The Proof is in Barrel: The Benefits of American Whiskey Investing in 2024
As we enter an election year in the U.S., investors are faced with a lot of questions. What will the economy do? How will the financial markets behave? What could be the impact of continued global conflict? Historically, in times like these, investors have turned to hard assets and alternative investments. And in the world of alternative investments, premium American whiskey has emerged as a distinctive and increasingly accessible asset class.
The allure of whiskey investing continues to grow, driven by a combination of historical performance, increasing demand, and the burgeoning appreciation for asset-backed investments. Here’s why we think premium American whiskey might be a smart move for investors in 2024.
Historical Performance
Whiskey has demonstrated impressive historical performance as an investment. Over the past decade, whiskey has appreciated by as much as 500%, outperforming traditional investments like stocks and bonds, as well as other alternative options like gold and silver. The limited supply of aged whiskey, combined with its increasing popularity, has created a unique market dynamic that can reward investors with substantial returns.
Tangible Asset with Intrinsic Value
Unlike stocks or bonds, whiskey is a tangible asset with intrinsic value. Each cask represents a unique blend, distillation process, and aging period, all contributing to its individual worth. As a result, whiskey investing provides investors with a physical, enjoyable, unique asset that can be held for the long-term, sold for profit and eventually consumed.
Growing Demand
In the U.S., whiskey has become the best-selling spirit category for on-premise consumption in recent years. Of the whiskey options, American whiskey is the top seller in the U.S. at more than $5 billion in sales and growing at 10.5% a year. Globally, the demand for premium American whiskey also continues to rise. This is fueled by a growing appreciation for its craftsmanship and a desire for a uniquely American flavor profile. Emerging markets, particularly in Asia, have seen a surge in demand for American whiskey. This trend is expected to persist in 2024, making whiskey a compelling investment option.
Limited Supply of Aged Whiskey
One of the key factors contributing to the value of aged whiskey is its limited supply. The aging process for whiskey is time-consuming, and not every distillery has aged batches available in large quantities. As existing supplies diminish and new releases need time to age, the rarity of premium aged whiskey enhances its investment appeal.
Diversification of Investment Portfolio
Including whiskey in an investment portfolio can provide diversification benefits. Whiskey’s performance is not directly correlated with traditional financial markets, offering a hedge against economic downturns or market volatility. By adding an alternative asset like whiskey to a diversified portfolio, investors can potentially reduce overall risk and enhance returns.
Cultural and Social Appeal
Investing in whiskey goes beyond financial considerations; it also taps into the cultural and social aspects of the spirit. Whiskey has a rich history and is often associated with celebrations, milestones, and special occasions. Investing in whiskey can be a source of pride and a conversation starter, making it an investment that provides more than monetary value.
Conclusion
As we navigate the uncertainty of the investment landscape in 2024, whiskey stands out as a unique and appealing option. With a track record of historical performance, increasing global demand, and the intrinsic value of tangible assets, whiskey investing offers a compelling opportunity for those looking to diversify their portfolios. We can’t predict how other investments will perform in 2024, but for whiskey investors, the proof will be in the barrel.
About Spirits Capital
Spirits Capital is a fintech company that merges technology with the alternative asset class of premium American whiskey. Spirits has built a platform that provides investors with a secure and transparent way to capitalize on the growth in value of whiskey while it matures in the barrel. In addition, Spirits has created the Distilled Barrels Financial Exchange (“DBFEX”), a cutting-edge digital platform for the global trading of aged whiskey barrels. Learn more at www.spiritscap.com.