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Liquid Insights: Whisky 101

Liquid Insights: Whisky 101
August 17, 2021
Bradley Calleja

The Macallan

Tucked in the rolling hills of the Scottish Highlands sits an estate that has dramatically established itself as a leader both in the glass and at the auction house. The Scottish Highlands are to whisky what Bordeaux is to red wines. The region is the largest whisky-producing area in the country and is dotted with over 40 different distillers. The Macallan distillery stretches across 390 acres of farmland which curates the waving barley used as the base for their prized liquors.

In 2018, The Macallan officially opened a new distillery in Scotland's Speyside region that took six years of planning and $186 million to complete. The 370-acre estate showcases a unique architectural design that is built into the hillside and has 95% of its energy powered via renewable resources.

Credit: The Macallan

Whisky as an Asset

Whisky has established itself as a historically strong alternative investment proposition with a combination of impressive returns and increased liquidity. Over the last 10 years, whisky has out-performed all other alternative assets tracked by Knight Frank with a total ROI that exceeds 550%. Rarity equals returns in the world of whisky and The Macallan has proven that a rare product can become a home run on the secondary market. In 2019, a bottle of The Macallan 1926, which came from a production run of only 24 total bottles, sold for £1.5 million. According to Facts & Factors, the global whisky market is estimated at $61.7 billion and is expected to surpass $95.9 billion by 2026. The estimated annual growth rate through 2026 is 6.5% but liquor from top producers such as The Macallan are expected to present opportunities for outperformance.

Data: Knight Frank

The Macallan Index which is tracked by Rare Whisky 101 has gained 268% since its inception in 2012. The index soared between 2012-2018, returning 231% in less than six yers. Although the index provided modest gains from 2018-2021, a recent resurgence has pushed the index to gains of 22.5% over the last year and 14.78% returns over the past six month. The recent surge has propelled Macallan to capture command over the overall collectible whisky market with a 39.5% market share- representing a share that is nearly 30% higher than any other brand.

Credit: Rare Whisky 101

In 2018, The Single Malt Fund was launched by Swedish entrepreneur and whisky connoisseur, Christian Svantesson. This was the world's first regulated whisky fund and the offering has frequently included Macallan whisky in their portfolio. In 2019, the fund announced it had raised $26.6 million with a targeted return of 10% per year and a liquidation schedule of six years. The fund has a steep minimum investment of $100,000 and until this week, no whisky has been offered by a United States-based Reg A platform. In the United States, the investment adviser Wave Financial offers a Kentucky Bourbon fund to accredited investors with an investment minimum of $1,000. Vint's offering is the first to provide an opportunity in whisky that does not carry an investment minimum or require investors to hold accredited status.

The Offering

The Macallan 1976

The Macallan 1976 is a 29-year edition from their Fine and Rare Collection. This Scottish whisky boasts a sipping strength of 45.5% ABV and was distilled in The Macallan’s renowned sherry casks. The Macallan has long promoted their offerings of Sherry Oak single malt whisky that are matured in Oloroso sherry casks. To guarantee quality, The Macallan controls a warehouse in Spain that produces sherry casks and imports roughly 80% of all first fill sherry casks that are used in Scotland. These casks help promote flavors of vanilla with an infusion of spices that is calmed by a smooth nuttiness. The 1976 vintage finished its maturing in 2006 with a total production run of 620 bottles.

Credit: The Macallan

The Macallan 1978

The Macallan’s 1978 edition offers a significant level of scarcity compared to the 1976 version as only 243 bottles were ever produced. Not only was the total production low, but the United States was initially only allocated five bottles with an opening price of $11,700. Flavors featured in this stock include crisp orange notes that are balanced by ginger and oak. The vintage matured in American oak which is known to provide liquor with a brighter, lighter glow versus offerings casked in European oak. The 1978 vintage also packs a punch with an ABV of 59.2% and like all Fine and Rare whisky produced by The Macallan, is a single-malt variety. Single malt is a production method that uses malted barley that is the product of one distillery while blended whisky can be a combination of barley and other grains.

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