In 2021, UK media reported the happy story of banker Roger Parfitt who celebrated an early retirement when two casks of Scotch whisky bought on a whim netted him a return of 47 times the original amount. Anecdotes like these show how investment in fine spirits like whiskies, brandies and rum is becoming an increasingly popular alternative to a traditional investment portfolio.

Private cask programmes are becoming all the rage 

For retail investors, such casks are offered through what’s known as “private cask programmes”. This is basically a service offered by companies that allow consumers like you and I to buy our own cask of spirits, and then have them bottled under our own labels.

And because these would all be “single cask spirits” (as opposed to original bottlings from, say Glenmorangie, that have been blended from multiple casks to achieve consistent flavour), each cask would have its own interesting or unusual characteristics that may result from the wood, the vintage, or other environmental factors that influence the aging process. This gives each cask more individuality and rarity.

Normally, private cask programmes have been incredibly popular with businesses, such as bars, restaurants, or hotels, as a way to create their own special blends or offer unique products to their customers. But as interest in fine spirits take off, such programmes are also increasingly popular amongst retail investors who are really into whisky or rum.

You could easily see why: the buyer is allowed to pick out a cask that suits their preference (including distillery and cask-style used), giving them a one-of-a-kind, custom-made bottling that they have personally selected.

Celebrations and Investments

Of course, a lucky cask owner like Parfitt was very early to the party. He purchased those two casks almost 30 years ago in 1994 – one of which was a Macallan – which has since become one of the most sought-after brands in the single malt category that is almost impossible to find at non-astronomical prices today.

But you're still not too late to the game if you know where to find a good selection. If you play your cards right,  investing in whisky can be a successful strategy, with some categories of whisky investment funds consistently outperforming the S&P500. Knight Frank, a well-known London-based investment research firm, has observed a 500+% appreciation in portfolio of rare whisky over the last decade (this index tracks the performance of rare bottles, and does not directly indicate the performance of whisky casks).

On the other hand, dollars and cents are not everyone’s primary concern.

In the Asian context, luxury watches or jewelry are commonly purchased to commemorate a significant life event. These days though, buying private casks of your favourite whisky is an increasingly common phenomenon. The benefit is that you could actually bottle some of that stuff for your friends or family – and for some of the hundreds of guests attending your event. Indeed, the lucky Roger Parfitt did not purchase his casks with a serious eye for investment. A whisky enthusiast himself, he would just as well have thrown a party with the whisky if it had never gone up in value. Joking with a reporter from Luxurious magazine, he said “It always had that fallback for me… you could drown your sorrows if it didn’t work out financially.” I personally know an acquaintance who bought a cask filled in the birth year of their child, only to be opened when she comes of age 21 years later.

What you do need to watch out for

Of course, discretion and due diligence are important when money is involved. “Scammers” come in many forms, whether they are cask sellers who misrepresent cask information, provide poor proof of provenance and authenticity, or make you overpay for low quality whisky (e.g. an “overly oaked” cask of Macallan).

Even if a private cask programme is offered by a honest, legitimate business, there are still risks involved in that the business that holds on to your cask on your behalf goes bankrupt in future. Even if your cask appreciates in value 10 years down the road, there may be no way to cash out your profits (or even your principal) if the company holding on to your cask no longer exists.

Therefore, if you are keen to explore purchasing a private cask, it’s key to do some due diligence and research before putting money down. Find a well-established and reputable company that wouldn’t go under the next day. And while the brand name of the distillery is a big factor, the quality of the underlying spirit is also crucial in helping to hold the value of your asset.

One well-established player offering private casks is La Maison du Whisky (LMDW), a well-established spirits retailer from France, founded in 1956. It has since become a respected and influential player in the world of high-end spirits with many outlets across Paris and in Singapore and Hong Kong. 

LMDW's Singapore branch has also been a key stakeholder in Singapore's bar and spirits scene, partnering with the likes of Shangri-La Hotel and The Swan Song Bar (check out our interview with them) to create exclusive bottlings for their customers.

 

When it comes to the quality of the spirit, LMDW is also quite concerned about maintaining its reputation when it recommends casks under its Private Cask Programme. The company enjoys privileged relations with big players in the Scotch whisky market such as independent bottlers Gordon & MacPhail and Signatory Vintage, both specialised in vintage whiskies and rare bottlings. LMDW is also known for bottling high-quality whiskies – the best-known example being its range of independent bottlings under the highly coveted "Artist" label that continues to fetch high prices on in auctions. Before casks are procured by LMDW, the spirit would be subject to quality screen via multiple tastings by a group of experts.

No private cask programme would come with guaranteed returns. But a lot can be done in the way of maximising returns and minimising risks. When it comes to selecting a business to purchase your cask on your behalf, you’d better choose a stable business that wouldn’t fold tomorrow, and with a good track record. To that end, LMDW has been around for close to 70 years with an incredibly extensive alcohol distribution network. Look up auction sites and you would also notice that LMDW's independent bottlings tend to go for higher and higher prices, a testament to its rigorous cask selection process and resaleability.

LMDW’s Private Cask Programme is a guided and bespoke journey that lasts for a year, beginning with a tasting of the spirit in the cask. This is a bespoke service; customers receive advice on the flavour profile, bottling strength and design of the label with LMDW’s in-house designers. Labels could be freely customised to incorporate personal names, corporate logos or commissioned art pieces for instance. This lets you create a one-of-a-kind bottling that could be resold, or shared with friends and family.

The extensive list of casks available through LMDW includes whiskies from renowned Scotch distilleries like Ben Nevis, Caol Ila and Glenlivet, to Irish, French and certain Asian distilleries. The programme also extends to rums and cognacs. The "Rum of the World" series from LMDW is highly desired and consists of single casks from famous distilleries like Worthy Park, Foursquare, and to up-and-coming distilleries in Australia, Fiji and even Cambodia.

There are some “economies of scale” and cost savings in purchasing an entire cask, instead of bottles with prices that have been inflated in the booming secondary market. LMDW also often sees several friends coming together to bottle a cask before splitting the bottles amongst themselves.

Whether it is for a wedding, the arrival of a newborn, a celebration of a business milestone, or a pure alternative investment play, choosing an institution like LMDW is probably one of the safest options for those looking to invest in high-end spirits rum. Their strong connections with producers gives access to a wide range of casks, and their expert guidance throughout the process from cask recommendations and tasting to label design and bottling makes for a smooth and well-assured experience.

Protecting your precious bottle collection

88 Bamboo Editorial Team