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American whiskey; an exciting investment?

Well, we certainly think so. Our portfolio of casks for investment is predominantly made up of American whiskey distilleries. We occasionally have casks from Scotland, but American whiskey and bourbon is where most of our available stock is from.

We have fostered great relationships with several distilleries, including Bardstown Bourbon, Dueling Grounds, and Kings County Distillery, to name just three.

So why should you be interested in American whiskey?

There could be many reasons ranging from personal to business requirements (see this blog article for more information. Interested in buying a whiskey cask... - Barrel Global ), and of course, you may be interested in an alternative way of growing personal funds.

The American bourbon industry has seen fantastic growth in the last 10 – 15 years; however, since the COVID-19 pandemic, that growth has slowed. Supply chain issues affected many, and of course, outlets selling whiskies and bourbons were also significantly affected by the pandemic. People were unable to spend money in venues, which led to some having to close down; and while there may have felt like a bit of a whiskey revolution happened between 2019 and 2023 with more people taking part in online tastings and spending a little more having spirits delivered to homes, it was just a temporary situation.

The industry continues to rebound from global inflation and the pandemic. In 2022 – 2023 the sales of nine-litre cases increased to 55.6m (up 4.5%), yet projections for 2024 are showing an increase of sub-4 % to 57.8m. With a lot of global financial recovery and potential tariffs on exporting whiskey stock to the EU (possible tariff of 50%!), growth will continue to be slower than it has been.

Of course! Even with this slowing in growth, those within the industry are positive about the future. There is a recognition that whiskey is reaching a wider audience globally, and American whiskey can take advantage of this. Susan Wahl, Vice President Heaven Hill, recognizes this and says, "If American whiskey can take some of that market share, then we have an opportunity to even more rapidly expand production and reach.

There is also a second potential problem heading towards the bourbon industry, and that is a barrel shortage. With the number of distilleries growing in the United States, so does the need for new white oak to store the spirit. With a shortage of oak on the horizon, some distilleries may turn to making single malt whiskey, which is subject to different barrel regulations than bourbon, which is legally required to be stored in new oak barrels. It could also lead to changing legislation around making and storing whiskey to accommodate this shortage.

While these issues may seem problematic at first glance, it also means the industry will look at opportunities to innovate and stretch itself. The "Ready to Drink “(RTD) drinks market is taking off. Grabbing some ready-mixed whiskey/bourbon cocktails or spirit and mixer drinks off the shelf for a picnic may be a convenient option for some. Leading the way on this is Jack Daniels, who is working with Coca-Cola. By being innovators and looking for ways to reach a wider audience, Jack Daniels, along with Heaven Hill and Jim Beam, is also releasing more premium level products to the market, with a nod to those who prefer an older age statemented whiskey.

Today's bourbon consumers are no longer happy with just drinking. They are curious about the process; they are more knowledgeable about how whiskey and bourbon are produced. They care about a company's impact on the environment, and they care about image. If distilleries can tap into this consumer, the prospects for the industry are wide-ranging and positive.

An example of this recognition of change is evident from brands like Bardstown Bourbon Company. In October 2023, the company announced a new venture – Whiskey House of Kentucky- a US $350 million distillery designed to provide large-scale, flexible contract distilling. David Mandell, CEO, says, “Despite the short-term slowdown following the pandemic, the American whiskey market’s fundamentals are strong […] (we) see tremendous room for innovation and growth.”

A report from "The Spirits Business" recognizes Bardstown Bourbon Company as one to watch in 2024. Along with many other brands, we are pleased to collaborate with them. Not only is Bardstown doing great work with contract distilling, but they also offer blending, cask-finishing, and their own line of whiskeys.

So, while there is a temporary slowing down in the growth of the market, it is plain to see that companies are reacting positively by pivoting their products to adapt to the changing market. We see these as exciting times and an excellent point to become involved in the whiskey/bourbon industry.

We are on a mission to make whiskey barrel ownership accessible to collectors worldwide. As the first-ever global marketplace for whiskey barrels, you can connect with distilleries and collectors worldwide to build your own portfolio. For a whiskey experience unlike any other, request access today.

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