The Single Malt Fund Trading Company
30 July, 2022
2022 – Q2 Whisky Investment and Market Report
Welcome to the Q2 2022 Single Malt Fund Trading Ltd report, where we comment on the latest developments in the rare whisky as well as broader industry markets and give an update on our trading operations.
Ardbeg Cask breaks records
Although technically this occurred in Q3, the news that a cask of whisky from Ardbeg distillery on Ardbeg, distilled in 1985, sold for a record breaking £16 million cannot wait for the next quarterly report. This sale had media across the world talking, with most reporting the fact that the sum paid for this single cask was more than double the amount that Diageo paid for the whole distillery, with all stocks included, back in 1997. An astonishing sale. But what does this mean for the industry, especially the whisky investment industry? While most of the industry salivated at the scale of this transaction, industry veteran Dr Nick Morgan, until recently Head of Outreach at Diageo, made the following points in a blog published on Master of Malt;
“The social media feeds of most whisky-interested people these days are swamped with blandishments from a multiplicity of ‘whisky investment companies’, all promising huge returns on investments in casks of whisky… The proliferation of such unregulated schemes is a disaster waiting to happen for the industry (and of course hapless investors), and neither the industry’s trade body, nor the large brand owning companies, seem willing, or able, to do anything about it.”
“Yesterday’s confident pricing has become today’s preposterous pricing.”
While the sale does demonstrate the enormous pull of rare whisky from an investment point of view, it would be remiss of us to ignore Dr Morgan’s comments. From our perspective, it is important to note that we stand above the “whisky investment companies” mentioned in the article for two key reasons; firstly, we are regulated which means we are under supervision of the authorities and can therefore be trusted to do right by our investors. Secondly, we focus on selling a multitude of brands in bottle format across a wide variety of price points via a transparent, brand-building e commerce site, as opposed to the complicated and risky business of investing huge sums in a few casks.
The question of price inflation is certainly one that must be addressed. There is no doubt that there is a risk that brand owner greed and the gullibility of some customers could lead to a correction at the top end of the market, especially with some brands that are very hot at present. It is for this reason that we have built a balanced portfolio of bottles across a wide range of brands and price points, while benefiting from strong supplier partnerships with the industry and the trade margins that come with these. Dr. Morgan rightly refers to the bubble that burst in the Bordeaux wine market in 2011. What he failed to mention was that the Chinese investors who caused the bubble in Bordeaux then went on to discover other wines across the world, notably Burgundies, Côtes du Rhones and the so-called Super Tuscans. Wine today remains a very healthy market as can be seen by the reports from auction houses. It has moved on from being reliant on one or two regions to a more widespread, and some would say, healthier market, where more than just a few brands shine.
This sensational sale has certainly shaken up the whisky industry once again. Let’s see how things unfold in the months and years to come
Q2 Highlights
• Record breaking sale of Ardbeg cask for £16 million
• Iconic whiskies continue to drive the rare whisky market
• Sotheby’s Spring Sales results plus Yamazaki 55s under the hammer
• IWSR publishes full year 2021 report
• Edrington publishes impressive FY results
• Solid quarter for www.thesinglemaltshop.com with three months of six figure sales
• Launch of our latest exclusive single cask bottling, from Whistlepig
Rare Whisky Q1 results
The Rare Whisky 101 Apex 1000, the barometer of the UK auction market for rare whisky bottles, delivered another impressive performance in quarter 2, with a 3.9% growth, ending the first half at +9.4%.
When you look closer, however, it is the Iconic brands, and especially Japanese icons, that are driving the growth. RW Icon 100 is up 15%, while Yamazaki has grown by an eye-catching +51% and Karuizawa continues to shine with +19% uptick. Macallan, the dominant brand at auction, also continues to reach heady heights. Talisker (+23%), Bunnahabhain (+13%) are brands that have not been seen at the top of the growth charts for some time, while Glendronach continues to establish itself as a true rising star.
On the downside, Dalmore, accepted by most as the closest rival to Macallan in the world of super premium whisky, is the worst performer of the year so far, while many other highly sought-after brands, such as Balvenie and the giant “Glens” seem to be struggling for attention.
Most brands do seem to be showing normal, steady, and solid growths in the auction markets, with only Balvenie reporting two negative quarters in a row. Let’s see how the second half unfolds. Will the icons continue to reach even headier heights? Will other brands suddenly spring into life once more? It only takes a few sales of top end bottles, such as the Yamazaki 55-year-old to have a significant impact on the market. On the other hand, it would be great to see a more even spread of growth across all brands. As whisky takes time to mature, we should not rush to conclude anything from the first half of the year’s auction sales. What we can say is that, for the past nine years, about the time it takes to mature a good Ardbeg, the RW Apex 1000 has grown by a consistent and very steady 20% per year.
Sotheby’s announce results from Spring Sales
On May 4th, Sotheby’s announced the results from its Hong Kong 2022 spring sales series of auctions covering all sectors, from art to whisky. The Spring series totalled HK$3.852b / US$496m – the second highest, and an increase of almost 25% on the total achieved in October 2021. Most interesting was the fact that YOUNG AND NEW COLLECTORS DROVE RESULTS; millennials (aged <40) accounted for over a third of all bidders across the sales (34%) – the highest since 2020. 24% of new bidders were new to Sotheby’s and over half of these new bidders were millennials (age < 40). While these numbers cover all sectors of Sotheby’s business, it is safe to assume that a new generation of whisky collectors are starting to make their presence felt in Asia.
Elsewhere, both Sotheby’s New York and Bonhams HK reported sales of a bottle of Yamazaki 55-year-old. Sotheby’s came out top with their lot going for $600,000, while Bonham’s bottle commanded a price of $560,000.
Edrington results
In April, Edrington, owner of The Macallan, Highland Park, Glenrothes and Famous Grouse, published its results for the full year to end March 2022, and they were impressive. Core revenue was up 45% to £821 million, while core contribution grew 53% to £296 million. Notable among the comments was not that The Macallan led the performance (that is to be expected), but that “The accelerated development of direct-to-consumer sales was a significant driver of growth”. References to the digital channel are becoming more and more frequent in the reports of the industry giants. Are they finally starting to wake up? Most consumers do prefer to shop on multi-brand sites, but will The Macallan be the exception?
| Index | Q1 | Q2 | YTD |
|---|---|---|---|
| RW Apex 100 | 5.2% | 3.9% | 9.4% |
| RW Icon 100 | 11.5% | 3.4% | 15.0% |
| Japan 100 | 9.0% | 3.9% | 13.2% |
| Single Grain | 2.2% | 4.2% | 6.5% |
| Ardbeg | 1.2% | 8.4% | 9.7% |
| Balvenie | -0.3% | -2.0% | -2.3% |
| Bowmore | 5.4% | -2.7% | 2.5% |
| Brora | 12.2% | -0.6% | 11.6% |
| Bruichladdich | -7.7% | 17.7% | 8.6% |
| Bunnahabhain | 2.0% | 10.7% | 12.9% |
| Caol Ila | 10.1% | 1.1% | 11.4% |
| Clynelish | 1.3% | -2.6% | -1.3% |
| Dalmore | 0.6% | -4.9% | -4.3% |
| Karuizawa | 10.9% | 6.9% | 18.6% |
| Glendronach | 3.4% | 8.0% | 11.6% |
| Glenfarclas | 0.3% | -0.3% | 0.0% |
| Glenfiddich | 1.9% | -0.5% | 1.4% |
| Glenlivet | 4.2% | -3.6% | 0.4% |
| Glenmorangie | -1.1% | 4.5% | 3.4% |
| Highland Park | 4.8% | 1.0% | 5.9% |
| Lagavulin | -2.0% | 3.9% | 1.8% |
| Laphroaig | 3.3% | 6.6% | 10.0% |
| Macallan | 12.6% | 4.3% | 17.5% |
| Port Ellen | 5.2% | 2.7% | 8.0% |
| Rosebank | 6.5% | -6.5% | 0.0% |
| Springbank | 5.8% | 0.8% | 6.6% |
| Talisker | 11.8% | 10.0% | 23.0% |
| Yamazaki | 10.9% | 35.9% | 50.8% |
The Single Malt Fund Trading Activities in Q4 2021
www.thesinglemaltshop.com continues to build momentum
In Q2, sales on our e commerce site continued to develop in a very healthy way. We had three consecutive months with six figure net sales. We served 854 customers in Q2, exceeding 1200 for the first half. We received almost three times the number of orders in Q2 v Q1 with 1,205, bringing the total for the year to 1,689. In the first half, we shipped to 20 countries, up from 18 in Q1. On average, each customer has shopped 1.4 times with us this year so far. If we can bring this to 3 times on average by the end of the year, this will be a very successful first full year. While we are focusing on recruiting new customers, this high frequency of purchase is critical to our success as it shows that, when people discover us, they like what they see and experience.
The highlight of Q2 was the opening of the UK market in April, which, for Brexit reasons, had been closed to us up until then. At the same time, we have started to see customers from Germany coming to us in significant numbers. These two markets are the biggest in Europe, so will be critical to our success.
Scotch ended the first half with 65% share of our business, with Irish whiskey second with 22%, Japanese at 7% and American at 5%, and Rest of the World taking up the remainder. It is good to see the American mix starting to show, thanks mainly to our exclusive launch of Whistlepig but also the first significant sales of our premium American whiskeys from the likes of Pappy Van Winkle. We are starting to have a very healthy balanced mix.
Sales by price-point are also nicely balanced, with an even split between bottles sold at below €500 and those above this key threshold.
Our Facebook fan page has increased from 28,000 at the end of Q1 to just shy of 40,000 at the time of writing this report. Our e mail database continues to expand with steady growth every week.
Purchasing-wise, the key highlights for Q2 were as follows; Glen Scotia 46-year-old; The Macallan 25-year-old sherry wood; Talisker 25-year-old; Glenallachie Billie Walker 50th anniversary release; Yellow Spot single cask.
We would like to take this opportunity to thank all our suppliers and partners for all their support and look forward to building on a strong start to 2022 for The Single Malt Fund.
Slainte!
Ed Forrest
Managing Director – The Single Malt Fund Trading Ltd.
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27 July, 2022
Yellow Spot single cask
The first ever Yellow Spot Single Cask. Harking back to the golden age of Irish Whiskey bonding, with 13 years in bourbon and re-casked into a Malaga cask. A nose of sweet cherries, vanilla and honeycomb, that leads into a silky palate of orchard fruits, treacle and delicate chocolate. A long warming finish. Simply wonderful.
27 July, 2022
Glenallachie Billie Walker 50th anniversary release
In celebration of Master Distiller Billy Walker’s half-century long career in the whisky industry, we are delighted to unveil the first in The Past, Present and Future Series: The GlenAllachie 50th Anniversary Past Edition.
27 July, 2022
Talisker 25-year-old
Shaped by ancient terrain, our volcanic nature reveals a new facet, every time the elements hit. Talisker 25 Year Old invites you to taste the earthy richness over and over as an enduring power echoes. A limited edition offering which makes the perfect gift or toast to a special occasion.
27 July, 2022
The Macallan Sherry Oak 25 years old
The Macallan Sherry Oak 25 years old forms part of our Sherry Oak range which features a series of single malt whiskies matured in hand-picked sherry seasoned oak casks from Jerez for richness and complexity. This special single malt delivers an intensely rich and full flavour character, citrus, dried fruits and wood smoke.
27 July, 2022
Glen Scotia 46 Year Old
The 46 year old marks our oldest release to date, with only 150 individually numbered bottles available worldwide. Originally laid down in refill bourbon casks. The finest have been carefully selected and re-casked in first-fill bourbon, before being finished in a single first-fill oloroso hogshead.
29 April, 2022
The GlenDronach 18YO Allardice
Named after the distillery founder this Highland whisky was matured in Oloroso casks and is another fine example of the sherry complexity that GlenDronach excels in.
29 April, 2022
Midleton Very Rare 2022
Combining whiskey aged between 12 and 33 years this Midleton Very Rare 2022 is the latest release from the pinnacle collection in Irish Whiskey. With delicate floral notes and vanilla on the nose, the palate releases caramelised apples and orange zest. The soft oak finish leaves you wanting more.
29 April, 2022
Caol Ila 24 YO 175th Anniversary
To celebrate the 175th anniversary of the opening of the distillery, this limited edition 24 year old Caol Ila has aromas that remind you of a campfire along with subtle spice notes. The palate is honied with light smoke.
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.
30 April, 2021
Littlemill 29YO
Littlemill 29-year-old is the third release from the Private Cellar Collection, each crafted by Master Blender Michael Henry in Littlemill’s traditional Lowland ‘floral’ style. This latest release places emphasis on developing the wood character and only 600 bottles will be released across the world.
30 April, 2021
Karuizawa Noh 1981
Karuizawa is the gold standard of rare Japanese whisky. The distillery closed its doors in 2011, although it had not been producing whisky for over a decade. This bottle from the Noh series is from a single cask, distilled in 1981 and bottled 31 years later from single sherry butt #348. A very rare Karuizawa, with only 207 bottles ever released.
30 April, 2021
Glen Scotia 30 Year Old
Glen Scotia has gone and released another well-matured Campbeltown single malt – this time, they’ve bottled up an excellent 30 year old expression! It was drawn from European oak casks and bottled up at cask strength, with only 500 bottles produced. Incredible stuff from a marvellous distillery.
30 April, 2021
1988 Middleton Very Rare
The Midleton Very Rare series is incredibly popular with collectors and many are seeking to complete an entire range with every year spanning 1984 to the present day. Some vintages are harder to find than other. None more so than 1988, which is the real unicorn amongst Midleton Very Rares.
31 January, 2021
Black Bowmore 1964
The third of the three extraordinary Oloroso cask 1964 Bowmores released in the mid-1990s, this final batch was of 1812 bottles. With an almost unfathomable concentration and intensity of flavour, and with the perfect balance of fruit, peat and power, this whisky deserves the frequently overused ‘legendary’ tag and has assumed almost mythic status amongst whisky collectors and aficionados.
31 January, 2021
The Macallan 1984 18 YO Sherry Oak
An old, classic presentation of the 18-year-old Macallan, distilled in 1984 and exclusively matured in sherry oak casks from Jerez de la Frontera, this one’s a beaut. Bottled at 43%, the desirable vintage showcases plenty of sherry influence, as expected, as well as signature Speyside notes.
31 January, 2021
Port Ellen 1978 2nd release
The second in Diageo’s series of annual Port Ellen bottlings, using the remaining stocks of this closed distillery. 12000 bottles were released in 2002 as a 24 year old whisky. Clean, sweet, powerful and smoky, this another classic Port Ellen expression that has a delicacy and less oaky style than other contemporary Islays.
31 January, 2021
The Dalmore Constellation Collection
A series of 21 vintage Single Cask Whiskies created in the Highland distillery between the years 1964 and 1992, and bottled at natural cask strengh.
31 January, 2021
Mortlach 35 Year Old 1936 – Connoisseurs Choice
A rare 35 year old Mortlach that was distilled in 1936 and bottled by Gordon & MacPhail as part of their Connoisseurs Choice range in the early 1970’s and this was an Italian import bottling.
31 January, 2021
Old Rip Van Winkle 25-Year-Old Bourbon
Distilled in the spring and fall of 1989 and stored on lower levels of a metal warehouse built in 1935 at the Van Winkle family distillery. In 2002 the barrels found a new home at Buffalo Trace and in 2014 the juice was dumped into stainless steel tanks to halt the aging process. And now, it’s ready for release. But only 11 barrels made the full trip, resulting in a mere 710 bottles.
31 January, 2021
The Glenfarclas Family cask collection
A custom-made cabinet in the form of a travel trunk, this extremely-limited collection contains fifty 200ml bottles, sampling every single Glenfarclas Family Cask vintage from 1954 until 2003.
31 January, 2021
Yamazaki 50 Year Old
Matured in the finest Japanese mizunara oak casks, the 50 year old is thought to be the oldest expression available from the distillery, which was established in 1923 by Shinjiro Torii.
16 November, 2020
Midleton Dair Ghaelach Bluebell Forest Tree 6
Composed of Single Pot Still whiskey between 12-23 years old and matured initially in American oak barrels. This gorgeous whiskey is finished in native virgin Irish oak casks. These casks have been sourced from Bluebell Forest, Castle Blunden Estate in County Kilkenny. Every bottle can be traced back to one of six different 130 year old Irish oak trees that were sustainably felled.
16 November, 2020
Midleton Very Rare 2018
The 2018 edition of the Midleton Very Rare vintages is a luscious whiskey and it comes in the new and suitably lavish packaging and bottle. Smooth, with notes of vanilla and fruit, it has a rich spicy pot still finish. Yet another fine example of the stunning quality coming out of Irelands leading distillery.
16 November, 2020
Midleton Very Rare 2017
From the most sought after collection in Irish whiskey comes this 2017 edition of the Midleton Very Rare Vintages. It comes in the last of the old- style packaging. It is a complex fruity whiskey, that culminates with a long spicy finish, a true pot still character.
16 November, 2020
Redbreast 27
After nearly 3 decades resting in casks that once held bourbon, sherry and ruby port comes the oldest ever release from Redbreast whiskey. The brand that continues to win the most prestigious awards for Irish whiskey has now created a stunningly rich and intense pot still whiskey. One of the pinnacles of whiskey from the island of Ireland.
16 November, 2020
Midleton Very Rare 1973 30 Year Old
Released in 2003 as a limited edition aged in three types of barrels- American oak, oloroso sherry butts, and port pipes. This special edition was carefully assembled by former master distiller Barry Crockett from some of the last remaining pot still whiskys from the Old Midleton Distillery. Only 800 bottles were made available.
We have secured the last remaining bottles from Irish Distillers, of this Midleton release.
16 November, 2020
Midleton 20th Anniversary Bottling
This is a commemorative edition issued on the 20th anniversary of the launch of the flagship Midleton Very Rare whisky. It is bottled at cask strength. The bottle comes with two crystal glasses with which to enjoy your whisky. Only 400 bottles were produced.
We have secured the last remaining bottles from Irish Distillers, of this Midleton release.
16 November, 2020
Dalmore 35 Year Old and Dalmore 40 Year Old
Thanks to our friends at Whyte & Mackay, we have taken up their offer of a few of these rare bottlings of this iconic distillery.
Released in 2016 and bottled at 40% abv, Dalmore 35 has aged in a Bourbon barrel, a Matusalem Sherry butt, and a colheita Port pipe.
Dalmore 40, released in 2017 from the Highland distillery has matured in American white oak ex-bourbon barrels, before aging further in 30-year-old Gonzalez Byass Matusalem Oloroso Sherry butts. The whisky was then finished in first-fill Bourbon barrels.
French crystal house Baccarat was enlisted to design the hand-blown decanters, each decorated with The Dalmore’s 12-point stag emblem, which was created by Royal Warrant holders Hamilton & Inches.
These bottles are highly sought after by collectors world-wide.
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The Single Malt Fund AB (publ)
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