Beyond single malt Scotch, rare Irish whisky, cognac and armagnac are commanding ever-increasing prices…
This beautiful level of whiskies play a hugely important role, because what they’re doing is bringing depth to the category, as well as intrigue and desirability. At this top level what you’re playing with is rarity and uniqueness,” posits Gordon & MacPhail’s Stephen Rankin from his home in Elgin, Scotland. “In the same way as limited edition Ferraris or Bugattis — why does one need to exist? You can’t drive it on the open road, it goes too fast. But like a car, the difference with this whisky, as opposed to coins or whatever other stock investment, is it is something you can experience, you can drink it.” As Director of Prestige at the esteemed family-owned whisky label, it is literally Rankin’s job to guide the growth and release of their treasured casks. Founded in 1895 as an elevated shop for luxury goods, Gordon & MacPhail soon started buying whisky from nearby distilleries, casking it themselves in ex-sherry and bourbon American oak, and meticulously shepherding the aging process. They were the first to offer single estate, or single malt, bottles, and even today still only sell whisky which they’ve completely aged themselves.
“It’s an incredible honour to work with such liquid. Imagine sitting on the shoulder of Leonardo DaVinci while he paints the Mona Lisa and then saying to people decades later, Oh I saw him paint that!” he says. “It does feel that we’re often exploring very much uncharted waters with a lot of these releases, because nobody’s ever done something with this age before.” While venerable maestros like Gordon & MacPhail, The Macallan, Bowmore and The Balvenie have pioneered the surging single malt Scotch craze, other categories are starting to see their values climb as well.
Just across the North Channel from Scotland lies the country that is said to have invented whiskey sometime around the 14th century — Ireland — and interest in its rare gems like Knappogue Castle 1951 have seen “significant growth over the past few years,” as Brand Director Jon Dubin tells us, “and I am very optimistic about the future of the category.” First made available in 1998, Knappogue Castle sells a bottle of its treasured 1951 for about US$2,000. “With the double-digit growth of Scotch single malts there’s a huge opportunity for the Irish whisky category to capture some of that market share,” says Dubin.
Taking a far more precious approach with its juice is the nascent Craft Irish Whiskey Co., whose second release The Emerald Isle Collection snatches the crown as the oldest triple-distilled Irish whiskey in the world. Made in collaboration with celebrated Russian jewellers Fabergé, all seven of its bespoke Experience Boxes will be sold exclusively via private auction. The dark walnut treasure chests come replete with a Celtic Fabergé egg, bespoke oneof- a-kind Fabergé Altruist 18k rose-gold timepiece, a rough, uncut Zambian emerald presented on a gold guilloché-enameled clawfoot base, and a humidor with two rare Cohiba Siglo VI Gran Reserva cigars (and a gold-plated cigar cutter, naturally).
The munificent casks also boast a flask, a gold-plated water pipette, obsidian stones and a carafe filled with authentic Irish spring water. Oh, and two bottles of 30-year-old triple-distilled spirit which Craft Irish Whiskey Co. claims to be “the rarest Irish whiskey in existence.” The first auction held in Texas in February started at US$2 million.
Outside of whiskey, the categories experts look at to experience the most growth at this auction level are cognac and armagnac. The reason for this is twofold: Scarcity, as especially armagnac is mostly made by small, rustic producers; and aging, as both cognac and armagnac’s complexities only increase the older they stay in the barrel. Compare this to spirits like bourbon and rum which not only see huge angel’s share losses, but are spirits which many experts see peaking after 10-20 years of aging.
But even these French spirits have a ways to catch up — which also means either are a fantastic place to potentially start your investment portfolio. At a Whisky Auction event in February, a Domaine de la Vie cognac from 1777 sold for US$56,000, making it amongst the most expensive cognacs in the world. But for a spirit that dates back to the American Revolution, nearly a quarter of a millennium ago, that price sounds, well, reasonable compared to some single malts. Other bottles in the sale were an 1802 vintage for US$20,000 and a 1906 for US$6,500.
“Over the past year luxury spirits have experienced unprecedented demand, and cognac is no exception,” explains D’Ussé Cellar Master Michel Casavecchia, highlighting that not only is cognac the fastest growing spirit (sales up 62% from 2019 to 2020), but his D’Ussé label is the fastest growing in the category. Recently the brand, which belongs to the Château de Cognac house, released a 1969 Anniversaire Limited-Edition poured into a 12-cut crystal diamond decanter, replete with 24-karat gold foil and signed by D’Ussé co-founder Jay-Z. This “Bottle No. 1” was auctioned off by Sotheby’s in March for US$52,000.
Casavecchia believes lack of awareness is partly responsible for cognac’s slower uptake, but that’s changing quickly. “We see single malts at auctions all the time — auctioning a fine Scotch is nearly as common as fine art or cars — so they have the reputation as a spirit high in value.” As a craft product with extremely limited production, he notes that cognac makes up less than one percent of the world’s spirits by volume; it simply doesn’t have the same recognition as other more mainstream options. One young label looking to leverage the apparent undervaluation of armagnac is Bhakta 50. Their first expression is a thing of exquisite treasure, blending eight ultra-rare armagnac vintages — the oldest, from 1868, predates the incandescent light bulb.
Even the youngest vintage, from 1970, is more than half a century in the making. After marrying and finishing in Islay whisky casks, the ancient armagnac is decanted into a stylish Art Nouveau bottle. “The oldest spirits have always been and will likely always be the most valuable,” offers founder Raj Bhakta. “We all love the idea of drinking something that has waited lifetimes to touch our lips. When you get it right, there is no replacement for age.”
Bhakta believes in the soaring valuation of his super-aged armagnac so much that he’s launched a “Stockholder Program” subscription model. With only 125 openings, subscribers will receive two bottles from each of the thirty-eight 400-litre barrels Bhakta will release over 12 months. A prospectus for the Stockholder Program estimates a 20% annual price appreciation — a bold prediction that allows Bhakta to charge $1,000 more for the subscription than you’d pay retail for each bottle.
Of course Irish whiskey, cognac, armagnac, rum, bourbon and others would all like to experience single malt Scotch’s generous returns. But there are key factors in whiskey’s financial resilience explains Andy Simpson, a market analyst and co-founder of Rare Whisky 101: Scarcity vs demand, desirability, quality and intrigue/ passion being the most powerful. “The small volumes of collectable bottles in the market, compared to wine as a good example, means acquiring ‘meaningful’ bottles is becoming harder every year,” Simpson notes. “Couple that with global increasing demand for rare/old bottles of Scotch and it’s almost a perfect-storm-assetclass.”
Having followed single malt Scotch prices for over 20 years, Simpson’s RW101 closely tracks the market with indexes like their Icon 1000, which calculates a 40% year-over-year valuation of highly collectible Scotch whiskies since it began keeping track in 2008. Meaning Bhakta’s ambitious 20% valuation is possible—but so far, factors like demand and desirability fall behind single malt Scotch. “The difference is before in Scotch you only had the big boys doing these serious super-aged limited edition whiskeys. Now every distillery in Scotland are all launching 40 and 50-year-old whiskeys and charging some serious prices,” notes Sukhinder Singh, co-owner and founder of The Whisky Exchange, a leading global retailer of fine spirits, with an award-winning online shop and a flagship storefront in London’s Covent Garden. “And they’re all selling,” he continues, “which means the demand is there.”
Not simply a merchant, Singh has become one of the world’s most respected collectors by sourcing old and rare whiskies, since the late 1980s gathering what is considered one of the most important private compendia of single malts anywhere. His vaults boast more than 10,000 bottles, with 2,000 of those earmarked for his “drinking collection.” As a collector, Singh strongly suggests if you can afford it buy two of your most coveted expressions: one to store, and one to pour.
“Honestly, superb question,” responds Singh when asked if spirits like cognac and armagnac can experience a similar exponential growth to Scotch in the next ten to 15 years. “I think a lot of work still needs to be done, we need to keep pushing the message.” As a fan and collector of both cognac and armagnac, he relates the experience of a friend who recently bottled a couple of cognac casks alongside significantly more whisky. “He sold the whisky in two minutes, and he’s still struggling with the cognac,” Singh reveals. “So there’s still a bit of time to go, but I would also say liquid is finite, and I think yes, it will find its place over time.” So will comparable spirits from Ireland, France, America et al. experience the same sort of fanatical devotion as their Scottish counterparts? Only time and the auctioneer’s gavel — will tell. ■
By NICOLAS STECHER
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