whisky cask investment

3 Reasons the Whisky Industry Needs Investors

Distilleries can stand to make a significant profit by ageing their own spirit and releasing the expression onto the market, so why would a distillery want an investor to purchase one of their casks? After all, the distillery would have to sell a new-make cask at a significantly lower price than what they could get if the cask were allowed to mature for several years. While it may not seem like a logical business decision, the whisky industry actually benefits from investors in three big ways. 

1. Increase Exposure

Plenty of distilleries throughout Scotland are kept secret from the world of single malt expressions. Spirit industry giants may run their hidden distilleries at full capacity, churning out magnificent cask after cask of whisky while hoarding it all for their blended masterpieces. These blends rely on consistent, high-quality components to keep their followers coming back for more.

Without investors, some of these hidden gems would never be discovered by enthusiasts. However, positive exposure can have a significant impact on the distillery. Besides the ever-growing market for incredible single malt expressions, gaining a foot in the spirit world can lead to a larger following for the blends that a distillery supports. In the end, it can mean a more dedicated following to a wide range of brands housed under a spirit group.

2. Build the Distillery Brand

Distillery owners can easily see the benefits of having a large following for each distillery. There is a growing market for single malt expressions and connoisseurs around the globe consistently seek out the most elite whisky available for the ultimate tasting experience. While the distillery may not currently have official releases, building the brand up for that distillery can pave the way for future success in official bottlings. 

Casks picked up by investors are likely to find their way into the hands of an independent bottler. With an established following of whisky enthusiasts, independent bottlers can greatly boost the brand of lesser-known distilleries and grow a dedicated following. Once a distillery sees how their spirit is performing as independent expressions, they may choose to release official bottlings.

3. Improve Cash Flow

Cash keeps the distillery doors open and the whisky flowing. Without it, the world would enter a kind of depression; a shortage of the water of life. While this concern exists for any kind of business, crafting the perfect dram creates a unique cash flow situation. In most cases, a business would buy materials, create their product, and introduce it to the market right away.

But whisky is different. The distillery can buy their materials and distil spirit relatively quickly. However, whisky isn’t whisky for at least 3 years and the best casks can undergo decades of maturation before being released to enthusiasts. Experts know that it’s worth the wait (and we agree!), but how can a distillery manage to stay in business if it won’t have income for the first several years when starting out?

Easy – distilleries can rely on a pool of investors to purchase new-make casks and hold them through maturation before either selling or bottling them for consumption. While it’s true that a distillery can stand to make a much greater profit by holding its own cask to maturation, a cash flow shortage can create enough motivation to part with an occasional cask. 

Distilleries Need Whisky Investors

Whisky investment opportunities help investors to grow and safeguard their wealth while also providing distilleries a helping hand with their business. Not only can investors keep the doors open by providing fast cash when a distillery is starting out, but investors can also help distilleries to gain exposure and create a healthy brand as a single malt expression. 

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