Investing in bourbon whiskey has become an increasingly popular alternative investment in recent years, as rare and aged bourbon continues to gain value and attention from collectors. There are several ways individuals can invest in bourbon, ranging from buying rare bottles to investing in bourbon companies or funds. With the bourbon industry projected to grow substantially in the coming decade, bourbon presents an intriguing opportunity.
Buy and hold rare bourbon bottles as they appreciate in value over decades
As with other alternative assets like wine or art, the value of rare bourbon bottles tends to steadily increase over decades of aging. Iconic bottlings like Pappy Van Winkle 15 Year can resell for over $1000 per bottle in the secondary market. Investors can buy rare or limited release bourbons directly from retailers and hold them as they gain value. However, storage conditions are paramount – improper storage can lead to ruined bourbon.
Invest in bourbon focused private equity or venture capital funds
For those interested in bourbon investment but lacking the capital or know-how to directly invest in bourbon assets, funds focused on the bourbon industry provide exposure to the space. Fund managers source investment opportunities across the bourbon vertical – from distilleries to barrel brokers to aging warehouses – thereby diversifying risk.
Purchase stock in publicly traded bourbon brands and distilleries
Several iconic bourbon brands are owned by publicly traded spirits conglomerates like Diageo and Sazerac. Investors can purchase stock in these parent companies to gain exposure to continued growth in premium bourbon. However, performance may be influenced by non-bourbon segments of the business.
Bourbon investment provides an intriguing way to diversify an alternative investment portfolio, with sturdy growth projections but also substantial risks related to supply constraints and storage viability of rare whiskey. Utilizing a combination of the strategies outlined above can mitigate risks and provide broader exposure to bourbon as an asset class.