This is the new Balvenie
50-year-old, which carries a price tag of £25,000 ($40,800) a bottle.
Which means that the single dram I am holding is worth about £830
($1,350)
.
Slowly, I raise it to my lips.
I am standing in the whisky room at the luxurious Cromlix hotel
in Dunblaine, Scotland -- which incidentally is owned by local boy
tennis star Andy Murray -- along with a select group of journalists.
We
have been invited to the exclusive launch of the new 50-year-old, which
is only the fourth time the distillery has released a whisky of this
age.
A Lalique master craftsman working on The Macallan 64 year old, auctioned for $460,000
"A
50-year-old Macallan featured in (the film) Skyfall, but whiskies of
this age are extremely unusual," says Sam Simmons, global brand
ambassador for The Balvenie, who is introducing us to the latest
release.
"Nobody 50 years ago knew that
people would care about Scotch the way they do in 2014. Nobody planned
to leave this whisky for so long. Its existence is a bit of a miracle."
We
tilt our glasses. The butter-colored liquid is rich with notes of
cloves, summer flowers, dried fruits and marzipan, underpinned by the
woody polish of an old gymnasium.
"It tastes like soap," somebody says.
"You've eaten soap?" Simmons replies.
There is a pause.
"It reminds me of the inside of a grand piano," ventures someone else.
"Whisky
of this age has a natural alcohol level of below 50%," Simmons
explains. "That's when very unpredictable chemical reactions happen
between the spirit and the wood. That's the magic time. It creates
whisky that is unique, quirky and unpredictable."
Whisky collectors are making big money
As
extraordinary as this whisky is -- it is exceptionally long, with
flavor lingering for several minutes after each sip -- one question is
in the back of everyone's mind. Who would pay £25,000 for a bottle of
whisky?
The answer is people like
Mahesh Patel, a whisky collector and building tycoon from Atlanta,
Georgia, who once bought a Dalmore Trinitas 64-year-old for £100,000
($166,000).
"I have about 5,000
bottles, including a lot of old, one-off, high-end whiskies," he says.
"Over the years, I've spent about $2 million on it. The collection is
worth about $6 million now. I keep it at different locations all over
the world, for security reasons."
Patel
is one of a breed of whisky collectors that have found that their
passion for the drink has led to great financial gains. Distilleries
first hit on the idea of limited editions and special releases in the
early Nineties, such as the famous Black Bowmore that came in a wooden
presentation case.
Collectors like
Patel bought the bottles largely for the love of them. But over the
decades, their value started to appreciate to the extent that unusual
bottles started to be seen as cash cows.
Fast-forward
to 2014, and the market is booming. According to the Investment Grade
Scotch index that is compiled by UK-based Whisky Highland, the top 100
whiskies appreciated by an average of 440% in the last six years.
Last
month, a 50-year-old bottle of Japanese Yamazaki single malt sold for
£20,000 ($33,000). In January, Sotheby's sold a six-liter decanter of
Macallan M for £387,000 ($631,000).
These
transactions are becoming relatively frequent, if not commonplace.
Indeed, Whisky Highland expect 30,000 bottles to be sold at auction this
year, a 50% increase on the 20,211 that were sold in 2013.
By
contrast, the Standard & Poor's 500 stock index increased by 31% in
the same period, and the Live-ex Fine Wine 100 Index dropped by 2%. If
you're a drinks investor with money to spend, it is something of a
no-brainer.
Is whisky for collecting or drinking?
But most people in the whisky world see collecting purely for the sake of investment as something of a taboo.
"You
have to start by drinking the product and enjoying the product," says
Patel. "Buy two bottles, one to drink and one to collect. Otherwise
you're going against the spirit of the industry."
Andy Simpson, the founding director of Whisky Highland, agrees -- but only to a point.
"There
are three types of buyers: drinkers, collectors and investors," he
says. "I know one person, who shall remain nameless, who is teetotal,
and buys whisky only to invest.
"Some
people think that this is a crime and whisky should be set free. But
from my perspective, people can choose how to spend their money. It's
supporting the industry and that's a good thing."
Simpson,
a former corporate banker, is launching a new business called Rare
Whisky 101, which he describes as "consultants, brokers and valuers".
"Whisky
has always been collectable, but there were no market figures before
Whisky Highland came along five years ago," he says. "There were no
indices, charts, graphs, nothing. Rare Whisky 101 will have the world's
largest online database of whisky auction sales, so investors can
accurately follow the market."
This is the latest contribution to the digital revolution that has transformed the secondary whisky market.
Physical
auction houses like Bonhams and Sotherby's have traditionally tended to
charge 25% commission, and hold auctions just a few times a year. By
contrast, sites like Scotch Whisky, Whisky Online, Just Whisky and
Whisky Auctioneer run online auctions regularly, and charge a commission
of just 10%.
"Those sites have added
liquidity into a traditionally illiquid market," says Simpson. "They are
part of the reason why whisky is booming, and the growing value of
whisky is starting to usurp the experience of opening and drinking it."
Whisky investment funds: too good to be true?
The
market is gradually showing signs of maturity. In June, the world's
first whisky investment fund was set up by Rickesh Kishnano, the CEO of
Platinum Wines in Hong Kong; another has been established in Singapore.
But
many seasoned collectors -- who themselves have made millions through
buying and selling whisky -- are skeptical about whisky funds, and
suggest that potential investors tread carefully.
The copper Balvernie whisky stills in Speyside, Scotland
"They
worry me because genuine whisky experts are few and far between, and
there is nobody credible behind these funds," says Sukhinder Singh,
founder of the Whisky Exchange, who boasts a "handsome" private collection of 6,000 bottles that he keeps in his boardroom.
"They
are run by people from the wine industry, but you need a lot of
knowledge specifically about whisky to make good investments. It's not
about just buying old whisky. I've been collecting for 30 years and I
know everyone who is good. How many whiskies have these guys tried?
Fifty? A hundred? That's not enough."
There
are lots of hidden pitfalls, he says. For example, if you invest in a
whisky that is not "amazing to drink", demand may remain low even if it
is a limited edition. And while some bottles go up, it is common for
others to lose value.
For example, the Royal Wedding limited edition Macallan whisky,
which marked the marriage between the Duke and Duchess of Cambridge in
2011, rose from £150 to £1,650 by 2013. These days, however, after the
distillery lost many fans by removing age statements from its bottles,
it has depreciated to about £900.
By contrast, however, the iconic Macallan Private Eye whisky,
which was released in 1996 to mark the 35th anniversary of the British
satirical magazine, has appreciated from £35 to about £1,500, and shows
no sign of falling from grace.
Telling the difference between these two whiskies requires significant expertise.
The importance of loving your whisky
According
to Singh, when it comes to whisky collecting, there is no substitute
for genuine passion. He still vividly remembers the first bottle in his
collection.
"I
visited a man in Scotland, and noticed a special bottle on his
mantelpiece, with a beautiful, intensely colorful label," he says. "It
was an original bottling from a distillery called Kirkliston, which had
closed in the early 1900s.
"I knew I
had to have it. It took me half an hour to persuade him to sell it to
me, for £700, which was a lot of money at the time. It's worth about
£20,000 now, but I'll never sell it."
What
advice would he offer an aspiring collector or investor? "The whisky
market is on fire at the moment, it really is," he says. "But you can't
become an expert overnight.
"As a rule
of thumb, buy limited edition bottles from iconic distilleries. But most
importantly, learn about whisky, meet the experts and talk to them, and
drink as much as you can."
Back in the
honeyed presence of The Balvenie 50-year-old, Sam Simmons is inclined
to agree. "Ultimately, whisky is about loving the mystery of the drink,
conversation and friendship," he says.
"Whisky is to be drunk and enjoyed. However high the stakes get, you can never lose sight of that."
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