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LIQUID GOLD SHINES EVER BRIGHTER! COLLECTORS AND INVESTORS
HALF YEAR SINGLE MALT SCOTCH REVIEW 2015. RARE WHISKY 101
EXECUTIVE SUMMARY H1 2015
William Grant & Sons – Feast and Famine as iconic
distillery Balvenie plummets but Glenfiddich soars.
The number of bottles of collectable Scotch whisky sold at
auction in the UK increased significantly
by 35.21% to 20,638 (H1 2014 = 15,264).
The £ value of collectable bottles of Scotch whisky sold
at auction in the UK was up an impressive 33.8% at £4.604m
(H1 2014 = £3.441m).
Polarisation continues as top end rarities excel.
o Rare Whisky Apex 100 Index (the best
performing 100 bottles) up 8.93% compared
to 4.73% over H1 2014.
Supply on The Open (secondary/auction Market
Volume
02
Value
05
Scotch – Half Year Performance
Key Index Movement – Composite Indices
06
Key Index Movement – Dynamic Indices
08
Individual Brand Performance
The Rare Whisky Investors Distillery Index
Summary
10
12
o Rare Whisky Negative 100 Index (the worst
performing 100 bottles) re-traces – 6.74%
compared to +0.16% in H1 2014… Caveat emptor!
Broader market stabilises, crystallising impressive growth
amid increasing open market supply.
o Rare Whisky Apex 1000 Index (the best
performing 1,000 bottles) up 8.04% (H1 2014 = 8.06%).
Market leader, The Macallan, sees total values stabilise
following 2014’s steep decline. Values moved down
just 0.42% over H1 2015. Older rarities show impressive
performance.
Bowmore rockets in the Investor Distillery Rankings
as it moves up 13 places from number 18 to number 5.
CONTENTS
01
COLLECTORS
INVESTORS
&
scotch whisky
market OVERVIEW
The rate of growth in supply on the open/secondary market
has remained buoyant through the first half of 2015. Full year
2014 results bore witness to an increase of 68.22%. The half
year 2015 saw an impressive 35.21% uplift in the number of
collectable bottles on the open market (20,638).
VOLUME
SUPPLY ON THE OPEN MARKET
02
While this increase remains impressive we are seeing a
proliferation of lower value bottles appearing at auction.
This has resulted in a slight depression of the average bottle
price from £225.94 at the end of 2014 to £223.08 at the end
of June 2015. Lower value bottles are becoming ever more
visible at auction. Older rarities and higher end collectables
are continuing to become heavily fought-for, increasingly
seldom seen gems.
VALUE
SUPPLY ON THE OPEN MARKET
05
All key composite indices (bottle composition of the
index is constant) finished the 2015 half year positive,
(six month performance 31st Dec 2014 – 30th June 2015)
albeit marginal for two indices.
The general trend, excepting the Brora Official Bottle
Index and the Vintage 50 Index, is one of impressive
growth, especially for the benchmark Icon 100 Index
which tracks a frequently traded ‘basket’ of general
collectables.
performance could be an indication that some collectors are
moving into Japanese whisky, more specifically Karuizawa.
Also worthy of note is while general market volumes are still
increasing, the number of bottles within the Vintage 50 Index
is diminishing. There are fewer data-points for these bottles
than
ever
before.
That
could
result
in
an
element
of
step-change when these rare bottles physically hit the market.
Brora saw a significant spike through February 2014 when
prices almost doubled. A recent and expectedly natural
correction has cooled what was viewed as an overheated
market. Despite this, Brora still remains No. 1 in the Investment
Rare Whisky Half Year Report 2015
Composite Index Performance
Table and we continue to view Brora as a buying opportunity.
The
relative
consistency
of
the
other
indices
suggests
12.00%
impressive demand across the main collectors markets.
10.00%
Both the Macallan 18 and 25 year old indices have excelled
1.62%
1.75%
increased by 3.57% and 3.77% over the course of the full year
8.16%
9.24%
2.00%
9.81%
4.00%
9.97%
6.00%
9.00%
through the first half of 2015. Respectively, these indices
8.00%
2014. Increasing demand for these long discontinued icons
through H1 2015 has seen values move up 8.16% for the 18 year
olds and 9.24% for the 25 year olds. Modern contemporary
releases still face challenges amid continued de-aging of
Macallan and heavy trading. The Royal Trilogy closed 2014 at a
0.00%
Port Ellen
Rare Malts
Macallan 25
Icon 100
Macallan 18
Vintage 50
Index
Selection
Index
Index
Index
Index
Brora Index
Index
three-bottle combined value of £2,625 having lost 17.74% of its
value during the year. Negative sentiment continued through
early 2015 and losses deepened to an all-time low of £2,226 at
the end of April (a 15.2% loss in 4 months). This rapid, possibly
The Vintage 50 Index measures the performance of some of
over-cooked descent was closely followed by a bounce in the
the oldest, rarest bottles of Scotch ever created (including –
market taking values back to 2014’s close (£2,646, up 0.8% at
Macallan 1946 Select Reserve, Black Bowmore 1st – 3rd
the half year). We believe the connoisseur, collector and
releases and Talisker 1955 and 1956 vintages). Its lacklustre
investor will continue to seek out older iconic releases from this
venerable distillery.
COMPOSITE INDICES
SCOTCH – HALF YEAR PERFORMANCE
06
07
The dynamic indices (the composition of the index changes
according to the performance of all bottles recorded) further
highlighted the ever accelerating rate of polarisation between
the right bottles and the wrong ones. Many contemporary
releases of so called limited edition and rare whiskies are
not. The dead hand of marketing is gaining an ever tighter grip
on the single malt category where retail releases are
becoming non age stated (NAS) and the number of bottles
ever more prolific.
Perhaps most impressively, the broadest reaching Apex 1000
Index increased 8.04% (8.06% half year 2014). Maintaining
such an impressive performance amid ever increasing supply is
testament to the scarcity and value being placed upon truly
rare bottles.
Conversely, the negative indices plumbed new depths and
continue to show no sign of having reached the end of their
current negative trend. Perhaps most striking is the rate of
acceleration of descent. The Negative 100 Index turned slightly
positive (+0.16%) through the first half of 2014. In stark
contrast, the first half of 2015 shows a significant -6.74%
Rare Whisky Half Year Report 2015
decline.
Dynamic Index Performance
Certain brands continue to see the adverse pressure of
oversupply and withering general interest in their collectables
push values deeper into the red. Kilchoman (down -7.83%),
10.00%
Glenlivet (down -3.74%) and Arran (down -7.27%) bore witness
2.00%
8.93%
4.00%
5.66%
6.00%
8.04%
8.00%
Apex 250
Apex 100
to significant declines. Values for the aforementioned Balvenie
(down -6.66%) also re-traced throughout the period.
0.00%
Apex 1000
-8.00%
Negative 100
-6.74%
-6.00%
Negative 250
-5.28%
-4.00%
Negative 1000
-3.02%
-2.00%
DYNAMIC INDICES
SCOTCH – HALF YEAR PERFORMANCE
08
09
2
RANK
The Investors distillery ranking is based on the pure % increase
in value for all bottles, with a small weighting on the highest
average price (all bottles) and the overall highest price of a
single bottle.
Q2 2015
MOVEMENT
1
Brora
Brora
2
Dalmore
Dalmore
3
Balvenie
Port Ellen
UP 1
4
Port Ellen
Mortlach
UP 5
5
Killyloch
Bowmore
UP 13
6
North Port
Macallan
UP 1
7
Macallan
St Magdelene
UP 4
8
Convalmore
Talisker
UP 4
9
Mortlach
Ardbeg
UP 10
10
Glenugie
Milburn
11
St Magdelene
Glenugie
DOWN 1
12
Talisker
North Port
DOWN 6
13
Milburn
Balvenie
DOWN 10
14
Glenury Royal
Convalmore
DOWN 6
15
Glen Grant
Brackla
16
Ben Wyvis
Glen Albyn
UP 19
17
Glenlossie
Glen Grant
DOWN 2
18
Bowmore
Banff
UP 7
19
Ardbeg
Glenlochy
UP 9
20
Craigduff
Glenury Royal
21
Hillside
Rosebank
UP 12
22
Brackla
Ardmore
UP 19
23
Springbank
Glenfiddich
UP 16
24
Dallas Dhu
Dallas Dhu
25
Banff
Lochside
26
Lochside
Lagavulin
27
Coleburn
Springbank
DOWN 4
28
Glenlochy
Hillside
DOWN 7
29
Glenlivet
Clynelish
UP 11
30
Glen Mhor
Laphroaig
UP 6
(FIRST HALF YEAR 2015)
=
=
UP 3
U
Up
DALMORE
p
16
U
01
p
13
U
p
12
UP 7
DOWN 6
05
23
DOWN
10
DOWN
07
21
DOWN
06
=
UP 1
28
12
NORTH PORT
THE RARE WHISKY INVESTORS DISTILLERY INDEX
13
BALVENIE
UP 8
INDIVIDUAL BRAND PERFORMANCE
10
BRORA
BOWMORE
Q4 2014
PORT
ELLEN
GLENFIDDICH
RANK
3
ROSEBANK
distillery
HILLSIDE
INVESTORS
The top two places remain unchanged with Brora and Dalmore
maintaining their previous high ranks. Bowmore moves up an
exceptional 13 places to number 5 amid increasing demand
and declining volumes for their older vintage/aged bottles
(e.g Black Bowmore, Bicentenary etc). Ardbeg’s 10 place
ascent to number 9 is an impressive performance which, again,
highlights increasing demand for older vintages and older age
statements. While Wm. Grants stablemate Balvenie tumbled
10 places from number 3 to number 13, Glenfiddich climbed up
a mammoth 16 places.
Previous king of collectables, Macallan, takes back one
place and moves from 7th to 6th. Despite the continued
underperformance of modern/contemporary releases, older
long discontinued vintage bottles and those with older age
statements have seen prices harden over the first half year.
Increased interest in open/operating distilleries has pulled
back ground from silent distilleries. At the end of 2014
there were 18 silent distilleries in the top 30 and 6 in top 10.
At the half year these weightings have levelled out evenly
with 15 silent distilleries in the top 30. The top ten now shifts
in favour of producing distilleries with 6 open and 4 silent
distilleries featuring.
Showing no let-up in demand for peated whiskies, Islay
distilleries, Lagavulin and Laphroaig make an appearance
in the top 30. As a region, the tiny Island of Islay now has
Port Ellen (silent), Bowmore, Ardbeg, Lagavulin and
Laphroaig in the top 30.
DYNAMIC INDICES
KEY INDEX MOVEMENT
12
13
Demand for desirable Single Malt Scotch brands and previously
discontinued bottles remains exceptionally strong.
The market continues to be heavily polarised with values for
collectables and limited editions from less sought-after brands
softening as buyers stick to the best known, iconic brands.
Despite the continued de-aging of new/retail products in the
Single Malt Scotch category; age (both older age statements
and older bottles ‘in-the-glass’) and vintage prove more crucial
to the collectors/investors market than ever. We see demand
for older bottles only increasing.
While values for collectable Single Malt Scotch have moved up
impressively through H1 2015, this pales alongside certain
Japanese brands. Karuizawa values (closed Japanese Distillery,
2000), in particular, have increased by 66.05% at the half year
point. It can be said that Karuizawa values have gone through a
sea-change over the last 18 months. That growth has naturally
eased over recent months (prices have now reached
unattainable levels for many buyers) but this shift in the
dynamics of the whisky-collectors landscape cannot be
ignored.
There have been far fewer truly collectable new product
releases over recent years from the Scotch Single Malt
category. This in turn is increasing demand from drinkers,
collectors and investors for older and discontinued past
releases where quality and rarity are powerful motivations for
acquisition. For many in the broader Scotch category, export
and sales figures appear challenging. The secondary market for
rarities shows little of this stress.
We view this as a clear future trend with the value of scarcity
increasing demand from connoisseurs, collectors and investors.
SUMMARY
14
DESIGN BY THREEBRAND
[email protected]
www.rarewhisky101.com