An affordable plan is needed!

In my second article, I outlined the things that would and wouldn’t be collectable, and I hope that was helpful. But now we move further down the line and make another big decision – what is the budget for collecting?

For those of you just joining the series, links to the first two articles are at the end of this article.

It can never be underestimated how much you want to spend. Pick a limit and stick to it. You might feel that I am being a bit of a dictator on this, but if you are going to be collecting using online auctions, this can rapidly be addictive and can see you reach your limit.

It goes without saying that once you have decided what you want to collect, you need to thoroughly research the prices that these items sell for. You will find that the internet is your friend, as you can search if the bottle is available in retail, or how much these go for at auction. The advantage of looking at auction sites (and you have to be smart by looking at more than one), you can also see trends in prices.

An example setting a budget would be saying you’d spend up to a fixed amount every month or any other appropriate period of time. Of course if you don’t spend your budget, you could maybe carry it over to the next period. The important thing is not to over stretch yourself. Don’t assume that you can just sell a bottle if you over stretch yourself. You might not get back what you paid for it.

Another point If collecting a series, make sure you will have the budget to complete the series. This is because if you cannot complete the series, what you have bought may not realise as much value if you come to sell.

A good example is the Flora and Fauna series. 26 bottles. Some are still in production (around 9) and can be bought for under £50. Most of the discontinued ones are available at auction between £120-£450. The Speyburn bottling was only made for one run, and is quite rare – expect to pay £1000 – £2000 per bottle.

Of course, perhaps time is not an issue for you, most collectable bottles will usually come back again at some point. They aren’t always drunk, and they may make a reappearance. Certainly I’ve seen the same bottle of Glenmorangie Swamp Oak Reserve turn up at auction more than once. Don’t look for it now…. it’s going nowhere for a while. – wink wink!

Eventually it may be the case it will be affordable, but leave it too long and the price may well go beyond your reach. This is why you need to consider if you will be able to afford to collect a series.

I can’t advise you on what budget to set, as it all depends on what interests you, and how much disposable income you have.

Lastly, before setting a budget, also factor in storage costs if you want to collect a sizeable collection. This will depend on location, but I pay £65 per month plus another £50 a month for my storage unit. Having said that, mine is not a drinking collection, although I do have a separate drinking stash.

How to make the most of your budget

The only way to maximise the buying power of your budget is to have a plan. And like the character Hannibal from the 80’s TV series ‘The A-Team’, it’s great when a “plan comes together.” And this is why it is a bad idea to just spend your money without careful thought.

If you are on the path of creating a drinking collection, many whiskies have similar tastes, so you need to do the research to find out where they sit within the flavour map. Personally, I don’t like to keep to the one sort of malt whisky. Although I do enjoy a peated whisky, I’ve gone off Ardbeg, so I’d not collect the whiskies that are similar to Ardbeg. I’m more of a Laphroaig fan.

Random doesn’t work….

The thing I’ve been itching to say is that there is very little advantage either to a collector or a person who will drink their whisky to just collecting any bottle. Random doesn’t work efficiently. You certainly will not always get the value that sees that bottle go up in price. If you are drinking it, that isn’t so bad, as you are only 28 drams away from a new purchase. Still, you might have to endure a bottle of blandness or lose face by offering it to guests. The kitchen sink may provide the answer.

What you need to find is focus, and the best thing to do is have a collection policy. Not only will this help you get a good gathering of bottles, but will help protect your wallet.

What is a collection policy?

Quite simply put, a collection policy is a targeted approach to collecting in which you focus on a specific area. Some collectors may only collect bottles from a specific brand or distillery, some concentrate on bottlings from a specific area. I have used this concept to great effect which has meant I am not buying random bottles. Examples of policies I have used are:-

• a bottle from the three distilleries that were in Inverness.

• a bottle from each of the distilleries in Dufftown. Only exception was Parkmore which closed in the 1930’s and the remaining barrels were destroyed.

• a bottle from every distillery I pass through between where I live and Aberdeen. As this requires driving through the heart of Speyside, it was a major undertaking and I still need one or two bottles.

• Complete the Flora & Fauna collection. I’ve almost completed 2 complete ranges with nearly every first edition, plus all wooden boxes.

• Will be starting on the distilleries of the Lowlands once I complete a previous policy.

It’s worth remembering that in all of this, I have been looking for the limited edition bottles rather than the mass produced products of these distilleries. So far Glenfiddich was the hardest, as I didn’t want to spend an absolute fortune of it, but as Glenfiddich is a popular brand, rarer bottlings are a bit harder to come by. The one I picked was one of the last whisky batches made by the distillery while it still used coal to fire the stills. If I did get a mass produced whisky, I made sure it was discontinued.

Think about what your collection policy would be? What interests you? If smokey and peaty is your thing, consider collecting Islay and other West Coast Malts. Perhaps you want to collect all the malts from a geographical area; in Scotland there are 5 areas – Highlands and Islands, Islay, Speyside, Campbeltown and Lowlands. There are only 9 distilleries on Islay, but Ardnahoe has not released anything yet. There are only 3 distilleries in Campbeltown (Springbank, Glen Scotia and Glengyle) so this can help focus spending and collecting.

Some people only collect from one or two distilleries, although this is usually the ‘premium brands’. Macallan also is a popular choice, but I have a particular opinion on this which many of you may disagree with. The problem with Macallan is that quite a lot of people buy the bottles on release just to sell them straight away to cash in on demand (also known as flipping). It is my opinion that this actually harms the long term value of the whisky, as people are buying on the secondary market at inflated prices. One of the many examples would be the release of Macallan Genesis. Originally retailed at £495, this was released to commemorate the opening of their new distillery. Within a month they were appearing at auction for £4000+. Now you can pick one up at auction for under £2000, which is still a healthy profit for a seller, but not so good for the first buyers on the secondary market who paid double. How would you feel if you paid £4000? That means other bottles will have to do well of you still want to turn a profit.

However, it only takes a distillery to fall out of favour and you’re investment may be at risk. Those with high value bottles will be trying to sell on, and the market will become saturated, dropping the price even further. I’ll be writing an article about Macallan and my thoughts in the future, but the point I want to make is that perhaps it is best not to put all your eggs in one basket.

Whatever you decide to have as a collection policy, I’d recommend as far as possible to purchase numbered or less common bottles, but still in demand. There is no point in collecting something anybody can buy easily, as there will be no scope for an increase in value.

Conclusion

Thanks for reading this far. I appreciate that there is a lot to go over but this will focus your mind, you’ll have a targeted and coherent collection, and your bank account will be at less risk of being prematurely and needlessly emptied.

To summarise

⁃ set a budget and do not exceed it

⁃ Consider a collection policy

⁃ Only collect worthwhile bottles

⁃ Try to diversify your collection

In the next article I’ll be looking at how to keep your collection

Slainte Mhath!

for those catching up….

Article 1 Beginning a collection.

Article 2 What is and isn’t collectable

This blog is written as a hobby. If you liked this article, consider clicking here to visit my Facebook page or liking sharing this article by clicking on icons below.

If you prefer not to use Facebook, follow the WordPress blog by clicking on the link below which will deliver any blog posts to your inbox, including reviews, distillery visits, whisky news and advice.

Dealing in Drams – Part Two

In the first part of this series of articles, we looked at the reasons for why people want to collect and the basic rules of collection. In this article, we step it up a notch and look at one subject in more detail.

• What is and isn’t collectable

I’ve decided I want to collect whisky – so what do I have to do now?

Congratulations on your choice in wanting to collect whisky. You are in for such a great experience. Despite only having 3 ingredients (as long as it doesn’t get colour added) it is amazing how tastes can differ depending on things like cask selection, age, bottling strength, still shape, fermentation time, how the barley is malted or even where the warehouses for maturing the whisky are located. All of these play a part in bringing together a flavour sensation to your palate if you choose to drink what you have collected.

In my last blog post about collecting, I mentioned a few key points. These are now going to have to be seriously considered. The primary one is budget – you will have to set one, as it is not going to be fun to collect if you run out of pennies to pay for things like rent, food, petrol and other bills

What is collectable?

If you are collecting to drink or just for fun – anything is collectable, but keep reading on in this article, as it may help you focus, and to attain a truly great collection.

If you are collecting to make money, then there are far more things to look into. Just buying any bottle will be a waste of money. You need to research and to see what is in demand and short in supply. Some people concentrate on what can be argued as ‘premium’ malts such as Macallan, Highland Park, Glenmorangie, Ardbeg and Bowmore, others concentrate geographical areas, some only collect limited editions.

While I say anything is collectable, not everything is worthwhile collecting, especially if making money is your end goal.

Things that are not generally worth collecting in the world of whisky:-

1/ Miniatures

I’m going to get this one out of the way quickly. There is a collectors market for miniature bottles, but it’s limited. The range of miniature bottles that are worth collecting are typically very small, generally Connoisseurs Choice from Gordon & MacPhail. Bottles are typically tin screw caps and do not seal as well. There are issues is that the whisky within can be contaminated by the waxed cardboard seal inside the cap, as the whisky was never meant to be collected – it was meant to be drunk. And that’s what I do with my collection of miniatures – I buy them if there is a bottling I have in my collection and want to taste. I also buy them to do taste tests for you, as it saves me having to buy the full bottle.

Recent chat with somebody in the Whisky Retail trade suggested that it is harder and harder to get miniatures, as firms discontinue doing them, as most of the cost is down to the glass bottle.

2/ Anything involving a ceramic bottle or jug.

There is a massive inherent problem with ceramics. In fact there are a few. The obvious one is that ceramic isn’t see through. There is no way of verifying the condition or the level of the whisky within. It may be filled with tea. If you crack the seal open to look and find it’s all fine, you have just destroyed your investment.

Ceramic is also porous. Any problems in the glaze, and you will notice spots on the outside as whisky filters through.

Lastly, ceramic is more fragile than glass. Any sort of chip or scratch, and the limited value falls massively.

I’ve only really seen one ceramic release that has tempted me but I’ve resisted – there is a Glenfiddich in a Wedgewood container. But regardless of the whisky or the reputation of the ceramics, do your self a favour and leave the ceramics for the Antique Roadshow or your Grandmother’s sideboard.

3/ Anything from a supermarket shelf

If obtaining a collection for drinking is your goal, then there isn’t really anything wrong with buying from a supermarket, as you are drinking to consume. However don’t expect much in the way of premium or collectable whisky to be there. This is because supermarkets won’t stock the whisky you need to make a great collection – the amount of people willing to spend £120 on a 21 year old whisky in Asda is very low.

The offerings in a supermarket are going to be mass produced and not particularly worth anything unless they are really popular and get discontinued. You will rarely make much money off a whisky under £100 unless this is the situation. There are exceptions, but I will cover these later.

4/ Low quality whisky

Why would anybody want to collect low quality whisky? If you are intending to drink it, you’d be wanting to impress those you share it with, or you’d prefer hopefully to enjoy the finer things in life. There is no point in having a cabinet or collection full of whisky from a supermarket, unless that is what you like to drink.

While there is nothing really wrong with cheaper whisky, it has obviously been made to a price point. The time taken to make it and mature it will have been less. It will have been made in large batches which DOES affect the quality. And without any doubt, it will be lower strength, chill filtered and have colouring added to appeal to the mass market. This is not the finer end of the scale, and unless there is a demand after it gets discontinued, it will never make money. The chances of there being demand is low, as consumers move on to the next bottle of gut rot.

Anything from Aldi and Lidl is generally a no-no, but on the odd occasion they have released a good whisky that has impressed both the critics and the general public. The 40 year whiskies released by Aldi hit public and industry acclaim, and regularly hit auction prices over £200. Not bad for a bargain malt that cost £38.

5/ Collections being pushed by their producers.

I left this one until last, but it’s something that is bit of a personal rant, and I feel leads those just starting to collect whisky down a garden path littered with ‘dog eggs.’ My recent visit to Oban Distillery showed the distillery shop crammed full of the Diageo Game of Thrones series. Plus it was pushed by the guide at the end of the tour. While this is collectable, let me tell you why I wouldn’t bother.

⁃ the bottles are all Non-Age Statement. There could be a good whack of young, cheap whisky in there.

⁃ The price per bottle is in the £38 – £65 range – reinforces the point above.

⁃ The whisky will probably be a mix of editions that already exist but will you open it to try it? Will it be any good? The primary reason for buying should always be the quality of the spirit. While I’m sure it won’t be trash whisky, it won’t be the finest.

⁃ It is mass produced, unnumbered bottles. There will be thousands of them going about.

⁃ To make money, you have to sell it. If there are thousands of bottles, once Game Of Thrones (or whatever theme is current) leaves the current consciousness, there will be less of a demand for it. Who will you sell to? Probably every whisky drinking Game of Thrones fan will have one. Any self respecting whisky drinker won’t drink stuff made for TV programme geeks as they know it’s just a marketing ploy to sell more whisky.

Collections themselves can be worth collecting. I have a couple of complete series of different ranges, but none of which have been pushed as a specific collectable item. Plus, my collections are worth a lot more than the original price, and once fully out of production should realise a good investment.

With all this in mind, we need to think about what will be worth collecting.

What should I want to collect?

1/ Aged or Vintage Whisky

While we know that just because a whisky doesn’t have an age statement or vintage on it mean that it is inferior, it is worth noting that any age reference on a whisky seals the deal. People will then know what they are getting.

2/ Limited Editions

Not all ‘Limited Editions’ are really that limited. See my rant about Game Of Thrones, which actually just means they are limiting how much they will market it while there is demand. Also, just because something is labelled as rare, doesn’t mean to say it is. Take a look on an auction website to see how many whiskies with ‘rare’ or ‘limited’ there are – my point will be instantly proven.

The truly rare whiskies cost thousands, if not hundreds of thousands of pounds, and are worth that much not just because of age, but perhaps their bottle. Whenever Macallan release something new and limited, the value only spikes due to those flipping their bottles. One example is the Folio releases. Folio 4 has just been released, it cost £250, so the whisky in it isn’t rare or old. But by people flipping them as soon as they were released, prices hit well over £1000. Yet they aren’t that rare. It’s all just hype. A truly rare whisky in my opinion has less than 50 bottles.

Worthwhile, yet affordable limited editions don’t have to be that rare but they do have to be in demand. One such collection would be the Rare Malts series of Diageo, which is now discontinued, having been replaced by annual Special Releases in 2005, but the Rare Malts collection is usually under 6000 bottles, the range contains some cracking whiskies, many of which have disappeared forever due to the distilleries closing and being demolished. There is a steady demand for these bottles, as it seems some people still drink them, but nowadays you’ll only find them on the secondary market in specialist shops or auctions.

Try to buy whisky which had less than a run of 10000 bottles and you may stand a chance.

3/ Silent Whisky

This is generally a good buy. However, you need to be smart. Silent whisky is from a distillery that has been closed. It’s even better if it has been demolished – you then know that only the barrels in existence are all that remains to be bottled. I’ve a few bottles like that – Imperial, St Magdalene, Millburn, Glen Mhor, Glen Albyn. Even if the distillery still exists and is possibly able to be reopened, the older whisky will still be valuable. We will soon see when the original Clynelish distillery (known as Brora), Port Ellen and Rosebank become re-activated.

Whisky like this is always in some sort of demand and will perform adequately in regards to value improvements.

The Holy Grail is a limited bottle from a silent distillery.

4/ Good Quality Whisky

Finding quality whisky isn’t hard. You need to see what is popular, what is selling well, what gets talked about in the forums, whisky magazines, Facebook etc. Just collect at least a bottle or two. Get recommendations in specialist stores, such as a whisky shop or a quality off-licence. Odds on are that it will eventually be discontinued. If you have a wee supply, you’ll be in prime position to sell for profit at auction.

5/ Discontinued Whisky

Keep a watch for quality whisky that has, or will be discontinued. It has to be popular, as you need to hope people will drink what is on secondary market. Once they do, the limited availability will drive prices up on the secondary market.

I’ve bought a couple of bottles this way, and am realising good potential returns. I got the heads up about Bunnahabhain Moine Oloroso 2017 being a decent dram and not available to get in the shops. However, careful scouting online saw me buy 2 of the last available bottles I could find in retail. What I paid for two of them, some people are bidding the same amount for a single bottle at auction. Happy days for me.

6/ First / Last Bottles

When the first produce of a distillery is bottled, this can be a widely anticipated event. There are quite a few smaller distilleries that have opened in Scotland recently, and these are proving to be popular. First bottles are a good bet – if the distillery proves it has a good whisky, your bottle will increase. On the flip side, if the whisky isn’t so great and the distillery folds, you will have a rare bottle (although distillery failures are not that common nowadays). Similarly, last bottles are good too, but are much harder to obtain. I’ve a bottle from the last cask filled at the Dallas Dhu distillery, but it won’t be the absolute last bottle, as nobody is fully aware if independent bottlers still have casks in storage.

7/ Whisky Series

There is a lot to be said for collecting whisky series. There are one or two that are worth while collecting, need not cost the earth, and need not be too rare. Some of them may not make much in profit, some may be expensive, and some you need not collect all the available bottles in the series, but for the cheaper ones, it is advisable. If you are looking for an expensive series, try looking at things like the Glenfarclas Family Casks – the older the vintage, the more expensive it is to buy. The headline picture of Scotty’s Drams FB page is the Allied Distillers range released in 2005 from 6 of their distilleries. All are 15 yr old, and includes the only official bottling from Imperial Distillery, unless the owners have some older casks still in stock. Bottles are in the £50 – £120 range. Tomatin had the 5 Virtues of Earth, Air, Water, Fire and Metal. Of course, there is the Flora and Fauna range, but it is getting harder to find all of the 26 bottles that were released.

Conclusion

What we have learnt from this article is that there are definitely some things you should collect, and others you definitely shouldn’t collect. But even with the guidance that I’ve provided, there are still many ways not to be focused. Resist your temptation to just buy bottles randomly. You could end up with some duds. What you choose to collect will primarily be set by what budget you set, and how much you wish to spend on individual purchases.

Slainte!

Next article

• Setting a budget
• Collection Policies

This blog is written as a hobby. If you liked this article, consider clicking here to visit my Facebook page or liking sharing this article by clicking on icons below.

If you prefer not to use Facebook, follow the WordPress blog by clicking on the link below which will deliver any blog posts to your inbox, including reviews, distillery visits, whisky news and advice.

Dealing in Drams – Part One

One of the most popular questions I get when people discover that I have a collection of Scottish whisky is “what bottles are worth collecting?” There is no easy answer to this, and when thinking what I would have to write to cover this, it was just too big a subject to blog about in one go, so my collecting advice is going to be given out over a few weeks.

This series will contain over the next month

• Why Collect?
• Good initial rules of collection
• What is and isn’t collectable
• Advice on how to collect
• Advice on maintaining your collection
• Advice of how to store your collection
• Advice on how to sell your collection

While I mention certain bottles, it is not an explicit recommendation that you have to buy them.

Any advice is only based on my own experience. Be aware the value of bottles can go up or down.

Reasons for collecting vary from person, and what I would find worth collecting may not be so good for others. As I keep on saying, the past 10 years or so have seen a massive increase in the popularity in single malts, and this has seen many different bottles emerge, and also many disappear. Collectors are a group of people which many of the big corporate drink companies are starting to target, although not all the offerings are actually good quality or value.

So, why do people collect whisky? Having thought it over, I think it can be summarised as these reasons:-

Fun

There is no mistaking that collecting whisky can be fun. It all depends on your outlook. Perhaps you like the thrill of the chase by adding at auction for unusual bottles. Maybe you like the research of the distilleries to see what bottles are collectable, and in turn learning something about the character of that distillery.

There’s also no disputing that if you are planning to drink what you collect, that decision can fall into the category of fun. To be able to revel in the kudos of having a specialist selection in your drinks cabinet could also be a large source of satisfaction from having collected it through one means or another.

To store tastes and memories –

As the whisky industry expands at such a rapid rate, the older casks become fewer and fewer. Perhaps you remember a whisky that is now discontinued that you really enjoyed, or there is a dram that resonates with a special personal memory. It could be an idea that if you want to preserve this, you might wish to maybe buy a few bottles.

As the older casks dwindle, ‘recipes’ of blends and malts will change. Case in point that comes to mind is the 15 year old Glendronach. Its production had to be stopped in 2015, as the casks necessary to make the malt were exhausted. After a three year break, it’s back. However similar it is to the original 15 year old, it isn’t the same, and an original 15 will always likely be worth more than the more than the more recent bottlings. I’m not saying it will make a lot of money, but it will be one to consider looking at as a low cost option.

To invest

This is an entirely a subject in its own right. Before going down this path, you need to have goals, knowledge, patience and somewhere to secure your investment. In following this aim, you may still have fun in building a collection, but may never taste it.

To trade

I’m not meaning to sell in a commercial sense, but perhaps a bottle is collected on the knowledge that you never will open it, but you appreciate that it may hold some value in the future and can be sold or traded to get something you want to drink that has become more scarce.

Whatever your reason for collecting, there are some very basic rules that you need to abide by, and these don’t seem to get mentioned anywhere else. They are common sense, but worth repeating anyway.

1/ DO NOT SPEND MORE THAN YOU CAN AFFORD.

This is the most important rule, and this is why the font was made bold. Speaking from a UK perspective, a decent bottle of single malt can vary from £40 to £150 in a supermarket. You may be £70 – £100 for an 18 y.o, and £120+ for a 21 year old. In specialist retailers some will be up to £500+ for the older or more unusual. You might be able to afford it at the time, but the amount you can spend over a year may not be sustainable. You will need to set a budget, and stick to it. Trust me, it is easy to get out of control.

2/ Make sure you have somewhere to keep your collection

No point in building a collection if you have nowhere to keep it. And in an investment scenario, you will need somewhere with little temperature variation, and depending on its value, somewhere secure.

It is worth bearing in mind that a large spirit collection is a fire hazard. Many home insurers limit how much you can keep at home. Check your small print. Plus, if collecting as an investment, nearly all home insurance policies have a maximum insurance value for individual items. You may need to consider a secure storage unit and specialist insurance.

3/ Collect quality and not quantity.

Especially true for investment whisky. Some things will not make money as there is no demand for it (Bells Decanter anybody?) or a bottle of Famous Grouse. Mass produced bottlings will not make anything or very little unless they are discontinued or there is a recipe or packaging change. Even then, it may be very little profit.

Better to buy a good quality whisky over a couple of mediocre ones. Sure, for the price of a decent malt you can buy two bottles of Famous Grouse, but the decent malt will form memories, will give you an experience. Grouse is just a generic blended whisky.

Even if you don’t want to invest and prefer to drink your collection, quality always wins over quantity. Is it not better to have the finer things than always going for the ordinary and blend? By experiencing the finer things, you will expand your whisky experience and gain knowledge of different flavour profiles; in doing this you may unlock the door to the treasure that can be gained by a good whisky. Going generic means you’ll never experience much different, unless collecting the boxes it comes in is your thing.

4/ Do not expect to make money

Whisky is not designed to be collected. Or at least that used to be true. Brands like Macallan are making editions that are specifically for collectors in mind. However, if you are collecting for investment, there is a possibility that brands fall out of favour. What might be the brand of the moment may not be in 10 years. Whilst with Macallan, Highland Park, Talisker, Lagavuilin, Ardbeg and Laphroaig this may not be so much of a risk, it depends on the bottling.

To be fair, you should, with careful choices, be able at the very minimum to maintain the value in pace with inflation. But one example that springs to mind is Convalmore. I’m a fan of Convalmore, the Dufftown distillery that closed in 1985. I’ve mentioned this in a previous blog so I’ll keep it brief. The 1977 vintage of the 28 year old and 36 year old as part of a Diageo special release have done relatively well. The latest 32 year old from 1984 hasn’t. From a £1200 retail price, it can be found for around £1000 retail, and as low as £500 at auction. I’ll deal with this more in a future blog. People buying for investment either got a big shock, a bargain, or a whisky they are now going to drink.

And if it all goes horribly wrong with whisky collecting, at least with intelligent choices, you’re going to have a decent drinks cabinet to drown your sorrows!

Slainte Mhath!

Next article focus – How do I define what is and isn’t collectable?

This blog is written as a hobby. If you liked this article, consider clicking here to visit my Facebook page or liking sharing this article by clicking on icons below.

If you prefer not to use Facebook, follow the WordPress blog by clicking on the link below which will deliver any blog posts to your inbox, including reviews, distillery visits, whisky news and advice.