*This isn’t monetary recommendation. We right here at Nice Drams concentrate on whisky, not monetary planning. Whereas we do provide whisky casks, we provide them to your enjoyment, somewhat than as an funding. Cask investments, like another, can go up and down in worth. If you’re out there for a cask, or just a wee dram of your favorite bottle, get in contact with us as we speak and we are able to do the remaining.
Many years in the past, so far as whisky consumption was involved, primarily you had the UK and the USA because the world’s primary whisky/whiskey drinkers. At present nonetheless, because of Asia particularly, issues are very totally different.
Japanese whisky for instance, is proving extra aggressive than ever, and with established manufacturers comparable to Yamazaki and Hibiki doing so effectively, it’s hardly a shock. It isn’t simply Japan that’s serving to solidify whisky’s recognition in Asia both. China can also be serving to to usher in these adjustments, although not essentially for the explanations you would possibly suppose.
Whisky Demand in Asia Rising by the Day
Let’s face it, financially, the previous couple of years, not solely right here within the UK however everywhere in the globe as effectively, have been robust from a monetary standpoint. We’ve seen inflation attain report highs, we’ve had rates of interest hiked in an try and deal with inflation, to not point out astronomically excessive power costs.
Whereas all sectors have felt the pinch, the spirits market particularly has actually been hit laborious (take it from somebody who is aware of). Due to this fact, it ought to come as no shock to be taught that general development within the spirits market has been very up and down.
Whereas there are indicators of hope on the horizon, it’ll be some time earlier than issues really recuperate. Regardless of this, whisky has remained extraordinarily standard and has helped maintain the spirits market afloat. However why? Effectively, one of many primary causes for this is because of whisky demand being bolstered by abroad exports.
In 2023, single malt export numbers elevated by 2%, serving to the market to achieve a £2bn threshold. A lot of this demand has been pushed by the Asian markets. It’s right here the place cask brokers are starting to show their consideration.
2023 noticed Scotch whisky imports to Singapore improve by 19%, and eight.3% in Taiwan. China can also be getting in on the cask motion, significantly from an funding standpoint.
Cask Investments Look Extra Promising than Ever for 2024
So, how’s the cask market searching for 2024? Effectively, thus far, issues are trying very promising certainly.
India has seen cask investments drop by 22% as traders await import whisky obligation tax cuts later this yr. Presently, import obligation numbers stand at 150% above the MIP. That is set to be diminished to 100% on bottled scotch, and halved to 75% for cask shipments. Till these cuts, issues are very a lot stagnant.
Within the U.S, Scotch imports have been down 7% in each worth and quantity in February 2024. This noticed them slip to under pre-pandemic ranges. For sure, this had cask traders nervous within the States, and had them searching for viable alternate options. These alternate options look like in Asia, with China heading the cost.
Regardless of whisky making up simply 2% of China’s spirit consumption, whisky gross sales there are estimated to be value round $7bn by 2027, and be value roughly 5 instances the whole quantity seen globally. That is largely right down to the truth that whisky is greater than holding its personal in opposition to Baijiu – a transparent spirit made out of fermented grains that’s usually consumed at Chinese language social occasions.
Baijiu packs an actual punch and might be as excessive as 60% ABV. Chinese language shoppers look like searching for much less alcoholic spirits. Add to this, the truth that many single malt Scotch whisky imports have a sure status related to them, and you may see why whisky is beginning to win over Chinese language spirit drinkers.
Whisky gross sales are being pushed by feminine drinkers, in addition to city, younger, center class, and educated drinkers who look like shunning Baijiu in favour of our Scottish drams as an alternative. In consequence, we’re seeing extra worldwide manufacturers opening up distilleries throughout China.
China’s economic system is just not essentially the most secure, with property and capital markets each underperforming. To offset these dangers, China’s ultra-high internet value traders look like investing in whisky casks as a means of managing their wealth with long-term development, till the markets choose up.
