名物 - Types of Expressions
As I went out to a bar yesterday again for the first time in a while (I’ve been making a lot out of house parties and restaurants lately haha) I managed to have an incredible conversation with some of the bartenders on my new hobby. It went towards the discussion of how I am looking at investments in an independent bottlings and event bottlings, relative higher range main-line expressions.
Here are my thoughts on these differences and some things to know.
独自 Independent Bottlings:
As a brief introduction, independent bottlings are when one company calls a distillery and requests one or a couple of barrels to be specifically bottled for them. often the distillery will bottle these - in standard bottles for the distillery in most cases - but the label can often be designed by the bottler with guidelines from the distillery. Independent bottlings are a very big hit or miss.
Negatives:
Given that they represent reserved casks from earlier on, a standard independent bottling can really be blending fodder if the barrel comes out poorly.
You also are not getting a “distillery” flavour - you are getting a bottlers expression of that distillery in an immature state. This is really important if a distillery is up and coming based on flavour. Are you looking for that Bowmore ashy smoke? If you find some company having done an independent bottling of Bowmore, they are not using the master distillers and blenders of the company to put together the bottle. The signature flavour will not be there.
Double research - independent can be great, but this actually requires the knowledge of the bottler as well. Are they going to build a name? Are they a distributor, bar, restaurant, etc. with people with a sense of taste, passion for whisky and a brand name of their own? Will they run a series of bottlings which will have a collectible component? Why was this particular barrel bottled?
Lack of secondary market - you basically need to work extremely hard to understand 3. It is overwhelmingly difficult to get this information second-hand, so there needs to be a source for 3 to work well. Either a distributor working on this, or a clear record from the original bottler can work. But once you are relying on the prior bottle owner to tell you, due diligence is impossible. Hence there is very limited after-market effects if you are getting the wrong bottle, and longer term investments are going to be incredibly difficult.
Positives:
Rarity. These bottles run in small series. Independent bottlings thus effectively allows an investor to short-circuit the aging process - you can actually get a rare bottle and invest in it without an astronomical price tag. The age statement has very little bearing on the rarity of the bottle, and it cannot be reproduced either!
Flexibility. As per Negative number 2, you are not investing in a main line expression curated by distillers and blenders - you are investing in an independent bottler’s taste and recognition. Say for example that you think that ex-bourbon barrels will have the edge from an investment perspective in 5 years time (which might very well be the case given how bourbon is blowing up lately!) but your distillery of choice is moving more towards sherried casks to meet the current wave. Then finding a firm doing independent bottling and having a history or appreciation for ex-bourbon casks, which is also bottling ex-bourbon casks from your distillery of choice can be an incredible way to play that bet! Also, you might get things that are more valued in the investment or connoisseur community but are off-brand, such as cask strength or single cask.
Price. As per 3 and 4, independent bottlings can be risky. They aren’t likely to have a global reach, so don’t go down to your local whisky bar and buy their independent bottling and then expect to be able to sell the particular bottle at a premium if you move across the world. Buying independent bottlings thus often has limited collectors- or even aging value. In investing we call this risk premium! Should the distillery, or the flavour profile, or the bottler really take a leap in the ranks, then there is a massive opportunity to see an upswing in price! It’s not going to cost you the same as a main line expression, so you can be playing potential more than brand recognition.
Selection. Let’s be honest. It’s going to be difficult to walk into Suntory and get a barrel of Yamazaki these days for your own independent bottling. But you probably can call up Kavalan! You will thus be able to get some interesting brands away from the public eye. If you are betting that the distillery will pick up business, buying a barrel (or signing up for a bottle through an independent bottler) for independent bottling might be one of the easiest ways to do so!
Art. Independent bottlings can have special labels, often adorned with interesting art and motifs depending on the themes that they were going for when they bottled the cask. If you see an opportunity to pick up a good bottle and you really love the label (or it really makes a statement on a shelf) an independent bottling is going to be your best bet of getting this premium onto it as well. Especially if it was only produced in limited quantities or has a valuable motif.
Overall, I love investing in independent bottlings because they are really the purest expression of higher risk investment management. Building a portfolio, creating collections, doing due diligence on distillers as well as the bottler, and really understanding the investment trend and play, with all the risks and rewards that come with it is probably the most fun I have with whisky. It opens up discussions with independent bottlers - which are important when I want to get into the space more and build my connections with bars and distillers - and is just generally a really great time for me personally. A merry combination of drinking and investing.
I would really recommend this for the people that are looking to be enthusiastic about whisky, getting into the community and discussing with bars. If you are looking to put in the effort, this is where you will get a lot of emotional return for your investment of effort.
For investors looking to turn $100,000 into $200,000 with minimum time and risk requirements, that is very unlikely. It’s a great home for your first $10,000 though!
暁 - Event Bottlings
Event bottlings, in comparison to independent bottlings, are more about the particular event - for example a bar show, a corporate partnership event or anniversary, or special internal celebration - but the bottling is ran under the management of the distillery. If you’ve seen the Johnnie Walker Blue Label special editions featuring a city / Lunar New Year animal, you will get the idea.
Thus distillers can take a lot of the benefits of an independent bottling, but in-house. Different expression / barrel? Done. More interesting art? Done. Smaller, rarer selection? Done!
This doesn’t necessarily mean that you as an investor can enjoy all of this (for example, when they run a rare bottling, that will be expensive!) but it is a very interesting middle ground. Also, they can be interesting experimental bottlings by the distiller, which can then be an avenue for the distiller to get into a different main line! If you can therefore pick up a great event bottling with a taste twist, you can get:
Potential early access to a flavour profile.
Better bottle art.
Rarity.
From an investment perspective, there is a major difference to independent bottlings. Given that these barrels are kept in reserve by the distiller and often saved for special occasions - sometimes older but definitely rarer - they are special. A price premium results, and these bottles can be much pricier than a core expression or a main line. And where you can otherwise research the bottle through checking the bottler or a distiller for an independent bottler, this will be difficult for event bottles. You trade this due diligence opportunity for core distiller brand name and rarity - it’s difficult to get everything, and you probably don’t want to be behind the curve if you find the right expression.
Event bottlings are more for those of you looking for investments without thinking too much about it. Less from just an enthusiast perspective. Buy it and hold, and let the brand and rarity do their thing! It’s a relatively easy way to commit $100,000 and then go do something else for a while. Come back when it’s $250,000!
The play here is really on going for the smaller distilleries and seeing what they are putting together for events. There you can get some of the swing for growth if the distiller picks up and gets better distribution, while not shelling out for something in the range of a Suntory or Nikka bottling. My strong recommendation would be to try and get a higher range expression from a smaller distillery than to try and chase the big players. Smaller distillers didn’t go into the distribution halt running out of certain barrels and kept distribution rolling. Getting a good bottle of an age statement “big two” expression is not great value in comparison over the next 15-20 years if you are holding onto it because the “squeeze” on supply will disappear. You can then play the rarity card and hope you get the luck of the draw, but I would really go for the smaller players and putting in a bit of research.
