THE value of Scotch whisky casks as an investment has been underlined by a new report which declares it continues to outperform other asset classes such as gold.

The market for whisky casks observed average projected growth of 14.95 per cent in 2022, an increase of 1.7% on the year before, according to the 2022 Whisky Cask Market Report.

The figures are published today by financial adviser Braeburn Whisky in its BC20 Whisky Cask Index, which analyses data of cask valuations by region. Braeburn employs a specially created algorithm that allows it to predict how a specific cask of single malt will appreciate on an annual basis. The value of the index increased by 15.86% last year.

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The report highlighted Laphroaig as the best-performing Scotch whisky cask distillery of 2022 projected growth of 18.75%, followed by casks of Bunnahabhain’s Staoisha in second at 17.74% and Bunnahabhain itself in third at 17.57%. Highland Park showed the biggest growth outside of Islay at 17%.

Braeburn notes that its report shows that investment in whisky casks can be used as a hedge against inflation and wider economic uncertainty.

It pointed to the current buoyancy of the Scotch whisky category, with recently published figures showing the value of annual exports had exceeded £6 billion for the first time in 2022. Distillers have benefited from the removal of import tariffs on single malt Scotch whisky in the US and there are hopes that freer access can be secured to the much-coveted Indian market, the adviser added.

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Niall Brown, chief executive officer of Braeburn Whisky, said: “Our report shows, despite a year in which inflation has rocketed and global markets suffered instability due to the ongoing issues with Covid and the Ukraine conflict, the overall performance of the cask investment market remains in rude health.”

The index is based on a data-modelling algorithm which, according to Braemar, provides a specific and transparent way of using data to quantify cask investment returns and compare investment performance with other assets. The algorithm, calculated using a matrix of real and estimated data points for different distilleries, predicts how a specific cask of Scotch whisky will appreciate on an annual basis; it also back-checks those predictions.

The report’s average annual capital growth rate was based on data points from the sales of more than 6,000 casks across over 80 distilleries, which Braemar says provides the largest data sample available of the cask investment market to date.

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Mr Brown said: “While gold dropped and markets generally finished around the same mark as the year before, the value of the BC20 index rose by double digits. It shows more investors are turning to Scotch whisky as a means of not only growing but also protecting wealth in these times of high inflation and market instability.

“But as this interest grows, so does the need for reliable and transparent data that provides real insight into this expanding market. That is why our report, our BC20 Index, and the algorithm behind it, are vital and reliable methods of measuring year-by-year the fluctuations, intricacies and changing trends in a market that is ripe for opportunity.

“Not only that, it brings a real analysis of what for many is an investment from the heart. Millions of people love whisky, and the history that surrounds Scotland’s national drink. They are drawn by the romance of owning a cask from distilleries known the world over, watching their investment mature, just as the whisky does as it interacts with the wood of the cask.

“Our report once again shows how Scotch whisky is providing a really effective way for investors to diversify their portfolios towards safer ground, hedging against the inflation and uncertainty that are currently affecting global markets.”

According to the report, Europe accounted for the highest volume of cask investment, at 74.78%, with the UK the largest market with 74.34% of the total share, followed by Asia at 18.35%.

The number of millennials and Generation Z investors rose to 36.49% of total cask buyers, while more women were also investing in casks, at 7.14% of the total, the report added.