1. The value of luxury is priceless
My first role after graduating was in the gemstone mining industry, where I learnt a great deal about value perception when it comes to luxury goods. I saw how gemstones, which started out as rough pieces worth only £20 or £30 pounds, were crafted into jewellery that ended up selling for thousands.
While many consumers never knew, nor perhaps even considered or cared about the cost of the raw materials in their jewellery, what was clear was the perceived value of those finished luxury items to the individuals.
The whisky market has some similarities to the gemstone industry in this respect. Scotch whisky comprises just three simple, natural ingredients: water, yeast and cereal. Yet rare and premium single malt bottles and matured barrels of Scotch whisky, are highly sought after and command impressive prices.
At this level you are not simply buying a liquid. Like diamonds or other precious stones or metals, the real value of luxury lies in the craftmanship, history and rich heritage, not to mention the alcohol by volume (ABV) and ageing process in the case of barrelled whisky.
2. Trust matures like Scotch whisky
Reputation isn’t established overnight, especially in the luxury sector.
Building trust takes time, rather like whisky cask investments which can take 10+ years to mature for optimum flavour profile, value and therefore return on investment (ROI).
As is often the case in the gemstone industry, people want to see or experience a premium product first hand. Whether that’s feeling the weight of a piece of jewellery or visiting a whisky cask in its natural environment i.e. in a distillery or bonded warehouse in Scotland. That’s why we invite our investors to visit, and even sample, their casks in our Lowland Bond facility in the town of Glenrothes in Fife whenever they wish.
In this business, we also know that people put their trust in people. That’s why we strive to foster personal relationships and rapport with our clients. We are on the journey with our investors. Right from the start of the relationship, we take time to understand their personal circumstances, budget, financial goals and risk appetite to guide them through the whole process.
Nor is trust taken for granted. We always encourage our clients to do their due diligence and seek independent financial advice.
3. Partnerships and events are key
When it comes to marketing luxury products or services, like premium Scotch whisky or cask investment, forming strategic partnerships and sponsoring, or at least attending, the right events is key.
In previous roles I was fortunate to form relationships with influential people that have travelled with me into the cask investment world. Sir Jackie Stewart OBE is one of them. Here at Whisky 1901, we’re delighted to collaborate with him again to support the charity Race Against Dementia founded by the Formula 1 legend and Scotch whisky enthusiast. As part of an event this month we donated a bottle of Edition One of our independent bottling line, The Collection, worth over £1,300 to be part of a silent auction.
Partnerships with purpose are very important to us to ensure we always give back in some way. We’re proud to have helped a number of charities raise funds recently, including Action for Pulmonary Fibrosis and Leuchie House.
Also in the sporting world, earlier this year we secured a sponsorship deal with professional golfer, Ewen Ferguson and partnered with The Game Fair at Blenheim Palace, where we launched the first edition of our single cask bottling line, The Collection. The Game Fair was so successful in connecting us with new and existing cask investors that we’re planning to attend more events next year.
I look forward to sharing three more insights into the whisky cask investment world in my next blog post. These include prioritising quality over quantity interactions with clients and potential investors, being creative in the corporate world, and why it’s important to never stop learning.
**Disclaimer**
Whisky cask investments are unregulated in the UK. The value of investments is variable and can go down as well as up. You have 14 days to change your mind and request a full refund under our cooling-off period. The volume of spirit will decrease over time (known as “the Angels’ share”). “New Make” spirit has to be matured for 3 years, during which time its alcoholic strength could be reduced. However, for the product to be classed as “whisky”, it must retain a minimum strength of 40%.
Fees apply, see terms and conditions for details and terms around exiting your investment. An investor may get back less than the amount invested. Information on past performance, where given, is not necessarily a guide to future performance. The capital invested can fluctuate and the price of casks can go down as well as up and is not guaranteed. The investments and services offered by us may not be suitable for all investors. If you have any doubts as to the merits of an investment, you should seek advice from an independent financial advisor. The Whisky 1901 Ltd sale price includes a discretionary markup to cover the cost of services provided, including but not limited to, storage, movement and maintenance of casks, insurance, front and back-office software.
