Cask Trade Around the World
We are thrilled to see Diva Channel, a luxury lifestyle publication in Hong Kong, covering Cask Trade’s story alongside emerging trends in the whisky and rum industry. The coverage can be found online here, with the translated copy below.
Alternative Investment in Whisky: Buying Casks to Become an Advanced Whisky Enthusiast!
The Rise of Cask Trading
For whisky enthusiasts, buying a cask is both alluring and daunting due to potential high costs. However, it's becoming more accessible. The cask trading industry has grown rapidly, with some enthusiasts even purchasing casks to mark significant life events, like a child's birth. This trend shows that cask trading isn't just an investment, but also a lifestyle choice. Simon Aron, founder of Cask Trade, shares insights into this evolving market.
Simon's Journey into Cask Trading
The creation of a brand often stems from a desire for change. Simon's story sounds somewhat familiar: "I enjoy drinking whisky, and eventually started buying casks. There were many unpleasant experiences along the way. For instance, I once bought a whisky cask many years ago, only to find it had vanished from the intermediary company's warehouse. It turned out the company had mistakenly sold it to another customer. They eventually refunded me, but the price of that cask I had set my heart on had doubled in a few years. Considering the effort invested, such disappointing experiences can be truly disheartening."
Cask Trade's Growth and Challenges
Simon has been an entrepreneur since 1991, but his focus was on the IT industry. Starting a cask trading business from his hobby only began in 2017. One can imagine the joys and challenges of exploring a new field. "Over the past five years, Cask Trade has sold about 9,000 single cask whiskies to over 1,800 private clients and about 150 independent bottlers, with business spanning six continents.
While it seems like a bountiful period, the competition has intensified. From just a few competitors when we started, there are now 50 to 60 entities in the industry. And don't forget the pandemic years. Frankly, our business volume increased rather than decreased, probably because many people had nothing to do at home, so they decided to drink good whisky and learn about new investments. However, the isolation brought many inconveniences. For example, we had to go to specific locations of international courier companies alone to send large volumes of cask samples to different customers, which could take up an entire day each time. The workload was truly exhausting."
Cask Trade's Competitive Edge
Given the intense competition, maintaining an advantage is crucial. "We sell single cask spirits distilled from 1973 to 2023, spanning 50 years, from 170 distilleries worldwide, including whisky, rum, cognac, and Armagnac. We've invested considerable effort in maintaining good relationships with many renowned distilleries like Glenrothes, Bunnahabhain, Caol Ila, and Springbank. It's important to note that many whisky distilleries are reluctant to sell their precious single cask stocks, so during the procurement process, we must do our due diligence, from thorough checks to research reports, which are basic requirements to reassure our clients. At the same time, we provide reliable logistics management for our clients, allowing them to easily track the status of their purchased casks online and frequently sample them to anticipate the aging process of the spirits."
Timing in Cask Investment
For most novice investors, the timing of buying and selling is crucial, as the life of whisky depends on its aging time in the barrel. "When selling or bottling a single cask, your needs are the determining factor, but you also need to consider the age of the whisky itself. The age and flavor of the whisky are two important factors to consider. The bottling year can be decided based on market trends and traditions, for example, some classic whisky ages are 10, 12, 15, 18, and 21 years. Our sales data also leads to the same conclusion. Among whiskies spanning 50 years, 38% of the single casks sold by Cask Trade to independent bottlers are between 10-15 years old."
The Rum Revolution
Simon highlighted an intriguing trend: the "rum revolution". In the past decade, interest in rum's heritage has surged. Craft distilleries are reviving traditional techniques, while major spirits companies are investing heavily in premium rums. The global rum market is projected to grow at 5.2% CAGR by 2028. Notably, in 2022, UK rum sales exceeded £1 billion, overtaking whisky's market share.
Emerging Trends in Cask Trading
Besides this, there are other noteworthy new trends, such as English whisky no longer being exclusively Scottish, with distilleries like Cotswolds Distillery and White Peaks Distillery gradually emerging; the importance of single cask naming rights; overly rare and difficult to control high-age single casks; distilleries not buying back whisky; emerging whisky producing regions (like India, Australia, Taiwan, etc.); and interesting casks that dare to try new things (like wine casks, cognac casks, etc.).
The knowledge of cask trading is definitely not something that can be fully mastered overnight, which is why having experts like Simon to help is increasingly important.