Not unlike stocks and bonds, people across the globe are turning to whiskey for investments. And as technology evolves, it’s increasingly easier for the masses to get their hands on shares of rare and fine spirits previously reserved for distillers and the uber wealthy.
CaskX, an investment company based in Los Angeles, took to the call to offer individuals opportunities to invest in shares of bourbon from leading distilleries across the United States.
The company, which has already proven this model with Scotch whisky, recently began qualifying investors to grab a piece of one of the fastest growing categories in the spirits industry … bourbon.
“After having success in the scotch world, bourbon was the next natural step,” said Jeremy Kasler, CEO of CaskX. “This unique investment opportunity allows qualified investors the opportunity to bet on bourbon, a category that has appreciated on average 13.85 percent per year since 2010.”
CaskX purchases bourbon barrels in bulk from some of the rising stars in the bourbon industry in order to secure the best deals at the best prices for its clients. The bourbon is aged in a licensed Kentucky warehouse, increasing its value as it matures. When the bourbon comes to age, CaskX helps its clients resell, bottle, or distribute their whiskey portfolio.
“This process is really a win-win for the distilleries and the investors,” Kasler said. “By selling barrels into our system, it keeps the lights on for some distilleries while allowing investors to gain entry to a category that historically has done well, even in economic uncertainty. Not to mention this process allows the whiskey to mature to its full potential in a market where distillers are often forced to bottle early in order to turn profits.”
CaskX pours over data from the past two decades in the whiskey industry, current trends, and the global economy and creates growth estimations to help clients understand the profit potential of each barrel they buy. Its online platform allows investors to browse, organize, and examine their portfolio, helping to make informed decisions.
Kasler recently answered some of The Whiskey Wash’s burning questions about CaskX and bourbon and whiskey investing.
TWW: Is this the perfect time to begin investing in bourbon in this way, are we at the beginning of this explosion in bourbon investing?
Kasler: In our opinion, this is the perfect time to invest in bourbon. We are seeing all the indicators that quality-aged bourbon will fetch great prices for many years to come. We are seeing increased demand for quality bourbon not just in the U.S. but globally. Markets like China, India and Asia can’t get enough of it.
If you look at where Scotch was 10 or 15 years ago, prices for new-make barrels were similar to bourbon prices now, and Scotch prices have gone through the roof as demand has increased. We see bourbon taking a very similar trajectory.
TWW: Why unaged bourbon versus aged bourbon?
Kasler: Two reasons. First, there is very little aged bourbon in the market. Everything is being snapped up by new brands, the distilleries themselves or brokers. Second, if you can find it, it’s probably too expensive and wouldn’t make sense investment-wise. New-make bourbon or whiskey, on the other hand, is affordable for investors and will only increase in value as it ages. You just have to be patient.
TWW: How would you explain the average bourbon collector’s way into CaskX investing?
Kasler: The average bourbon collector is someone who has some experience in investing (due to current SEC rules, all of our investors have to be an accredited investor). They tend to have an appreciation for bourbon, they’ve heard the buzz about opportunities in investing in bourbon and, after doing their due diligence, they will take the plunge.
TWW: Tell us how CaskX did with the investment platform in Scotch whiskey.
Kasler: Anyone who has invested in scotch in the last 10 to 15 years has made money. It should be noted that spirits investing is not a short-term trade. You need to allow at least 4 to 10 years to see excellent returns. The longer the better.
TWW: Could you compare investing in bourbon to something like sports cards or classic car collecting?
Kasler: Of course there are similarities, but the unique aspect to bourbon and scotch as a tradable commodity is that it increases in value as it ages regardless of market conditions. No other commodity can make this claim.
TWW: Will people be able to trade bourbon shares like stocks, in a way?
Kasler: As the market and public awareness expands, no doubt there will be opportunities to invest in bourbon funds that will allow investors to trade paper as they do on the stock market. We prefer the feeling of owning actual barrels, which holds intrinsic value.
TWW: Is there a potential for side income, similar to that of NFTs or cryptocurrency?
Kasler: No doubt that many tech-based investment companies are looking at whiskey as a great way to underwrite trading in NFTs or crypto.
TWW: What does the future hold for CaskX in five, 10 years?
Kasler: As the world’s leading bourbon investment brokerage, we intend to spread the message far and wide. We currently have offices in Los Angeles, Louisville, Sydney and Hong Kong. We are excited to help people invest in and profit from a product they know and love. Of course there’s also a huge benefit for the distilleries, as we help them monetize their production from Day 1 rather than having to wait four to eight years.
We hope to expand our portfolio to encompass many types of whiskey, and we intend to partner with some of the best distilleries in the U.S. and around the globe.