The Early Bird Catches the Whisky.
In terms of the rapidly changing value of rare/old whisky, it’s fair to say I’m constantly on the lookout for snippets of intelligence which makes selecting bottles (to keep) easier and makes them more likely to show gains over the years.
Most collectors/investors know that first releases in a series of bottles traditionally outperform subsequent releases. But by how much and why? I was asked this question a while ago, so I thought it was about time to delve deep into the data, do some research and prove/disprove this concept.
I’m going to start with an index showing the value performance of some fairly iconic first releases versus their subsequent next release. The index tracks UK auction prices, covers the last two years and plots the ‘value’ of a group of bottles rather than the ‘price’. This enables a direct comparison to be made where different ‘portfolios’ of bottles cost differing amounts.
The index starts at a value of 100 and works its way from there. In effect each ‘point’ increase (or decrease) represents a one percentage point change in value either way.
The bottles used in the index are –
First Releases Second Releases
Port Ellen 1st Release Port Ellen 2nd Release
Icons of Arran 1st Release (Peacock) Icons of Arran 2nd Release (Rowan Tree)
Bruichladdich PC5 Bruichladdich PC6
Bruichladdich Octomore 01.1 Bruichladdich Octomore 02.1
Ardbeg Very Young Ardbeg Still Young
Brora 30 y/o 1st Annual Release Brora 30 y/o 2nd Annual Release
Balvenie Tun 1401 Batch 1 Balvenie Tun 1401 Batch 2
The first releases finish at 223.73 points (a 123.73% increase) whereas the second releases finish at 126.87 points (a 26.87% increase). On a purely comparative basis the first releases outstrip their subsequent brethren by a ratio of 4.6 to 1.
It seems the whole concept of first releases being the ones to have is particularly strongly born out. Before I ran the numbers, I was expecting this to be the case, just not to this kind of degree.
That leads to the natural question of why first releases are so much more in demand than other releases. In my view there are a number of reasons for this –
(i) First releases generally (not on all occasions) consist of fewer bottles.
Distilleries will want to test out a new product unless a release schedule is planned. These are small batch releases of relatively rare whisky to start with. Take the port Ellen annual releases. We’re now eagerly waiting for this years 12th release (put aside any issues with pricing for the purpose of this). These almost fanatically followed annual bottlings were originally meant to be a trilogy. That means we’re now on 12 of 3! The concept was proven with the early bottles, so if it ain’t broke, why fix it? On a separate point, I’m now starting to see some downward movement in values across Port Ellen official releases… has a doubling in price for the 12th release resulted in a reduction of interest? I remain to be convinced but we’ll see.
Bruichladdich released just 6,038 bottles of Port Charlotte, PC5. PC6 saw this number all but treble with 18,000 bottles released. Inevitably demand increased for PC5.
(ii) As time passes more collectors are entering the market.
Global broad-based interest in Scotch has, and is, resulting in an increase in the number of people starting to build collections. If I were entering the market now and decided to focus on a specific release I’d more than likely want every bottle in the set. The Icons of Arran from Arran distillery are a great example of this. Arran has garnered much interest as a collectable recently. The most recent icon (Golden Eagle) is still relatively easily available, however, the first release (Peacock) sold out years ago. This increase in demand is applying serious upward pressure on market values.
(iii) Bottles are Continually Taken out of the Market.
This really goes without saying, however, the longer a bottle has been on general release, the fewer bottles will be left. Even old and rare examples are continually being opened and consumed. The graph below is purely for illustrative purposes (the Y axis shows the % of bottles still sealed and the X axis is time in years); however, it demonstrates the point. The more recent the release, the higher the percentage of bottles still on the market. As I say, the graph is purely for illustrative purposes and isn’t based on any research, more ‘gut feel’. I’ve supposed that the bulk of bottles are consumed in the first year of release then there’s a steady drop over time. As to what the actual percentages are, I suspect there’s no real way of knowing for sure.
There are many more factors which can affect the performance of a first release but I consider the above to be the most influential aspects.
The interesting thing is, the figures are based on a relatively short period of time and compare UK auction values. If, for arguments sake, you’d bought some of the above mentioned bottles from The Whisky Shop upon their original retail release, this is what you’d have paid –
Port Ellen 1st Release – £95
Bruichladdich PC5 – £69.99
Bruichladdich Octomore 01.1 – £86.99
2002 Brora 30 y/o 1st Release – £100
Ardbeg Very Young – £29.99
A grand total of £382.97 to you sir/madam! In todays market, the auction value of this small but select portfolio would be worth in the region of £1,885: An increase of over 392%.
I suspect first releases will continue to outperform subsequent releases. The challenge is finding them and ensuring they are from the ‘right’ distillery.
One of this years big releases from a personal perspective is the Diageo Brora 35 year old. Not a first release in its own right but the first time Brora has seen 35 years. Therein lies this months tip…. Keep your eye on The Whisky Shop over the next few days, a little birdie tells me news on how to order and release dates may be imminent!