CaskX, a pioneer and market leader in the sale of barreled bourbon investments, announced partnerships with two Kentucky distilleries in order to offer new opportunities to the company’s growing investor base. To date, offerings from the partnerships with Kentucky Artisan Distillery and Jackson Purchase Distillery have facilitated the acquisition of more than 3,000 barrels of American Bourbon by investors around the globe. The firm has also opened offices in Beverly Hills, Calif., and Louisville, Ky., to support its U.S. operations.
CaskX begins by working with clients to build a portfolio of barrels, also known as casks, based on the investor’s desired objectives. By selecting barrels from specific regions, distilleries and vintages an investor can achieve the right combination that manages risk offers the desired holding period and is projected to achieve target returns.
Upon purchasing a suitable portfolio, investors receive certificates for each of the barrels which prove their ownership rights and can be used to transfer the barrels in the event of a future sale. All barrel investments are then stored at a government-regulated warehousing facility at either the distillery or a third-party storage provider until the barrels are either bottled or sold to another party. Investments are also fully insured to protect investors from an unforeseen disaster or loss. By investing in whiskey barrels investors are able to help the industry grow by providing cash flow to distilleries in advance of the whiskey being of adequate age for release as bottles.
Why Investors Are Turning to Bourbon
With growing concerns facing financial markets, from rising inflation to high stock valuations to continued turbulence in Ukraine, the CaskX investment platform has grown in popularity among investors as a means to leverage barreled bourbon as a powerful diversification strategy.
By purchasing a portfolio of bourbon barrels investors can decrease dependence on traditional financial instruments, choosing instead a tangible asset class with a combination of unique characteristics; the most powerful of which is maturation. Whereas most tangible asset classes remain the same, with the underlying value-driven exclusively by supply and demand, barreled bourbon continues to grow in flavor and complexity with time. Maturation is a very powerful aspect for barreled spirit investors as it moves the investment away from reliance solely on economics.
Older expressions have historically sold for higher price points than less aged spirits, so investors stand to capitalize on both increases in the market price due to rising demand and increases as a result of the liquid aging. For a quick tutorial on how CaskX works, please watch a short, company-produced video.
Riding The Bourbon Boom
Since the turn of the century Bourbon has enjoyed a renaissance of historic proportions, with no signs of slowing down. According to the Distilled Spirits Council, in the past 10 years the volume of bourbon sold has increased by more than 85% in the United States alone with the average price for a bottle of bourbon surging by 18.50%.
Even more pronounced growth has come in the super-premium category as spirits consumers look for higher-end expressions to grace their shelves. Sales volumes in the super-premium segment have increased even more significantly, rising by more than 400%.
Demand has risen to the point that nearly 2 million barrels will be bottled this year, yet the supply of older age bourbon remains bleak. In fact, according to the Kentucky Distillers Association, there are currently less than 550,000 barrels that are of 6 years of age or older.
As consumer demand for premium well-aged bourbon continues to grow and supplies shrink, the prices for bourbon are likely to rise even more.
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