Irish Whiskey Investment Tips: How to Get Started

 

Getting Started With Irish Whiskey Investment

Ireland, a country renowned for its lush green landscapes, rich history, and warm hospitality, has also gifted the world with one of its most cherished treasures - Irish whiskey. With its rich heritage and growing global popularity, Irish whiskey investment it is an attractive option for investors seeking to diversify their portfolios. In order to understand the basics of Irish whiskey investment, this article will delve into the history, the flavour profile, the basics of investment, including the production process, and factors to consider when investing.

Why Irish Whiskey?

In 2022, the value of Irish Whiskey exports broke records when it accounted for €1 billion worth of sales for the Irish economy [1], but reaching this milestone hasn't been easy. In 2010, only four distilleries were in existence, but since then the popularity of Irish whiskey along with that number has grown to 40, with a colossal 3.5 million casks currently maturing. [2] As such, demand for the globally renowned spirit is at an all time high, making Irish whisky investment an attractive prospect to many.

The Heritage

Irish whiskey holds a rich heritage that spans centuries, making it an iconic spirit with a storied past. The word 'whiskey' (or whisky) is derived from the Irish (or 'Gaelic') uisce beatha, meaning "the water of life". It is not entirely clear how whiskey came into being; however, it is known that around the 12th century, Ireland and Scotland were one of the earliest European countries that used distillation to produce whiskey. Monks are often credited with bringing the art of distillation to Ireland, initially for medicinal purposes, but it wasn't long before they realized the potential of this distilled liquid for enjoyment. By 1661, distilling whiskey had become so popular -as it could be used for multiple purposes such as wound healing and medicine- that the King placed a tax on it (now known as customs and excise).

Irish Whiskey Investment - The Regional Profile

In considering the best Irish whiskey to invest in, it is important to understand the quintessential Irish whiskey style. Irish whiskey is known for its smoothness and distinctive flavour, which has contributed to its soaring popularity in recent years. To be classed as Irish, the spirit must be produced in Ireland, aged for a minimum of 3 years, distilled below 94.8 ABV (Alcohol by Volume) and the final product must be at least 40 ABV. Insight into the production process and unique characteristics can help you to understand what makes this type of spirit so sought after.

Production Process

Irish whiskey distinguishes itself from other types, such as Scotch or bourbon, through its unique production methods:

• Triple Distillation: Most Irish whiskeys are distilled three times, which contributes to their exceptional smoothness. This extra distillation step is not commonly found in other production traditions.
• Unpeated Malt: While Scotch whisky often incorporates peat during the malting process, their Irish counterpart generally uses unpeated malt, resulting in a milder, fruitier flavour profile.
• Blend of Malt and Grain Whiskeys: Irish casks of whiskey are a blend of barley, wheat and corn, offering a harmonious balance of flavours. Single malt Irish whiskeys are also available and comparable to their Scotch counterparts, but because of a tax on malted barley, the cost of producing a single malt is more expensive. As such, Irish distillers often use a blend of grains to produce blended spirits and lower the malt content to reduce costs.
• Aging in Wooden Casks: Irish cask whiskey is aged for a minimum of three years, mostly in ex-bourbon casks from the USA. However, special casks are sometimes aged in ex-sherry or wine casks from Europe. This aging process imparts rich, nuanced flavours to the spirit.
• Unlike Scotch, that is produced in column stills, the Irish use pot stills. But because the spirit is made from both malted and un-malted barley, it cannot be called a malt. Provided, however, that all of the ingredients came from one single distillery, the final product may be called a "single pot still" [3]

Unique Characteristics

Irish whiskey is celebrated for its approachable and versatile nature. Some of its notable characteristics include:

• Smoothness: Triple distillation and skilled craftsmanship result in an exceptionally smooth and easy-drinking tipple due to mixing malted and un-malted barley.
• Fruity Notes: Irish whiskey often features fruity and floral notes, with hints of apple, pear, and honey, making it a favourite among those looking for a lighter, sweeter profile.
• Variety: Irish whiskey offers a wide range of options, from everyday sippers to rare, aged gems, catering to both novice and seasoned whiskey enthusiasts. [4]

Investing in Irish Whiskey Casks - Factors to Consider

Factors to consider before you invest in Irish whiskey include assessing the brand reputation, age and rarity, limited edition releases, products from established distilleries, and researching market trends. Brand reputation plays a crucial role in the value of these investments too, as reputable brands often have a higher demand. The age and rarity of also contribute to its desirability and value. Limited edition releases can offer unique investment opportunities due to their exclusivity. Whiskey from established distilleries tends to be more sought after by collectors and investors. Researching market trends and consumer preferences helps inform investment decisions.

Brand Reputation

Established distilleries with a track record of producing quality products attract investors. Brands that have a strong following and a loyal customer base are also attractive for investment. Brand reputation plays a significant role in influencing the perceived value of whiskey. Investing in reputable brands provides a sense of security and trust for investors. By considering brand reputation, private investors and first-time investors can make informed decisions when investing.

Age and Rarity

When it comes to Irish whiskey investment, age and rarity play a crucial role. Older expressions tends to be more valuable due to its rarity and the maturation process it undergoes. Limited edition releases with unique characteristics offer great investment potential as well. Additionally, rare expressions from closed or demolished distilleries can be highly sought after by collectors and enthusiasts, further adding to their value. Age statements are another important factor to consider, as they indicate the length of maturation and contribute to the overall value of the final product. It's essential for investors to strike a balance between age, rarity, and affordability when making investment decisions.

How to Start Your Irish Whiskey Investment Journey

To start your Irish whiskey investment journey, ensure that you research distilleries and their available investment options before you delve into cask ownership. Consider joining a whiskey investment club, using the services of a broker or asking a professional for guidance and access to opportunities. Determine your budget and risk tolerance is a vital component before you decide on the best Irish whiskey investment.

Risks and Returns in Whiskey Investment

Irish whiskey cask investment comes with inherent risks and uncertainties, similar to that of investments elsewhere. The liquidity aspect can be challenging, especially when investing in casks, and returns can vary significantly based on market trends and demand. The value of your investment is subject to fluctuations in the market too, making it crucial for investors to diversify their portfolios and consider long-term investment goals. Private investors often encounter these risks and must be aware of the potential for both gains and losses. It's essential to navigate the market wisely, taking into account factors such as bonded warehouse storage and certification.

Conclusion

In conclusion, investing in Irish whiskey can be a lucrative and rewarding venture. With its rich heritage, strong growth of exports and renowned craftsmanship, Irish whiskey has stood the test of time and continues to gain popularity among enthusiasts and collectors. When considering whiskey investment, it is important to understand the basics of whiskey production and factors such as brand reputation, age, and rarity. Whether you choose to invest in cask or bottled whiskey, there are risks and returns to consider. However, with proper research and guidance, whiskey investment can be profitable. The unique characteristics and limited supply of whiskey make it a good investment option for those looking to diversify their portfolio. So raise a glass and toast to the potential success of your whiskey investment journey!

[1] https://www.irishcentral.com/culture/food-drink/irish-whiskey-export-value-2022#:~:text=The%20value%20of%20Irish%20whiskey%20exports%20to%20the,from%20Ireland%20and%20member%20data%20from%20Northern%20Ireland.

[2] Irish Whiskey International Trade Report 2022 - https://www.ibec.ie/drinksireland/news-insights-and-events/news/2022/10/25/irish-whiskey-association-publishes

[3] https://www.whisky.com/overview-of-production-in-the-different-countries/how-irish-whiskey-is-made.html

[4] https://thirstymag.com/things-that-make-irish-whisky-special/#:~:text=Whiskey%20produced%20in%20Ireland%20is%20made%20by%20mixing,is%20known%20for%20its%20smooth%20and%20gentle%20character.

Quick A&A

Is it better to invest in older or newer bottles of Irish whiskey?

When it comes to investing in Irish whiskey, older bottles tend to have a higher potential for appreciation in value. However, it's important to consider factors such as rarity, condition, and brand reputation. Ultimately, a mix of both older and newer bottles can provide a well-rounded investment portfolio.