Whiskey bottles are being sold for over a million dollars, but personally I think bottles that cost over a $100 are expensive. What makes these bottles that expensive? Well, there are multiple factors that add to a bottle’s price.
It actually is super interesting to know what goes into putting a bottle of whiskey on a shop’s shelf at a certain price. The rest of the article will briefly cover all the main influences on the value of a bottle of whiskey.
1. Angel’s Share
The first reason that whiskey bottles can be rather expensive is because of something called the “Angel’s Share”. A fine whiskey is aged for many years in a wooden barrel. Every year, between 1% and 2% of the alcohol disappears from the cask due to natural evaporation. This is called the Angel’s share.
In a bottle of whiskey that has aged for 30 years, about 30% to 40% of the alcohol is evaporated.
As a result, whiskeys that have been aged for longer actually have less liquid in the barrel compared to younger whiskeys. There is less whiskey left to bottle, making the liquor more scarce, driving up the price.
This is the main reason that older whiskeys generally are more expensive. The other reason is the increased risk that distilleries have when they have to hold on for a cask for longer. During all these years, the distillery has to pay for the storage space, and they obviously can not store another barrel in its place. Therefore, older whiskeys are more expensive for the distillery to make.
2. Amount of bottles
The amount of bottles that a distillery bottles have a big influence on the selling price. If there are more bottles to sell, a whiskey can be cheaper. But what influences the amount of bottles?
Cheaper whiskeys are often bottled at 40% Alcohol By Volume (ABV), as this often is the minimum alcohol percentage for the drink to be called whiskey. Obviously, the whiskey that comes out of the barrel after a certain amount of years is not exactly 40% ABV, the distillery first needs to dilute it with spring water. If a whiskey is diluted to a higher alcohol percentage, there is less whiskey to sell.
When a whiskey is bottled straight from the cask, the whiskey is called cask-strength. If the whiskey has been in a barrel for many years and bottled at cask strength, the bottles will be more expensive.
Another factor that influences the amount of bottles is when a whiskey is sold as a single-cask whiskey. Many regular whiskeys that are sold in large numbers are a mix of different casks of the same whiskey. They mix different barrels to make their batch of whiskey taste exactly the same as the other batches, they aim for consistency.
In a single barrel, you can not mix it with other barrels and it will therefore be more rare. One barrel of single cask whiskey will only be able to produce between 150 – 350 bottles based on its age.
3. Brand and marketing
Just like with many other items like cars, clothes and watches, a part of the price is determined by the brand of the whiskey. Big names like The Macallan, Glenfiddich and many more have been delivering quality whisky for many years and have therefore established themselves as a premium and reliable whisky brand.
Other whiskey bottles can be more expensive because the distillery has closed down or has insufficient stock to meet market demand, as with the popular Japanese distillery called the Yamazaki distillery. When a Yamazaki single malt was crowned the best whiskey of 2003 the distillery was unable to keep up with the demand. This drove prices sky high and bottles were selling at 3 to 4 times of the market value.
4. Whiskey market
Just like what happened to the Japanese single malt, demand can drive prices up to insane numbers. There are a lot of whiskey critics and reviewers that share their opinion on different whiskeys, on a daily basis. People share their opinion with other people, and in my opinion this is also one of the best ways to get to try new whiskeys. Just ask what your friends/colleagues/family likes to drink and try it out.
Over the years, the whiskey market has been growing, as the drink has become increasingly popular. Big players like India are asking for more and more whiskey. India accounted for about 45% of global whiskey consumption in 2018. The global whiskey market is set to exceed $84 billion by 2025. These numbers are insane, and sadly this rising demand can also drive up the price of renowned bottles.
5. Other factors that make a bottle more collectible
There is one common example of a bottle of The Macallan that sold for 1.5 million pounds. At the auction, held in October 2019, the bottle broke the wold record for most expensive whiskey bottle ever. Next to all the different things discussed above, there are some other factors that influence the price of this bottle. There were only 40 bottles of this whisky ever made.
The previous record was another The Macallan 1926 bottle, which was sold for 1.2 million pounds. Some of these bottles were hand painted by renowned Italian painter Valerio Adami. All these extras drive up the price.
There is a 50 year old Glenfiddich whisky that comes in a hand-stitched leather-bound case with hand-woven silk, decorated with Scottish silver. All these extra premium features help drive up the price of a bottle.
And finally there are investment whiskeys. If you know what you are doing, which I do not, investing in the right whiskey bottles can make you a lot of money. These bottles are bought and sold without the intention to be drunk. These are the bottles that break records, as I am pretty sure the buyer of a 1 million dollar plus bottle of whiskey does not have the intention to drink it.
Frankly, extremely old whiskey risks tasting like a wet log due to the influence of the wood of the cask. There is a common misunderstanding that older whiskeys taste better, and this is not always the case.
What makes cheap whiskey cheap
On the other side of the spectrum there are cheap whiskeys, but what makes them cheap? First of all, these whiskeys are often very young. Reducing the time the whiskey spends in a barrel reduces the risk, the Angel’s share is just a couple percent and you can produce multiple batches in the same amount of time.
Next to this, a cheap whiskey often is a blend of different whiskeys. This means that a distillery is able to create flavor or notes in a blended whiskey simply by buying other whiskey and adding it to the blend. Using this technique, a distillery is able to add fruity notes, peaty notes or other notes by adding a whiskey that holds that characteristic.
Finally, a cheap whiskey is often mass produced and heavily diluted. If the drink is diluted to 40% there is more whiskey to sell. Due to the mass production the flavor of the blend can be extremely consistent due to the ability to mix different casks together.