Scotch and Bonds: How to Invest in a Liquor Collection

Confession: I have a wish list whiskey—or rather, 54 of them. It’s Hanyu Ichiro’s Card Series, a lineup of 54 bottles (the number mirroring that of a deck of cards), noted for the playing cards depicted on each bottle’s label as well as for the delicious Japanese whisky inside. 

In November 2020, a full lineup of the Card Series sold for more than $1.5 million in a Hong Kong auction hosted by auction house Bonhams. But even one bottle is pretty dear, usually starting around the $10,000 range. So when I spotted the Joker Card, a 14-year-old age-statement bottling on the block at online auction house Unicorn Auctions, I wondered who would snap it up. While I didn’t place a bid of my own, I spent the weekend watching Unicorn, obsessively refreshing my browser. On Sunday afternoon, the seconds ticked down: 1m 42s left … 41s … 40s … 39s ….

The Joker bottle—“condition: slightly stained label”—topped out at $2,350, roughly half of the $5,000 reserve price (the minimum the buyer or auction house would accept), and reverted back to the seller. Perhaps I should have tried my luck after all.

The world of collectible spirits can be heady: Last year, a rare bottle of 60-year-old Macallan distilled in 1926 broke records, fetching an eye-popping $1.9 million at auction. A look at the Apex 1000 index, which measures the 1,000 best-performing bottles of whiskey, shows an increase of about 6% in the last 12 months and a whopping 592% increase over a 10-year span. 

If you already have a special bottle on hand or are contemplating starting a collection, via online auctions, traditional auction houses or “dusties” found at estate sales, these are some guidelines to keep in mind.

1. Decide Whether You’re a Drinker or an Investor

Andy Simpson, the co-founder of the U.K.’s RareWhisky101, a whisky broker and analysis firm, speaking on a virtual panel “The Business of Whisky Investment,” explained the difference: A drinker buys a special bottle with the intent of consuming it eventually. An investor is willing to put a bottle away for years, even decades, and intends to sell it unopened in order to reap a profit.

Can you be both? Absolutely. “If you can, buy two of everything,” says Simpson, although that can be difficult with bottles that are expensive or extremely rare. “One to drink, one to keep on the shelf.”

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2. Understand That Collectible Spirits Are a “Passion Investment”

Bottles won’t take the place of stocks and bonds, sorry. “Never invest what you can’t afford to lose,” says Simpson. After all, the value might take a long time to go up—from five to 20 years, he estimates—or it might go down. “Unlike shares, there are no dividends. It’s pure capital appreciation.” That means collectors need to do their research and know when the time is right to buy or sell.

But for investors who can scoop up bottles within their financial means, it can be a pleasurable pursuit. For example, some collectors focus on building a “personal vintage,” acquiring bottles that were distilled or released in their birth year, for example. “If you want to invest, go ahead and enjoy it,” says Simpson. “It’s a passion investment.”

3. When in Doubt, Focus on Whiskey

It’s the most widely collected and tracked spirits category, meaning there’s a robust market to buy and sell bottles. At high-end auction house Sotheby’s, in 2020 scotch and Japanese whisky have accounted for most of its spirits sales, estimates Jamie Ritchie, the worldwide head of the Sotheby’s Wine & Spirits division, trailed by China’s Moutai. According to Art Market Research, rare whisky had been the No. 1 “investment of passion” until this past summer, when luxury handbags claimed that title.

American whiskey also attracts interest. “Some particular distilleries, Buffalo Trace brands in particular, have gotten really hot,” says Derek Correia, the president of ReserveBar, a purchasing platform for luxury spirits and Champagne. “As with scotch and Asian whiskies, it’s generally rooted in a great product that’s scarce. One of the ways that certain distilleries make that happen is by limiting the amount that they make and intentionally creating a scarcity associated with bourbons in particular at the brand level.” He notes that bourbon and scotch are the two largest segments on ReserveBar, and both are still growing. 

4. Consider Quality and Scarcity

The big question most would-be investors ask: How do you know whether a bottle is worth putting away? “Age matters massively,” says Simpson. “In drinking, older isn’t necessarily better. In investing, it is.” In particular, many collectors prize bottles older than 50 years.

Hard-to-find bottles are also considered highly collectible, such as bottles from now-closed distilleries or “zombie” distilleries (once shuttered but recently brought back to life) or discontinued age-statement bottles. Limited-edition or single-cask bottlings also can bring in bids. 

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5. Protect Your Investment

Hunting down great bottles is the fun part. But once you’ve secured something great, it’s important to protect it so it will retain its value when you’re ready to sell and realize a profit.

Many high-end investors take out insurance policies on their wine and spirits collections, says Alexandra Richards, a private clients development executive at the U.K.’s Bruce Stevenson Insurance Brokers. While policy specifics vary, most cover physical loss such as breakage incurred when moving a collection, water damage or simply accidentally dropping a bottle. She even recalls an instance where snails ate the labels of a client’s prized bottle, diminishing its value.

What’s not covered: “Loss or damage to whiskey as a result of poor care of a collection,” says Richards, such as rust, mildew, or exposure to light or extreme temperatures. So store those bottles with care.

Insurance policies also don’t cover what RareWhisky101’s Simpson lumps in with “physical or logistical” risk: “When you’ve been out and had a couple too many beers with your friends and you come back in and the bottle looks expensive and cool—too enticing to avoid opening it.” 

There’s only one way to protect against that particular loss, says Simpson: “Don’t drink it.”