When it comes to collecting alcohol, fine wine has long been the asset of choice. Not only can wine accrue huge value over time as it ages, but it’s less susceptible to market conditions than more financially-based assets like stocks and shares. However, this also applies to other types of alcohol and the value of fine spirits in particular is becoming increasingly competitive with the most coveted wines.

As a result, more people than ever are turning to spirits instead of fine wine when building their portfolios.

Spirits investing and collecting
photo credit: Isabella Mendes / Pexels

The value of spirits is going from strength to strength

While the fine wine industry has struggled in recent years, particularly in 2020, fine spirits have been in continuously rude health. The whisky industry, for instance, has enjoyed phenomenal growth over the last decade. According to The Wealth Report from Knight Frank, the value of whisky rose by a remarkable 564% in this period, significantly higher than the growth of wine (120%), as well as cars (194%) and art (141%).

American whisky has performed particularly well, with the sector growing by 10.8% in 2019 to be worth $4 billion. Hard to Find Whisky notes that American whisky is set apart by its spice, sweetness and colour, which comes about from the use of mashbills (a combination of different cereals, such as corn, rye, wheat and maize) and brand new oak casks.

The story is similar for other spirits. Rum, for example, was described by MoneyWeek as “being taken seriously by collectors” and saw its high-end market value grow by 28% in the five years leading up to 2019. Similarly, the tequila market increased by 22% since 2014, enjoying impressive sales in the US. The global volume of gin also grew by 10.7% in value in 2019, making it the second-fastest growing spirits market in 2019, after non‐alcoholic spirits.

Spirits are easier and cheaper to store

One of the main disadvantages of collecting wine is how difficult and expensive it can be to store. Wine bottles need to be kept in very specific conditions in order for the delicate ageing process to continue smoothly. Any errors, from keeping it at the wrong angle, close to vibrations, at the incorrect temperature, or in direct sunlight, could cause it to spoil.

As a result, many collectors have to purchase a dedicated cooler or even pay for a wine storage business to prevent it from ruining. On the contrary, spirits don’t age in the bottle, meaning collectors have a much easier time of things. All they need to do is put their spirits somewhere dark and cool, and they will retain their flavour.

Whisky casks

The spirits sector isn’t as affected by fraud

An unfortunate reality of the fine wine market is that it’s beset with issues of forgery, and counterfeit wine is a multi-billion dollar industry. While the spirits sector certainly isn’t free of these problems itself, there are many measures in place to prevent fake bottles permeating the market. For instance, every cask of Scotch must by law be held in a government bonded warehouse, and is meticulously tracked from the moment it’s distilled.

Similarly, the Mexican government has imposed strict laws around tequila production in the handful of states which are legally allowed to make the drink, including its ABV percentage and agave makeup. Those who adhere to these rules receive authentication by the Tequila Regulatory Council and get to put a NOM number (Norma Oficial Mexicana) on each bottle’s label identifying the distillery. By contrast, because wine is so widely produced, it’s often much harder to track its provenance in the way that you can with many other alcoholic beverages.

In short, there are more protective measures available to ensure authenticity when collecting spirits.