January 2024
The majority of investment spirits are made up of Scotch and Japanese Whisky. However, Bourbon Whiskey is growing fast with global demand increasing and expected to grow at an annual rate of 4-5% by 2031 as consumers and collectors shift to more innovative products in the marketplace. Wheated bourbon, for example, accounted for 1/3 of the domestic bourbon market, showing the trend for a sweeter milder spirit, but also a demand for innovation with “high-quality, American-blended whiskies, ryes, American single malts and other whiskies that go beyond straight bourbon” according to Andrew Duncan of Sazerac.
Premiumization is a major factor expected to drive the market and is seen with mixed cocktails and drinks within the millennial demographic. Innovations like barrel finishing and more focus on barrel select and a distillery focused profile are pushing the market forward with younger consumers. Higher age statements will compete with scotch and Japanese Whisky in the world market for investment spirits. For example, Michter’s 25 year sells for over $10,000 in the secondary market while Macallan Anniversary Malt 25 sells for $5,000. There are differences with production, etc. but gives an indication that Bourbon has taken a step forward globally in the last 5 years. Globally Bourbon is expected to grow even faster, with an estimated annual growth of 7% by 2030 worldwide according to a Zion Market Research report.
Michter’s was selected the ‘Most Admired Whisky’ by drinks international 2022, marking a significant turning point in the global view of Bourbon. More than 12.6 million barrels of bourbon are aging in Kentucky, which is a milestone in volume and producers are responding by expanding distilleries, adding tasting rooms and renovating buildings as consumers demand more experiential opportunities.
The rise of global whisky tourism and experiential consumption is further fueling the demand and growth in the market. Distilleries, particularly in traditional whiskey-producing regions like Scotland, Ireland, and the US, are witnessing a large increase in visitors interested in understanding the whisky making process. Such tours often culminate in tastings, which gives consumers a chance to explore the full line of products and purchase onsite. American whiskey is poised to compete with Scotch and Japanese Whisky in the global market as a consumer drink and investment quality product in the coming years.
Bourbon as an investment is a relatively new category but has seen strong growth in the past 5 years fueled by Covid and now the general trends toward craft and artisanal spirits and cocktails. Even during the recent soft market, Bourbon has held its value and seen increases compared to other spirit categories. Below is an example of the bourbons we are closely following at Cask100 as potential acquisitions in the next 6 – 12 months.
