Five things to consider when starting a whisky collection

Whisky (or whiskey if you’re from the US or Ireland) is steeped in history and tradition. It is this same concept of tradition that saw a temporary decline in the industry. But whisky has since seen a resurgence, becoming an ever-popular drink for both personal consumption and curious collection. Whisky has also become a very viable item to invest in due to the volatile economic environment. But whether you want to start a whisky collection for investing purposes or personal use, having some guidance before you begin is recommended.

1)    Know the basics of the whisky creation process

If you’re going to be a whisky collector, it seems apt that you should get to grips with the basic process of whisky creation. This gives you a better idea of some of the common terms you will hear and how it affects the whisky’s taste and value.

Here’s a lowdown on the process. Firstly there’s malting, which is the process of germinating and drying the barley, turning it into malt. Once the malt has been milled (crushed into smaller pieces), it is mixed with water to extract the starch and sugars, which dissolve within. This is known as mashing. Next is fermentation, which combines the mash with yeast which absorbs all the sugars in the liquid, turning them into alcohol.

The next stage is distillation, where the alcohol created from fermentation is poured into a still and heated with steam. Alcohol boils at a lower temperature than water so evaporates first. The evaporated alcohol is separated through a swan-neck tube into a condenser, where cold water turns the vapour back into liquid. After the first distillation there are still some undesired compounds, so it must be done at least one more time. This process is usually done at least twice, but sometimes three times. Scotch whisky, for example, is usually distilled twice whereas Irish whisky is distilled three times. As a result, the latter Irish drink is more smooth and light.

After distillation, the spirit is then tested to see whether it’s suitable and does not contain any unhealthy compounds. Once satisfied, the spirit is then placed in casks (oak casks for Scotch) in order to mature for a minimum of three years. When the whisky is moved into a sealed bottle, the maturation process stops.

2)    Choose a category

‘Category’ here could mean a number of things, including age, type, origin or even just taste. Seasoned collectors pick their whisky by combining business-minded logic and happy sentimentality. Whisky from your birth year, for example, could be a fun way to do it. Others choose to opt for buying a whisky from where they’re from. Ultimately, using something to attach to your collection gives you somewhere to start and build upon.

If you’re working with a lower budget, start with bigger names and keep an eye out for distilleries releasing brand new bottles, such as special editions or single casks. Bottles are safer to invest in than casks because they don’t evaporate.

For a collection suitable for drinking and sharing with your friends, you’ll want to look at the ‘sweet spot’, which are generally bottles between 10 and 18 years old. It’s a range that makes for a high-quality whisky but is also usually nicer on the wallet. Trying out different whiskies will allow you to get to know what you like. It’s also worth noting that age doesn’t necessarily indicate quality, so don’t get distracted by it too much. If you find a type you like, assemble your collection around that.

3)    Figure out where to buy from

This can be tricky, as there are hundreds of dealers out there who claim to sell the best whisky, but it’s important to find a reliable seller. One way to do it would be to get to know your local retailer and allow them to talk you through their range and possibly give you some invaluable advice. If you’re looking online, however, you want to find a seller that has been in the industry for a long time. Hard To Find Whisky has thirty years of experience, so are a great option for new collectors.

4)    Learn how to store

Whisky is pretty simple to store, with minimal cost involved and no specialist equipment required. It is more durable than other forms of alcohol too, like wine, which continues to age in bottles. The main storage requirements are keeping it in a dry, dark place at a consistent room temperature away from sunlight. Whisky also needs to be away from vibrations or water damage. A standard basement is usually adequate. If you want to make sure you’re covered in case of the worst happening, you can opt to insure your whisky collection.

5)    Understand the risks and rewards

The demand for whisky has risen considerably, with The Wealth Report claiming that “the value of whisky has increased by 564% in the 10 years to the end of 2019”. This is while “the value of cars rose 194%, art by 141% and wine by 120% during the same period”.

The current state of affairs in the financial market is volatile, and intangible assets like stocks are hard to predict. As a result, many investors have started to diversify their assets, namely by investing in tangible ones instead. Whisky is a tangible asset because it is a physical product: it exists on a physical, not conceptual, basis. Other tangible assets include classic cars, property, and land.

Investing in whisky is not risk-free, however. Although you do not need to be an expert to take care of your whisky, it is wise to take advice from those with experience. As touched upon, storing it is relatively easy but it should be noted that whisky is a liquid that evaporates more and more every year in casks, so getting your timing right on how long to keep it will take a bit of expertise. Once the whisky is bottled it does not age, however, so there is far less risk there. Overall, whisky has proven to be a shrewd purchase for passionate collectors and opportunistic investors alike.