The 2019 Full Year Collectors and Investors Single Malt Scotch Review

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The 2019 Full Year Collectors and Investors Single Malt Scotch Review THE 2019 FULL YEAR COLLECTORS AND INVESTORS SINGLE MALT SCOTCH REVIEW. RARE WHISKY 101 INVESTMENT GROWTH RETURNS TO THE RARE WHISKY MARKET. CONTENTS 3 Executive Summary Full Year 2019 9 Supply and Demand 12 Investment Comparison 16 Market Share by Volume – Top 10 Distilleries League Table 20 Market Share by Value – Top 10 Distilleries League Table 23 Rare Whisky Collectors Ranking – League Table 25 Rare Whisky Investors Ranking – League Table 27 Grain in Granularity 35 Crystal Ball Gazing – What Next? RW101 | FULL YEAR REVIEW 2019 2 FULL YEAR 2019 Executive SUMMARY RW101 | FULL YEAR REVIEW 2019 3 SPRINGBANK RETAINED ITS HALF YEAR NUMBER ONE POSITION IN THE INVESTOR RANKINGS, CLOSELY FOLLOWED BY SILENT DISTILLERIES ROSEBANK AND BRORA. POUND FOR POUND, MACALLAN NOW ACCOUNTS FOR ALMOST 40% OF MARKET. RW101 | FULL YEAR REVIEW 2019 4 VOLUME AND VALUE ANALYSIS VOLUME VALUE £ 160,000 £70,000,000 140,000 £60,000,000 143,895 120,000 £50,000,000 100,000 £57,707,707 £40,000,000 107,890 80,000 £30,000,000 83,713 60,000 £40,772,550 £20,000,000 40,000 58,758 £14,211,767 £9,562,405 43,458 £10,000,000 £25,060,058 20,000 0 £0 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 The number of recorded bottles of Single Malt The recorded £ value of collectable bottles of Scotch Whisky sold at auction in the UK in FY Single Malt Scotch Whisky sold at auction in the 2019 increased by 33.37% to 143,895 (107,890 UK in FY 2019 rose by 41.54% to a record high of were sold in FY 2018). £57,707,707 (FY 2018 value was £40,772,550). RW101 | FULL YEAR REVIEW 2019 5 RW101 | FULL YEAR REVIEW 2019 6 AVERAGE BOTTLE VALUE AVERAGE £ PER BOTTLE APEX 1000 INDEX £450.00 45.00% £400.00 40.00% £350.00 35.00% £401.04 38.37% £377.91 £300.00 30.00% £250.00 25.00% 30.01% £299.36 27.51% £200.00 20.00% £241.87 £150.00 £220.04 15.00% £100.00 10.00% 14.36% £50.00 5.00% 7.17% £0 0.00% 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 The average per-bottle price increased by From a small mid-year loss of 0.26%, the broadest 6.12%, from £377.91 in 2018 to £401.04 in 2019. measurement of the market, the Apex 1000 Index, returned to growth in the second half of the year, finishing up 7.17%. RW101 | FULL YEAR REVIEW 2019 7 THE TOP TEN INVESTORS DISTILLERIES THE TOP TEN DISTILLERIES SOUGHT AFTER BY INVESTORS ARE: SPRINGBANK ROSEBANK BRORA BEN WYVIS KILLYLOCH DALMORE BOWMORE GLENUGIE LOCHSIDE PORT ELLEN Despite impressive market share results, from an investment perspective, Macallan exited the top 10 investor rankings for the first time, finishing in 11th place. RW101 | FULL YEAR REVIEW 2019 8 Supply AND DEMAND TO REPEAT THE OPENING OF THE HALF YEAR REPORT: “THE FIRST HALF OF 2019 SAW VAST SUPPLY ON THE AUCTION MARKET. IN OUR OPINION, OVERSUPPLY”. THROUGHOUT THE SECOND HALF OF 2019 SUPPLY REMAINED HIGH, BUT RELATIVELY CONSISTENT. THAT ENABLED DEMAND TO CATCH UP AND ULTIMATELY EXCEED SUPPLY. RW101 | FULL YEAR REVIEW 2019 9 14,000 16,000 18,000 MONTHLY VOLUME AND VOLUME ANALYSIS MONTHLY VALUE 12,000 10,000 4,000 6,000 8,000 2,000 0 (which it evidently is doing) this bodes this doing) is evidently for it further well gains.(which investment As the number bottles of in the clearly market is finite, once supply plateaus, assuming demand remains the same or increases whiskyfor rare seen starts should in the have past. forward moving we that not expect mature. growth We of the vast to rates appears add growth of as beIf the we UK atrendline, slowing the rate to trajectory secondary while the upwards clear, still is market asignificantbe to put collection down whisky of being sold as aone-off Sotheby’s. at October 2019 in the both volume and aspike showed value bottles of sold auction at in the UK. The huge value peak can largely MONTHLY VOLUME 2018/2019 VOLUME MONTHLY JAN '18 7,111 FEB '18 6,885 MAR '18 8,870 APR '18 7,976 MAY '18 9,961 JUN '18 8,916 JUL '18 7,746 AUG '18 9,104 SEP '18 8,349 OCT '18 10,867 NOV '18 11,006 DEC '18 11,099 JAN '19 11,495 FEB '19 9,158 MAR '19 13,347 APR '19 15,830 MAY '19 10,554 JUN '19 11,160 JUL '19 11,444 AUG '19 11,633 SEP '19 10,066 OCT '19 15,220 NOV '19 12,003 DEC '19 11,985 £10,000,000 £12,000,000 £4,000,000 £6,000,000 £8,000,000 £2,000,000 0 MONTHLY VALUE 2018/2019 JAN '18 £2,349,077 FEB '18 £2,327,461 MAR '18 £2,562,155 APR '18 £2,627,833 MAY '18 £3,343,511 JUN '18 £3,125,598 JUL '18 £2,441,534 AUG '18 £3,342,756 SEP '18 £3,127,263 OCT '18 £5,418,466 NOV '18 £6,096,163 DEC '18 £4,010,733 JAN '19 £4,387,367 FEB '19 £3,148,340 MAR '19 £5,460,018 APR '19 £4,845,076 MAY '19 £3,861,500 JUN '19 £4,171,662 JUL '19 £4,236,673 AUG '19 £4,322,345 £4,519,199 SEP '19 OCT '19 £10,215,760 NOV '19 £4,160,410 DEC '19 £4,379,357 10 RW101 | FULL YEAR REVIEW 2019 “ ...OCTOBER 2019 SHOWED A SPIKE IN BOTH THE VOLUME AND VALUE OF BOTTLES SOLD AT AUCTION IN THE UK.” RW101 | FULL YEAR REVIEW 2019 11 Investment COMPARISON THIS COMPARISON STARTED AT THE END OF 2015 OBSERVING PERFORMANCE FIGURES FROM 31ST DECEMBER 2014. WE CONTINUE TO PROVIDE THESE AS A RUNNING COMMENTARY ON SCOTCH WHISKY’S PERFORMANCE AS AN ALTERNATIVE ASSET-CLASS IN ITS OWN RIGHT. RW101 | FULL YEAR REVIEW 2019 12 THE 2019 FY FIGURES ARE CHARTED ALONGSIDE A RUNNING TOTAL FY 2019 FIVE YEAR PERIOD FROM DECEMBER 2014 25.00% 200.00% 180.00% 20.00% 23.49% 160.00% 181.76% 140.00% 18.87% 15.00% 120.00% 14.51% 10.00% 100.00% 12.10% 80.00% 5.00% 7.17% 60.00% 75.09% 40.00% 0.00% 28.18% 15.89% 20.00% 14.87% 36.52% -4.19% -5.00% 0.00% FTSE 100 FTSE 100 GOLD $/OZ APEX 1000 APEX 1000 GOLD $/OZ DIAGEO (DGE) DIAGEO (DGE) LIV-EX FW 1000 LIV-EX FW 1000 BRENT CRUDE $PB BRENT CRUDE $PB From a pure investment perspective, Single Malt Scotch Whisky had its worst year as an investment since records began. To add balance, the Bank of Scotland recently reduced the interest rates on some of their savings accounts from a heady 0.2% pa gross, to a whole 0.1% pa gross. RW101 | FULL YEAR REVIEW 2019 13 APEX1000 – 5 YEAR PERFORMANCE AND 5 YEAR AVERAGE 45.00% 40.00% 35.00% 38.37% To add further balance; on an averaged 30.00% five-year basis, our benchmark Apex 1000 Index has increased by an average of 23.46% 25.00% 30.01% per year. 27.51% The late publishing on this report has shown 20.00% us that in January 2020 the Apex 1000 Index 23.46% increased by 0.92% where January 2019 saw 15.00% a dip by 2.01%. It’s still very early days yet, however, we appear to be returning to more buoyant trading conditions again. 10.00% 14.28% 5.00% 7.17% 0.00% 2015 2016 2017 2018 2019 AVERAGE RW101 | FULL YEAR REVIEW 2019 14 Market SHARE 2019 RW101 | FULL YEAR REVIEW 2019 15 Volume NUMBER OF BOTTLES SOLD EACH DISTILLERY IS MEASURED ACCORDING TO ITS PERCENTAGE OF MARKET SHARE OF THE NUMBER OF BOTTLES SOLD AT AUCTION IN THE UK OVER THE COURSE OF 2019. THIS IS THEN RANKED AS A LEAGUE TABLE AND COMPARED TO THE FULL YEAR 2018. WE’VE ALSO INCLUDED THE 2019 HALF YEAR RESULTS TO PROVIDE MORE INSIGHT. RW101 | FULL YEAR REVIEW 2019 16 TOP 10 VOLUME MARKET SHARE ANNUAL RANK 31 DECEMBER 2018 % HALF YEAR 2019 % 31 DECEMBER 2019 % MOVEMENT 1 MACALLAN 13.85% MACALLAN 16.62% MACALLAN 15.62% = 2 HIGHLAND PARK 5.61% HIGHLAND PARK 4.72% ARDBEG 4.93% UP 1 3 ARDBEG 5.02% ARDBEG 4.65% HIGHLAND PARK 4.41% DOWN 1 4 BRUICHLADDICH 4.10% BRUICHLADDICH 4.01% BOWMORE 3.81% UP 1 5 BOWMORE 3.72% BOWMORE 3.79% LAPHROAIG 2.96% UP 4 6 SPRINGBANK 3.63% GLENFIDDICH 3.28% GLENFIDDICH 2.90% UP 2 7 GLENDRONACH 3.57% LAPHROAIG 2.85% GLENDRONACH 2.74% = 8 GLENFIDDICH 3.26% GLENDRONACH 2.80% LAGAVULIN 2.72% UP 5 9 LAPHROAIG 3.09% SPRINGBANK 2.49% BRUICHLADDICH 2.64% DOWN 5 10 GLENMORANGIE 2.92% LAGAVULIN 2.44% SPRINGBANK 2.62% DOWN 4 On a year to date basis Macallan have extended their grip on the market. Their market share of volume has, however, shrunk from their 2019 half year peak. Highland Park and Ardbeg appear to be in a long-term tug-of-war for second and third place. Both have impressive ‘back catalogues’ of collectables and both are capable of releasing some of the finest spirit in the industry. Bruichladdich’s drop isn’t as extreme as it seems. So we can compare distilleries at a sub-brand level as an investment, we’ve now split Bruichladdich into three – Bruichladdich, Bruichladdich (Octomore) and Bruichladdich (Port Charlotte).
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