Investing In Macallan 18YO Double Cask: An Overlooked And Untapped Potential

The Macallan: A Powerhouse In The Whisky Category

If whisky is on the agenda, The Macallan is simply impossible to avoid - especially when it comes to high-end Scotch single malt whisky. Simply a powerhouse in this category, The Macallan is also among the distilleries that have launched some of the most exclusive, prestigious and rare releases in the whisky world, and holds the record for the world's most expensive whisky ever. But it is at the other end of Macallan's product portfolio that we have identified overlooked and untapped potential. A potential that, just as you know from wine investing, is based on high consumption and a lack of motivation to save. At the same time, here you can invest at the absolute lowest price on the market according to wine-searcher.com* and get an attractive starting point for your investment.   

Read more about the potential and market outlook for whisky below.   

*Price per bottle excluding duty, VAT and taxes, in whole cases and perfect condition  

From Neglected Component Manufacturer To World Leader

Macallan's history stretches back to 1824, when the small farm distillery in Speyside was licensed to distil. But fast forward to 1996, when Macallan was taken over by Highland Distillers, now known as Edrington.   

For much of its commercial life, Macallan was in fact "just" a producer of single malt whisky which other producers used in their blends. Indeed, there was no tradition of, or demand for, single malt whisky alone. This was, in the view of the time, only one component of another product. However, Macallan changed this view, seeing the market potential in the taste, history, and "sexiness" of single malt whisky, which Macallan, as one of the first distilleries, began to market during the 1970s.   

This visionary approach has undoubtedly helped Macallan cement its place at the very top of the whisky world. This includes the luxurious Macallan in Lalique range of 50–60-year-old whiskies, as well as the Macallan Fine & Rare range, the largest and most comprehensive range of vintage whiskies dating back to 1926.   

Edrington still owns Macallan but added additional muscle when Japanese brewing and distilling giant Suntory bought 10% of Edrington in 2020. These are strong players that can and will both expand knowledge and demand for Macallan, among other things - just as is known from Dom Pérignon and the LVMH group in Champagne, for example, or Clos de Tart and Artémis in Burgundy.   

Macallan Double Cask Series

Macallan has a broad portfolio ranging from high value consumer products to extremely rare and luxurious bottles worth millions. The Macallan Double Cask Series falls more into the former category, and it is in this that one of its strengths lies. More on that later.   

Macallan Double Cask is a union of the "new" and the "traditional" Macallan. In the past, the dogma has been to use European oak sherry casks in production, but with Double Cask, both European and American oak sherry casks are used. According to Macallan itself, this is the future.    

The range consists of a Double Cask Gold (the cheapest in the range), a 12 YO, a 15 YO, an 18 YO and a 30 YO, launched in autumn 2021.   

While according to wine-searcher.com the 30 YO costs €3,650-5,000 per bottle*, the price of the 18 YO is in a completely different price range: according to wine-searcher.com the lowest price is currently €245 per bottle*. Your investment price right now is €200**.   

In other words, it is not hard to spot the value the 18 YO variant offers - here you get Macallan quality and brand and 18-year-old single malt whisky at a price that simply seems too cheap - whether looking at the wine-searcher price or the price you can invest at here. But if you choose to invest here, you will save a further 18%, compared to the cheapest price on wine-searcher.com.   

*excluding duty, VAT and tax, in perfect condition  

**excluding duty, VAT and tax, in whole boxes and perfect condition 

Limited Edition And Large Consumption

The Double Cask series is made as a limited edition series, starting with a release in 2020. The release you can invest in here is the 2021 release, which is well on its way out of the market and is already extremely hard to come by in quantities. This also means that when there is no more 18 YO 2021 Release, there is no more and there will be no more.  

We already know that there will be a 2022 release, but no one knows how many releases there will end up being. But one thing is certain: Historically, complete collections have been extremely attractive and have earned big prizes, and these only get easier to collect the sooner you join. But whether you go with the ambition of collecting a full vertical, or simply want to enjoy the good potential of the single release, Double Cask 18 YO is an attractive investment case. Indeed, high end single malt whisky in this price range has an extremely large audience, and at this price few are thinking of saving - making Double Cask 18 YO 2021 Release an undiscovered gem for investment purposes.   

Upward Trend

Despite being less than a year since the release of Double Cask 18 YO 2021, volumes are already hard to come by, underlining demand. This is also reflected in the price trend, where the average price across all Double Cask 18 YO offers on wine-searches has increased by 15% since last summer. A nice upward trend before volumes have even disappeared from the market. 

Market Prospects For The Whisky Investor

While the whisky investor can look back and enjoy an asset that has returned a staggering 478%* over the past 10 years (19% average annual return), there is much to suggest that the future will also be very exciting. According to Allied Market Research, a US-based global market research and consulting firm, the global whisky market is set to grow by 44.9% from $86.4 billion in 2019 to 2027. This growth is expected to be driven primarily by rising prices, more whisky makers entering the market and increasing sales of good/bad bottles. But while Europe and North America are currently by far the biggest markets for whisky producers, there are two sleeping giants to the east that represent untapped potential:   

In China, sales of single malt Scotch whisky have increased tenfold over the past 20 years. At the same time, import tariffs here are quite modest, which is a big advantage for producers and their spread of scotch in the vast country. One of the challenges here, however, is that the country, as with so much else, is plagued by a huge market for copied whisky. The good news, however, is that with rising living standards and a quest for Western lifestyle and luxury, the Chinese are increasingly demanding the real thing. At the same time, there is strong growth in the Premium Blends and Single Malt categories of which Double Cask is a part. At the same time, the big players, such as Edrington, are investing heavily in China in particular, as there is a huge untapped market there. 

 

India is also an extremely exciting whisky development market, as it has a massive tradition of whisky consumption, perhaps due to its historical association with the English kingdom. In fact, India is by far the largest market for whisky in the world, and whisky is by far the best-selling spirit in the country, but Scotch whisky accounts for only 2% of total sales, according to the Scotch Whisky Association. Indeed, it is mainly the upper middle class and above who have been able to enjoy Scotch whiskies due to huge import tariffs of as much as 150%. But after the UK exited the EU, they can negotiate new trade deals themselves and the Indian administration is already well into the process of drastically reducing tariffs. At the same time, India is also experiencing a boom in the size of its middle class and a generally growing economy. As Scotch whiskies become more accessible to a rapidly growing market, it is inconceivable that sales of Scotch single malts will not explode.   

There are around 2.8 billion people in China and India combined - it does not take much of a push into these two markets before it will have a huge impact on the whisky industry and therefore prices.   

*Frank Knight, The Wealth Report 2021 

Rarewine Invest's Opinion

Investment whisky is often synonymous with extremely expensive bottles, but with Macallan 18 YO Double Cask you get the opportunity to invest in an overlooked investment whisky where both consumption and audience are huge.   

You now can get a strong starting point for your investment, as you are currently saving 18% compared to the lowest price on wine-searcher. At the same time, now is also the time to strike if you want to secure an early release in the Double Cask range - once these are off the market, they are gone - and no more are coming.   

Whisky investment has long been attractive and is in fact the asset in the collectibles category that has produced the best returns over the past 10 years, with an average annual return of 19%. But with the whisky market predicted to grow by almost 45% by 2027 and two sleeping giants in China and India, there is nothing to suggest that being a whisky investor will be boring in the future - quite the opposite.   

If you want to be an early adopter of a new type of high value-for-money whisky investment, now is the time.