VCL Vintners, which manages £70m worth of investment-grade Scotch whisky casks for its network of retail and institutional investors, believes that 2022 will be a bumper year for the whisky investors. Distilleries are holding back liquid due to the limited amounts that they have, which is particularly the case in the old and rare side of the market, as products are currently extremely hard to source. Supply chains issues have also hampered the sector, reflecting the wider trend in most industries and sectors globally. Across all age statements, prices are steadily increasing and the ‘majors’ are becoming scarcer; with impressive returns on middle-market whiskies now, and this is expected to continue into the New Year too.
After the sell-out run of VCL’s Vintners first bottling line, The Young Spirits from Royal Brackla and BenRiach distilleries, in December, the whisky investment company is planning to release two more bottling lines in the first quarter of 2022. VCL sees growing demand for new fill whiskies on offer by distilleries.
The US market will be a key source of whisky investment. Although the tariffs imposed by President Trump on single malt whisky were lifted by the Biden administration in March 2021, the ongoing coronavirus pandemic and multiple supply chain bottlenecks have limited the trade of goods across the Atlantic. The demand for Scotch is sure to sustain well into 2022, and if the pressures on supply chains are not resolved, prices are also expected to continue to climb up.
Commenting on other trends, VCL expects to see investors under the age of 40 continue to be attracted to whisky investment, with the asset quickly becoming a favourite amongst millennials. At VCL Vintners, over 60% of its clients are under the age of 45, and nearly a quarter are aged 25-34 years old. This new breed of investor has more information than any before, quite literally at their fingertips on their smartphones. The instability of the markets under the forces of covid variants, supply chain bottlenecks, and the energy transition, is pushing investors to seek alternative ways to grow their money, and a growing number of savvy millennials are finding whisky.
Many focused investors are adopting digital currencies, particularly those in Asian countries where there is consistent and substantial demand for whisky. In 2022, there is expected to see increased demand for brokers to support purchases of whisky casks via cryptocurrencies and to offer more sophisticated digital and blockchain solutions.
