Professional Documents
Culture Documents
CLUB
INDEX
The Market 16
Past 16
Present 19
Future 22
Call Now 37
FAQ’s 38
2 3
Acquiring aging barrels of Whiskey is a satisfying
mix of risk and reward. With investors seeing
returns of 10-20% per annum, it’s difficult to find
(with traditional styles of investing) solid returns
like these without taking on greater risk.
4 5
THE
PROTECTS WHISKEY
YOUR INDUSTRY’S
DOWNSIDE GREATEST
PROBLEM
Unlike most commodities, Whiskey increases
in quality and value as it grows old. It’s also a
major exported product, where demand greatly
Because Whiskey, by law, must be of a certain
outstrips supply. The Irish variety is the fastest
age before it’s sold — and even older to be
growing brown spirit in the world. The Whiskey
considered a desirably smooth product —
industry in Ireland is set to soar above €1 billion
Whiskey producers must maintain large stocks
euros per annum — and doubling again by
inside warehouses, waiting five or more years
2030! There simply isn’t enough mature Irish
for it to mature before it’s ready to pay the bills.
Whiskey available to supply the market today
This is the way the industry’s run for centuries.
— certainly not in 5- or 10-years’ time.
6 7
MODEL
TWO
MODEL While some Whiskey producers have enough personal capital where it doesn’t
require bank financing, they are still business savvy and would opt to cover all
ONE running costs over that 5 year period if they could. Some produce a Gin or
Vodka which can be sold right away to bring in cash flow. Some even produce
craft beer for the same reason. Whiskey distilling takes time to turn a profit!
There is another strategy some of in place and have the resources and
BORROW CAPITAL FROM A BANK... the savvy distilleries like. They enter clients to allow them to buy the said
...such as Royal Bank of Scotland. into a contract to sell a percentage percentage of production at ultra
of their production to a whiskey wholesale rates. We put a fair market
Some Whiskey producers do not like this
broker/bonder such as Whiskey & margin on top and offer these cask
option due to volatile borrowing rates, and
Wealth Club. Using say 25% of their of whiskey to private collectors
global crises which cause banks to make rash
production as an example. They can and investors. It’s a very interesting
decisions.
lay down 75% of their production strategy to buy whiskey cheap. Sit
A third reason producers dislike this model is for the 5 year maturation period to on it for a few years and sell at such a
that bankers can call in the debt at any time — be later used in their own bottling, time it becomes more valuable.
sometimes forcing a Whiskey producer to sell While simultaneously selling the
everything to pay the debt, possibly shutting other 25% right off the still (the day Even owners of grocery stores, hotel
them down or pushing them into bankruptcy. its made) to The Whiskey & Wealth and pub chains love this option. They
Club. This gives them instant cash can buy whiskey while its cheap, and
Some investors assume bank-lending is the flow to cover all the day to day then bottle and label it in their own
most logical option until they fully understand running costs of a distillery. Whiskey brand in 3-5 years time for less than
the risks at play. But if bank-lending was always & Wealth Club are fortunate to be in they pay for the mainstream Irish
the best answer, investors wouldn’t exist. the position to have such contracts Whiskey brands.
8 9
HOW IT WORKS
THE CASK INVESTMENT CYCLE LOOKS LIKE THIS
4: AGED VALUE
In 5 years’ time (after deducting “the angels’ share”
— a maximum 2% per annum rate of evaporation)
you will have roughly 385-410 70cl bottles of Irish
1: PRODUCTION
Whiskey (46% ABV) per cask owned. If we assume
The Whiskey is made and produced at our
the lower amount (385 bottles) and divide that
whiskey experts, carefully selected pick of
Irelands best distilleries.— So you can be certain of by your total costs across five years, the cost per
consistent, premium spirit in every cask. We hand bottle is little more than €6! In contrast, some
select and source the very best oak casks (with full 5-year-old Irish Whiskey is currently selling retail in
traceability) to ensure the right type of maturation. 2019 for €80 a bottle. Should you wish to continue
the aging process — increasing the value of your
investment — additional years for storage and
insurance are only €50/year (per cask).
2: ULTRA-WHOLESALE
We buy this Whiskey in bulk, at heavily discounted, ultra-
wholesale rates based on economies of scale and long-standing
agreements with this distillery. We organize insurance and
storage in a bonded warehouse geographically suited to the
style of whiskey. This ensures we give the whiskey the right 5: EXIT STRATEGIES
conditions to mature into a premium investment grade whiskey.
If you wish, you can exit the investment at any stage. While
Whiskey certainly increases in value and desirability each year,
there will always be a market for Whiskey of any age. Considering
the high growth seen in this market during the previous two
decades, we feel there will certainly be a huge demand in
Ireland for your premium mature Whiskey. And the longer you
3: WHOLESALE INVESTMENT OPPORTUNITY wait to age the Whiskey, the more sought after and valuable
This is where you come in. Each cask is offered at a very affordable it will become. This is the type of investment you can sit on —
wholesale rate starting at just €2,550. Our price covers the cost relax and let it age until you need the capital. Some investors
of the 200-liter oak cask, It also includes the 200 liters of Whiskey purchase a cask for each grandchild so that when they come
inside the cask, plus storage and insurance for 5 years. The Whiskey’s of age in 20-30 years, the casks value can be redeemed and put
title and ownership is given to you, making it an asset-backed towards a prominent family investment such as a family home.
investment while also giving you the freedom to sell at any time.
10 11
EXIT STRATEGIES
ARE PLENTIFUL
As Whiskey brokers that deal with the private label market, we have whiskey
buying options coming across our table on a weekly basis. Some for large
volumes and some for smaller stuff. Whiskey is a consumable product,
meaning as we sell whiskey and it›s consumed, we have to fulfill more
orders. So in 3- 5 years time, or whenever you decide to exit the ownership
in the whiskey. Speak to us and see what options we have available.
Here are some example options we have available at the time of printing
this brochure in early 2019.
12 13
WHY IRISH WHISKEY?
DON’T SLEEP
ON THE IRISH.
14 15
Other issues around this period such as
the famine where Ireland lost nearly 50%
of its population, along with the Irish
Independence War with Great Britain which
caused a trade war and subsequently resulted
in Great Britain placing a trade embargo
on Ireland’s exports to all Commonwealth
Countries (Ireland’s biggest trade partner).
16 17
In 1988, French giant Pernod Ricard million. Bacardi then bought into a
bought Irish Distillers and all the brands Dublin based Distillery. Jack Daniels’
In 2012, Jim Beam Suntory bought their heads as huge markets for the
Cooley Distillery for a reported €73 future yet virtually untapped at present
18 19
There are four forces driving the Whiskey
market growth:
4.
€2.4 billion invested by Pernod Ricard
into production and global advertising
of Irish Whiskey — along with over €1
billion committed from the Irish Whiskey
Association
20 21
Today, Japanese Whiskey sells for €100 a bottle,
compared to Scotch and American Whiskey
selling at €20, and Irish Whiskey which sells at €40.
Even more compelling is how Japanese law allows
purchasing of Irish or Scotch Whisky to blend in
with Japanese Whiskey! Whereas the Irish cannot
buy from Scotland, America or Japan to help meet
their demand, as Irish law only allows Whiskey
made in Ireland to be sold as such.
22 23
WHISKEY V S W I N E
WHISKEY
VS. OTHER
INVESTMENTS
24 25
What does wine require to develop into a Let’s say you want to produce a cost-effective
valuable commodity? More than anything, it (“cheap”) Whiskey. You might use cheaper
takes a season of near-perfect weather. You ingredients, and buy a used barrel that’s stored
must account for many factors, including Whiskey or another spirit five times before —
this is called a 4th-fill barrel. The wood in this
the winemaker, the terroir, the amount of
barrel has little left to give, as all the color and
tannins in the bottle, the aging process,
flavor has been extracted over the years by the
the supply, the demand, the vineyard’s
previous spirits. Now, to buy an older barrel is
reputation, the branding, and more. Yet,
roughly 10 times cheaper than buying a virgin
the main drawback of investing in wine is
(or 1st-fill) barrel, and the finished product
the way it continues to age inside the bottle which comes from this old barrel can legally
— leaving it vulnerable to spoilage. As Ian be sold as Irish Whiskey. The product, however,
McClune said, Whiskey doesn’t evolve or will not be very desirable. It will have a harsh
age while in the bottle, so the lifespan, as an alcoholic taste, much like it had when it came
investment, is far greater. off the stills. Combining quality wood and
ample time is key to making a smooth and
Did you know you can take two lots of the valuable Whiskey.
exact same Whiskey f rom the exact same
A final comparison might look at the supply and
batch and put them in two different barrels
demand of each product. In the wine-making
and receive a vastly different product in 3
industry, there is a lot of competition, with
years? While quality ingredients and proper
over 1 million commercial wineries around the
distillation are important keys in Whiskey
world (more than 5 million when you include
production. Another key secret is in the
smaller family-run operations). So, supply
bonding process. If you invest in new 1st f ill outstrips demand in a big way! Distilleries, on
oak barrels and allow ample time to age, the other hand, are less than 1,000 globally —
you can create a safe, long-term strategy with less than 20 in Ireland. So, demand in this
that aims for both value and quality. industry far outstrips supply.
26 27
FTSE VS
IRISH WHISKEY Yet with Irish Whiskey, a €2,550 CASH IN THE BANK
investment today in a single cask of
To put this f igure into some kind
whiskey can (based on recent sales
of perspective, data scrutineer
f rom 2017), in just 24 years, command
Moneyfacts calculates that had
a staggering €163,636. This is based
you left £2,550 in the average easy
off a recent €450,000 sale for a single
access savings account over the
Port Pipe cask of Potstill Irish Whiskey same period it would now be worth
f rom Co Cork. A Port Pipe is roughly £8,670. However with inflation at 3.4%
550 liters whereas our casks are 200 per annum according to the bank
According to Sally Hamilton for The Mail liters. We’ve even seen 15-year-old of England, leaving your cash in the
On Sunday, The FTSE is, in effect, a weather Co. Cork Potstill Whiskey (200liter) bank over that period of time, you
vane for business, responding to political, selling for similar prices at the would have gone backward.
economic and global events. But on closer €160,000 mark. Drastically different
Disclaimer: Past sale prices are no guarantee
inspection, it is not a good measure of the
than waiting 35 years for 4 times less. for future sale prices.
long- term investment gains earned by
investors.
28 29
LONDON fastest annual rate since the depths of the
financial crisis according to the Office For
Real estate is traditionally considered a smart anywhere close to what they can make selling a
long-term investment, but still has its issues 3-5-year-old blended Johnny Walker Red in bulk.
many investors do not properly calculate into The ability or willingness to maintain supply at
the returns. If you’re purchasing property for the mature end of the Whiskey market is dry.
investment purposes, you must account for
Even 3-year-old Whiskey is of more value
maintenance costs, tenant issues, property
than most Whiskey made today. Today’s batch
manager’s fee’s, multiple insurances and more
of Whiskey can’t legally be sold as “Whiskey”
— costs which reduce rental income in most
cases to less than 3% per annum. When looking until it’s been aged in wood for 3 years + 1 day.
at appreciation, it a good steady market it may Owning a supply of aged Whiskey (even 3
average out to 7% per annum. Of course, this years old) is highly valuable to brands looking to
depends upon the supply and demand of each buy to meet global demand, such as new
market. More immigration to a market can distilleries or producers who are waiting for
inflate demand, whereas a halt on population their supply to mature. Ireland alone has 18 new
growth like we›re set to witness with Brexit distilleries planned over the next decade. This
can dramatically stunt the Real Estate market. moment is a rare time in history to be involved
House prices in London for 2017 fell at the in such a market
30 31
THE WHISKEY
TOUR EXPERIENCE
Imagine a tax-deductible trip to rural Ireland to
see a commercial distillery behind-the-scenes.
A beautiful drive out towards the countryside to
visit one of Ireland’s largest distilleries. See the
trucks of grain and malt unloading, the ancient
methods of making Whiskey paired with the
convenience of modern technology, ensuring
ultimate consistency.
32 33
THE LONG
As reported by Scotchwhisky.com, Our Founders parents love to rave
TERM we’ve seen recorded sales of Irish Pot about how they bought a house 45
still whiskey selling for very healthy years ago for £9,000 and today it›s
STRATEGY sums from back in 2017 when they worth £245,000. Yet, when you add
went on sale. in ongoing costs like homeowner›s
<cuadrado> A 12-year-old cask selling for €75,000 insurance, property tax, 45 years worth
Assuming you kept 10 casks and €2,550 for 200 liters, you can quickly do
Assuming you have time on your hands, are achieved a similar price of €160,000 at the math on Real Estate vs Whiskey.
planning your retirement or if you wish to leave 15 years, your remaining 10 casks would
a legacy for your grandchildren, or perhaps a
be worth €1.6million
favorite charity, a longer-term strategy might DON’T FORGET INFLATION
interest you. Assuming you invest in what we The price at this age is so high due
Based on 3.4% inflation, what is
call a single unit. Which is 10 pallets. With 6 casks to 98% of whiskey being sold at a
€330,000 today in 2019, would actually
per pallet, this equates to 60 casks. Hold all 60 younger age. Given the limited quantity
be €1,008,291.64 in 33 years. You see, a
casks for 5 years. Then release 50 with the aim of such a rare Whiskey, the auction
to recoup the entire investment plus a healthy cask of Whiskey 33 years ago was not
houses will go crazy to get their hands
return on investment (ROI) across all 60 casks. €2,550 like it is today — it was more
on such cask.
like €650 ¬— A truly exciting opportunity
With the remaining 10 casks, opt to hold them And this doesn’t even consider for the far-sighted investor, yet still
for another 10 years or longer in the bonded inflation. This is based off today’s incredibly appetizing for the short-
warehouse. Maybe you put them into your selling prices— not what such a term players too.
children’s name, keep them for the golden years
Whiskey will be worth 15-35 years into
of retirement, put them into your grandchildren’s VERY IMPORTANT: We do not sell
the future as prices inevitably increase
name or even your favorite charity to leave a single casks of Whiskey. We have a
with the 3.4% standard inflation.
lasting legacy.
€2,550 investment with the potential minimum purchase order. Please speak
to yield €160,000 in 15 years looks an to our team to see stocks available and
exciting opportunity. volumes we can sell.
34 35
LONDON
020 3129 1639
WE ARE
CALL NOW
HERE
TO HELP
36 37
HOW DO I KNOW I HAVE WHAT IF THERE IS A FIRE
GENUINE OWNERSHIP? OR THEFT?
This is highly unlikely given the people fire regulated and have sprinkler
The insurance company we use is Aviva plc.
and the capital where your Whiskey will systems installed. There are millions
With over 33 million customers, operating in of euros in stock sitting in these
be stored. However, in such an unlikely
16 countries and close to £50billion in annual event, you can simply move your casks warehouses
revenue, they are one of the worlds largest and to any other bonded warehouse facility
in Ireland, of which there are many. And
most trusted insurance companies
increasingly more are coming online
as the Whiskey market continues a
resurgence to its former glory
38 39
W H I S K E Y & W E A LT H
CLUB
LONDON DUBLIN
1 Fore Street Ave, London, 20 Harcourt St, Dublin2,
EC2 9DT, UK Rep Of Ireland
T: 020 3129 1639 T: 01 4378535
www.whiskeyhealthclub.com
invest@whiskeywealthclub.com