percent.
Though you may not be keeping up on your coin collecting stats, if you’ve been following the whiskey auction market (like we have), this incredible jump is no surprise. 2018 saw what felt like a never-ending streak of record-breaking sales — be it the repeated increases in price for the most expensive bottle ever or even just ridiculous sales numbers on tiny mini-bottles. “The stunning price growth of rare single malt whiskies shows that the appetite for new ‘alternative’ asset classes remains strong among high-net-worth investors,” Andrew Shirley, editor of The Wealth Report, was quoted as saying.
But it’s not just rare whiskey that’s seeing tremendous growth. Coincidentally, yesterday, CNN Business also ran a piece on the boom in “really expensive liquor.” The news site reported that production of “super-premium liquors,” which cost $35 or more, jumped last year according to figures from the Distilled Spirits Council. Super-premium rum saw its volumes increase by 26.8 percent year-over-year, while super-premium numbers were also up for brandy and cognac (26.2 percent), American whiskey (16.9 percent), gin (14.7 percent), and tequila and mescal (9.7 percent).
When the council initially released its 2018 stats last month, Council Chief Economist David Ozgo specifically singled out high-end premium and super-premium products thanks to revenue increases of 8.9 percent and 10.5 percent, respectively. “Growth was concentrated in the higher priced categories, allowing the industry to enjoy significant revenue growth while also picking up drinking occasions from other beverages,” Ozgo stated. “The continued excitement surrounding super premium American whiskeys is creating a halo effect for the entire whiskey category.”
As CNN pointed out, Brown-Forman, the company behind Jack Daniel’s, confirmed this fact during an analyst call yesterday. Sales of their super-premium American whiskies — which include brands like Woodford Reserve, Jack Daniel's Single Barrel, and Gentleman Jack — were up 21 percent in the past nine-month period year-over-year. “Woodford is on track to be the single largest contributor to growth in the US market this fiscal year,” CEO Lawson Whiting was quoted as saying. “The brand is simply on fire.”
With demand like that, maybe they should consider raising the price?