The Single Malt Fund Trading Company

31 oktober, 2021

2021 - Q3 Whisky Investment and Market Report

Welcome to the Q3 2021 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. 

“Rare Whisky makes a strong “V” shaped recovery as demand remains robust”

Our friends at RW 101 published an 18-month report in September covering the period Dec 19 to June 2021 and the news was good for rare whisky investors. The main takeaways from the report were as follows;

Q3 Highlights

Rare Whisky 101 publish their
18-month report to June 2021
Diageo release their year-end
report to end June 2021
The Johnnie Walker Experience
opens in Edinburgh
Pernod Ricard announce the purchase of The Whisky Exchange

i) Apex 1000 in good health. 

The Apex 1000 has recovered to + 9% to end June 2021 and is expected to end the year at + 17.5%. In the 18-months since December 2019, the Apex 1000 has performed very well v other alternative and traditional investment categories, as the growth data below clearly shows:
Apex 1000 + 16%
Gold + 16%
Brent Crude +12%

Live-ex FW 1000 +8%
Diageo +8%
FTSE 100 –7%

ii) Higher pric e points soften while mid-range prices appeal more. 

The number of bottles sold at auction which were priced at over GBP 10,000 dropped from 530 in 2019 to 384 in 2020. Meanwhile, the GBP 250 to GBP 1000, and, more specifically, the GBP 250 to GBP 500 price points grew in share.

iii) The Macallan dominates volumes but not the investors favourite

The Macallan increased its market share of the volume of bottles sold at auction in the UK in the 18 months to end June 2021, with 43% share. However, The Macallan is ranked only 28th in the ranking of brands most favoured by investors. The top three ranked brands for investors were:
#1 – Springbank
#2 – Rosebank
#3 – Dalmore 

Dalmore rose to the top 3 for the first time in a long time due to limited edition and a sizeable backlog of aged releases. Other brands showing a significant growth in demand from investors are Glenury Royal, Port Ellen, Convalmore, Caol Ila, Glenfarclas, Glen Elgin, Oban. 

iv) New Distilleries enter the top 30 collectors’ rankings

For the first time ever, new distilleries entered the top 30 rankings for collectors. And not one, but two, made the list; Daftmill and Ardnamurchan. 

v) Other trends and forecasts for coming months

According to Andy and David at RW101, we are encouraged to look out for the following trends:
A return of higher priced items as whisky as an asset class gains more support.
Demand for silent distilleries continuing to grow as liquidbecomes rarer and rarer.
Full collections becoming more valuable that the sum of the constituent parts.

Diageo recovery under way

Diageo published its annual report at the end of July / early august and the news was positive. After a decline in 2019, the company announced net sales growth of +8% (organic +16%), with North America leading the way with an organic YOY increase of 20%. 

As well as some signs of hope for the beleaguered on-trade, Diageo highlighted a couple of things that are of particular interest to us. Firstly, that Scotch in China is “positioned for premiumisation” and, secondly, that e commerce is now a top priority. 

Johnnie Walker Experience caps a record GBP 185 million investment in whisky tourism in Scotland.

The much-anticipated Johnnie Walker Experience, final opened its doors on Princes Street in Edinburgh in early September. Previously an eight-storey department store, the Experience is the culmination of a record GBP 185 million investment in whisky tourism, that has also encompassed the reopening of Brora distillery and the revamping of Glenkinchie, Cardhu, Clynelish visitor centres. With spectacular views over Edinburgh castle, we can say from personal experience that The Johnnie Walker Experience is sensational and is rightly the talk of the town and across the Scotch whisky industry right now. 

Pernod Ricard surprise everyone with purchase of The Whisky Exchange 

September also brought the sensational news that Pernod Ricard had bought The Whisky Exchange , a leading spirits online retailer. The amount paid for the business, which turned over c GBP 80 million in 2020, was not disclosed, although Jefferies investment bank estimated the value of the sale at GBP 500 million.  

The Single Malt Fund Trading Activities in Q3 2021

www.thesinglemaltshop.com starting to gain momentum
September was the first month when we had a full range of whiskies on the site, having finally got over some Brexit related logistics challenges, most notably a much wider selection of Scotch. As a result, sales doubled in Sep v Aug! 

Coming out of hibernation
After 18 months without travel, we finally got over to Scotland and London in September to visit suppliers and were very encouraged by the positive feedback on our site. We are now preparing a next round of orders to stock up for the festive period. 

Slainte!

Ed Forrest
MD, The Single Malt Fund Trading Ltd.

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thesinglemaltfund.com

The Single Malt Fund AB (publ)

Org.nr: 559118-4949

ISIN: SE0010547299

AIF-Förvaltare: Finserve Nordic AB

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