How To Invest In Bourbon With CaskX Founder Jeremy Kasler
Why bourbon is becoming the hottest whisky commodity right now...
Image credit: Nobleman Magazine.
Dear Drink To That reader,
Spirit trends are always shifting, and one of the biggest at the moment is the upward trajectory of treating them as assets to invest in. Scotch has typically been the most popular category to invest in, but this could be changing with the increased interest in bourbon.
At the heart of bourbon investing is CaskX, founded by Jeremy Kasler. I caught up with Kasler recently to get his thoughts on why bourbon is becoming such a hot commodity.
To start off, could you share more about your investment background and how CaskX was born?
It actually began with wine investment. Back in 2003, I was selling wine to investors in Singapore and Hong Kong. At that time, wine was booming in Asia. Many people were switching from spirits to red wine. I built a strong business, which I sold in 2009.
After that, I moved into the art investment business. Again, it was a passion-led asset. Chinese contemporary art, mainly in Hong Kong. That went well too, and I sold that business around 2018.
But before selling the art business, clients began asking me whether we could source barrels of Scotch. At first, it seemed like a random question, but then more and more people asked. So, I started researching. I saw a few companies in the UK and Asia offering scotch whisky barrels as an investment.
Once I sold the art business, I decided this was the perfect next step. It felt very similar to my previous businesses of passion investments where people enjoy the product but also want financial returns. I looked at where to base the company and decided on the US because, at that time, there were no whisky investment brokers there.
I planned to open in Los Angeles in March 2020. Of course, the pandemic hit and that derailed the plan. I returned to Sydney, where I had family, and ended up launching there first. I opened an office in Australia selling Scotch barrels, then in Hong Kong, and finally, Los Angeles later in 2020. In the US, my business partners and I were quickly asked about bourbon, so we partnered with distilleries in Kentucky and Tennessee. Today, about 95% of what we do is bourbon.
For someone looking to invest in whisky for the first time, whether in bourbon or Scotch, what advice would you give?
First, always check the company. Its background, the people involved and whether it’s reputable. In Europe, the whisky investment industry is largely unregulated, while in the US, it’s more regulated, and we operate under SEC oversight.
Second, keep an open mind. Many investors want to buy what they personally drink. Say a smoky Islay Scotch or a Texas bourbon, but the best financial investments are not always the ones you love drinking. Work with a broker who understands your investment goals and recommends based on merit, not taste preference.
Have you experienced supply chain shocks, such as timber shortages affecting barrel availability? How did you adapt?
Yes, definitely. We treat whisky like a commodity, similar to oil or coffee beans. It’s not a quick trade. You need to think medium to long term. That’s why we include eight years of storage, insurance and taxes in our offering.
A couple of years ago, there was a severe barrel shortage in the US. Bourbon must be aged in new oak barrels, unlike Scotch, which reuses barrels. Distilleries had whisky to fill but no barrels. This drove up prices significantly. That issue has since eased, but it shows how supply chain factors impact value.
The good news is that an 8-year-old whisky will always be worth more than a newly filled barrel, simply because ageing increases its quality and market value.
Many alternative asset investors now consider ESG. How do you select your distillery partners, and does sustainability factor into it?
We look at distilleries the same way you’d evaluate a company stock: the quality of the product, the team, the history, and the business track record.
For example, we work with Jackson Purchase, where Craig Beam, part of the famous Beam whisky family, runs the facility. We also look at sustainability. In practice, the best distilleries producing the highest quality whisky also tend to follow the best environmental and operational practices.
How does investor behaviour differ across regions i.e. different countries and Scotch versus bourbon?
In the US, our focus is bourbon. Overseas in places like Hong Kong and Canada, Scotch tends to dominate. We’re now expanding into India, which is fascinating because about 50% of the world’s whisky is consumed there, though much of it is Indian single malt. As the middle class grows wealthier, demand for Scotch and bourbon is increasing rapidly.
Globally, bourbon is following a similar path to Scotch. It’s starting with generic blends, then moving toward premium single barrels and age statements.
Have you considered adapting your tech stack with trends like AI, blockchain and NFTs and what role do you think these trends play in whisky investing?
We’re careful not to add tech just for buzz. Our back office is automated for efficiency, given the scale of clients and barrels we manage.
AI has strong potential in monitoring storage. In a warehouse with tens of thousands of barrels, conditions differ across the racks. AI could track temperature and humidity by barrel, improving ageing consistency and providing valuable data.
As for NFTs, while there’s potential, our clients value the tangible aspect. You can visit, touch, and sample your barrel. That real ownership is key for us.
What about rye whisky and American single malt? Are they gaining traction with investors?
Rye is definitely making a come back and we’re always open to exploring new and emerging categories. For example, we partner with Sagamore in Baltimore, who make award-winning rye.
American single malt is really exciting for us. Only recently was it officially recognised with clear regulations. Unlike bourbon, it can be aged in used barrels, which solves the issue of surplus casks. It also aligns with global demand, particularly in markets like India, where single malt is highly sought after.
How does whisky investing regulations differ in the US compared to Europe?
In Europe, whisky investment is largely unregulated and anyone could set up shop tomorrow. In the US, we’re governed by the SEC. We only sell to accredited investors who meet income or net worth requirements, and we provide a full set of risk factors.
It’s stricter, but that’s good because it protects both businesses and clients.
Has bourbon tourism, like the Kentucky Bourbon Trail, influenced investing trends?
There’s nothing like visiting a distillery to understand and appreciate it. We even offer our own VIP tours for investors that involve meeting master distillers and tasting on-site. The Bourbon Trail and events like the Kentucky Bourbon Festival add cultural weight and strengthen investor enthusiasm.
Looking ahead, what are your plans for the next five years? Any other drinks ventures?
We’re expanding into India, which is complex but full of opportunity. We’re also launching a tequila investment business within the next few months.
Demand is twenty times higher than the next largest market. Until recently, most tequila consumed was young, but now there’s a growing appetite for aged expressions. We’ll be sourcing barrels for long-term ageing, similar to scotch and bourbon.
Many investors are already primed for tequila, given the high-profile success stories of celebrity-owned brands. While whisky requires a lot of education, tequila investing already has strong awareness and excitement.