The Single Malt Fund Trading Company

30 juli, 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 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 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.


Ed Forrest
Managing Director – The Single Malt Fund Trading Ltd.

Dela rapporten

The Single Malt Fund AB (publ) 559118-4949

ISIN: SE0010547299

AIF-Förvaltare: Finserve Nordic AB

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