The Single Malt Fund Trading Company

9 August, 2021

2021 – Q2 Whisky Investment and Market report

The Rare Whisky Market

Rare Whisky Apex 1000 growing steadily

IndexQTD%YTD% IndexQTD%YTD% 
Apex 10003%9%Glenfiddich-3%-3%
Ardbeg18%19%Glenlivet12%8%
Balvenie9%13%Glenmorangie-4%1%
Bowmore0%-2%Highland Park0%7%
Brora30%36%Lagavulin2%3%
Bruichladdich-4%1%Laphroaig8%6%
Bunnahabhain14%10%Macallan9%9%
Caol Ila0%14%Port Ellen10%9%
Clynelish-1%2%Rosebank2%2%
Dalmore-1%1%Springbank1%10%
Glendronach6%11%Talisker0%10%
Glenfarclas-4%1%   

Source: rarewhisky101.com

After a strong first quarter, when prices grew by 6% versus LY, the market for the top rare whisky bottles, sold at auction in the UK continues to record solid, steady growths. Q2, traditionally sluggish, added another 3% to the top line, bringing the total Apex 1000 index to 9% above last year at the end of the first half.

As has been the case for some time, not all brands are enjoying the same levels of performance. The big winner in Q2 was BRORA, which should come as no surprise, as this Highland distillery, which was mothballed in 1983, reopened its doors in May after a three- year, GBP 35 million restoration by parent company, Diageo. Watch out for the reawakening of that other Diageo sleeping giant, PORT ELLEN, over on Islay, which closed in the same year as Brora and which is also due for reopening in the not-too-distant future. Interest in Port Ellen on the secondary market is already hotting up, with a solid 10% increase in prices so far this year. Elsewhere, ARDBEG, LVMH’s Islay flagship, is in strong demand with an impressive 18% growth in Q2, while BUNNAHABHAIN seems to be enjoying a bit of revival also. Over on Speyside, GLENLIVET is leading the way with double digit growth in Q2. Finally, the giant that is THE MACALLAN is returning to healthy growth after a sluggish end to 2019 and beginning of 2020 and is back on the path to above market growth. +9% in Q2 for a brand that represents approximately one third of all bottles sold on the UK auction market, is impressive indeed.

Yamazaki leads the way with Japanese whisky

IndexQTD% YTD% 
Japanese 1008%8%
Yamazaki12%14%
Karuizawa10%10%

Source: rarewhisky101.com

After a flat Q1, which followed a very strong 19% growth in 2020, the RW Japanese 100, comprised of the most prized Hanyu, Yamazaki and Karuizawa whiskies, picked up again in Q2, with a very impressive 8% increase. Leading the way was YAMAZAKI with 12% growth, only just ahead of the powerhouse KARUIZAWA which delivered solid double-digit growth in Q2. As reported in previous reports, The Single Malt Fund has acquired some very rare bottles of both Yamazaki and Karuizawa, so we are delighted to see interest continuing to rise.

Midleton Very Rare Silent Distillery Release

Over in Ireland, the big news of the quarter, was the launch of the second release of MIDDLETON VERY RARE Silent Distillery Collection. Having achieved €35,000 for a bottle of very rare 45-year-old Irish whiskey, last year, Jameson parent Irish Distillers is now hoping to go one better with this even older, more expensive whiskey. The asking price for the second release in its Midleton Very Rare Silent Distillery Collection is €40,000, which makes it one of the most expensive Irish whiskies to ever go on sale. The collection is believed to be the oldest liquid in Ireland, with six releases planned between 2020 and 2025, ranging in age from 45 to 50 years old.

We are delighted to announce that The Single Malt Fund managed to secure one of only 14 bottles sold in Ireland and one of only 70 bottles released worldwide. Look out for this amazing product on www.thesinglemaltshop.com

Industry Update

  • Edrington reports tough year
    After 10 years of very impressive results, Edrington reported a 15% drop in Revenue and a 21% decline in profits before tax for the full year April 2020 to March 2021. Not surprisingly, Covid and US tariffs we the main reasons for these tough results. The silver lining for The Macallan were some positive news coming out of China, SE Asia and Russia.  
  • William Grant Trends report 2021

Every year for the past 10 years, William Grant’s UK division has been publishing a trendreport. Below are some highlights from a very interesting read, which can be found here. https://www.williamgrant.com/trending/trending_2021_report.pdf

“According to McKinsey, the astonishing growth in e-commerce during the few months of lock-down has reached levels that were expected to take 10 years pre-COVID-19. +10.3BN EXPECTED IN RETAIL E-COMMERCE FOR WESTERN EUROPE VS PRE-COVID 2020 FORECASTS”

“Whisky is seeing growing interest from a new generation of millennial drinkers who are helping to transform the scene, making it more global, more diverse, and enjoyed by younger people. In addition, the new age Whisky consumer also includes more female drinkers, as attitudes to the category shift, and people become more exploratory. These dynamics are ensuring Whisky is becoming an increasingly exciting category to navigate and engage with.”

“Peated Scotch Whisky has seen growing interest, up +5% in the Off Trade, driven by brands such as Laphroaig, Bunnahabhain and Ardbeg.”

“There has also been a recent focus on small production runs and scarcity. At the very top end there are many examples of Whisky variants that are only produced in a small quantity, targeting connoisseurs, fanatics and collectors.”

“Imported Whiskies play a big role in social occasions, with both American and Irish over-indexing on social sharing missions.”

“Malt Whisky over-indexes on ‘treat/reward’ and ‘have time for myself’ as consumers increasingly look to indulge themselves with premium treats. For Malt Whisky shoppers, looking ‘premium’ is a product trigger for 25% of Single Malt purchases, and is likely why Single Malt Scotch’s second mission is Gifting, as one in five purchases of Single Malt are as a present.”

“There is also a big opportunity for Whisky to capitalize on the growth of e-commerce. With consumers less willing to spend time in-store, an opportunity for online platforms rises.”

All the above makes us confident that The Single Malt fund is operating in the right space.

TSMF Activities in Q2 2021

  • Launch of www.thesinglemaltshop.com
    The highlight of Q2 was that we launched our web shop, www.thesinglemaltshop.com. The site is the fund’s primary way to realize its investments. As we are an actively managed fund, we will keep investing/buying great whiskies, and keep realizing/selling, and then reinvest.

We believe we can play a major and important role in the world of rare and limited whiskies, being one of the top go-to places for collectors, investors and whisky-lovers looking for their favourite whisky. As a regulated fund, everything we do is and has to be 100% compliant. We have therefor spent considerable efforts to make sure we handle the complex sales and distribution within the EU correctly. We have set up (or are in the process of) tax-reporting/payment structures in every EU-country which allows alcohol sales direct to consumers. Odd as it may sound, feedback tells us this is unique, and not all online retailers do so. We have also teamed up with global market leader UPS for logistics to be of the highest quality.

At the end of Q2, we had less than 20% of our portfolio up for sale, but will increase this share during coming quarter.

Early results and feedback are very positive, and we look forward to updating you in coming reports. In the meantime, we hope you enjoy shopping at www.thesinglemaltshop.com!

  • Due to focusing on the launch of the site, we have been taking a temporary pause from making significant purchase. However, we did manage to secure the following in Q2:
    – A bottle of the Midleton Very Rare Silent Distillery 46 YO release.
    – Some Hibiki 30-year-old. Voted #1 Japanese whisky by Dekanta.com
    – Some Brora Tryptich, launched by Diageo to celebrate the reopening of the once silent distillery. This comprises 3 x 500ml whiskies aged between 38 and 48 years old and is priced at GBP 30,000. Only 300 sets were released.

Slainte!
Ed Forrest
MD, The Single Malt Fund Trading Ltd.

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A selection of our investments

9 August, 2021

Brora Triptych

Brora Triptych is a truly special one – assembling a set of the three eras that epitomise Brora. Each liquid a celebration of restoration and an ode to the rare characteristics that define Brora whisky; waxy, peated and earthy. A collection of three vintages that define Brora never before released at once, this is a true collector’s piece.

9 August, 2021

Suntory Hibiki 30 Years Old

Suntory shines again! Of all the Hibiki bottles, the Hibiki 30 Years Old is the cream of the crop. It was awarded at the International Spirits Challenge in 2004, 2006, and 2008, and received the coveted title of “World’s Best Blended Whisky” at the World Whiskies Award in 2007 and 2008. Comprising of grain and malt whiskies aged for 30 years and over, a dram doesn’t get much better than this.

9 August, 2021

Midleton Silent Distillery 46 Year Old

The second release in the Midleton Very Rare Silent Distillery Collection is a 46-year-old single pot still Irish whiskey distilled in 1973 and matured in a single third-fill bourbon barrel. Aromas of apples, pears, lemon, oak spice, hazelnuts and worn leather fill the nose, complemented by notes of sweet red berries, star anise, ginger, malt and grapefruit throughout the palate and lingering in the finish.

thesinglemaltfund.com

The Single Malt Fund AB (publ)

Business ID: 559118-4949

ISIN: SE0010547299

AIF-Trustee: Finserve Nordic AB

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