LONDON, UK: VCL Vintners has reported unprecedented demand from Asian investors as the boom in spirits continues to match growth in disposable incomes.
VCL Vintners is London’s destination brokerage for investment in fine Scotch whisky casks.
The appetite for whisky in Singapore in particular has been rapidly growing, as was documented by a report in 2018 estimating an 83% uptick in whisky consumption.
Now, as the country emerges from the pandemic, its favourable population demographic where 83.2% are 18 years and over, means that Singapore is fast becoming the leading non-US export destination for the whisky industry, coming in third after France.
In 2020 alone, Singapore imported close to £250 million worth of whisky, cementing it as the predominant South East Asia whisky consumer.
At the start of 2021, VCL Vintners saw new account openings increase by 720% compared to 2020, with more than half of new investors under the age of 44.
The trend of younger investors getting into whisky has held up for H1, as VCL Vintners reports an increasing interest from would-be investors in the 20-30 year old category, who are aware of the prolific consumption of whisky in countries such as Singapore and India, and who are looking to make some of their first mid to long-term investments.
The outlook is rosy for VCL Vintners, with forecast growth (Compounded Annual Growth Rate – CAGR) of over 5% in whisky sales through to 2023.
Benjamin Lancaster, a Director at VCL Vintners commented on the surge in demand saying: “Throughout the pandemic we have seen high-end investors of South Eastern Asian origin buying into whisky ahead of the expected upturn in the market once restrictions are lifted and vaccines have come through. Investment demand currently remains strong, especially in Singapore. That is almost certainly the next big market to drive demand and we are already seeing significant sales to the whisky investing community coming from Asia.”
Changing demographics are key to the demand in whisky. The latest data from 2019 showed Hong Kong with almost 50% of its population earning between $100,000-$1m per annum and it’s a similar story in Taiwan with 43% whilst China lagged significantly behind at 10% but with a burgeoning middle class that is set to upend the statistics in the coming years.
Benjamin Lancaster prefers to look gobally: “The trend in wealth mirrors the demand that we see at VCL Vintners. On a global basis today there are more high net-worth individuals in the Asia-Pacific region than anywhere else on the planet and they are a key-driver in our cask sales both direct and at auction.
It’s a fascinating market right now with the most sought-after whiskies selling at a serious premium, but there’s still a lot of investable value lower down the cask scale and that’s where the serious players are starting to look. There’s plenty left on the table right now for those new to whisky investing and playing in the asset class as an inflation hedge, an alternative to the stock market or simply to diversify portfolios.”
Founded in 2010, VCL Vintners sources and manages fine single malt Scotch whisky casks; the highest performing alternative asset of the 21st century according to the 2020 Knight Frank Luxury Investment Index, which found that the ROI on whisky investments has grown by 586% in the last decade.
VCL Vintner’s assets range from young, new-fill barrels to some of the rarest and oldest casks on the market today. To date, the company has traded and exchanged on tens of millions of pounds of whisky, wine, port, champagne and cognac. VCL Vintners currently holds £70m of whisky under management and is on track to corner 2% of the whisky industry’s total reserves, with a target of managing £300m in the next 15 years.
VCL Vintners holds a prestigious HMRC issued WOWGR license, which is issued upon rigorous assessments, and interviews, and is subject to annual review and renewal, which allows the company to access this raw spirit for trade and exchange. VCL Vintners is part of ‘The London International Vintners Exchange’, an invitation only organisation and the company’s brokers are all accredited by the Wine Spirit and Education Trust in London.