How CaskX’s Investment Model Works
CaskX begins by working with its clients to build a portfolio of barrels, also known as kegs, based on the investors’ desired goals. By selecting casks from specific regions, distilleries, and vintages, an investor can achieve the right mix that manages risk, provides the desired holding period, and is expected 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 in a government regulated storage facility either at the distillery or at a third party storage provider until the barrels are bottled or sold to another party. Investments are also fully insured to protect investors against unforeseen catastrophe or loss. By investing in whiskey casks, investors can help the industry grow by providing cash flow to distilleries before the whiskey reaches the proper age to be bottled.
“Investors are always looking for ways to diversify their portfolios, especially during times of uncertainty and stock market volatility. Building an alternative investment business that capitalizes on the growing market value of high-end bourbon will is essentially transformed into a win-win strategy for the distillery and the investor,” said Jeremy Kasler, CEO and founder of CaskX. “What’s unique about CaskX is that we benefit the distillery by buying a set amount of unaged bourbon casks directly from them, while on the other hand, we are the first to offer individual investors accredited the opportunity to strengthen their overall investment strategy by investing in a consumer good that has a solid history of appreciation over time.”
Why investors are turning to Bourbon
With growing concerns facing financial markets, from rising inflation to lofty stock valuations to ongoing turmoil Ukraine, the CaskX investment platform has gained popularity with investors as a way to leverage barrel bourbon as a powerful diversification strategy. By purchasing a portfolio of barrels of bourbon, investors can reduce their dependence on traditional financial instruments, choosing instead a tangible asset class with a combination of unique characteristics; the most powerful of which is maturation. While most tangible asset classes remain the same, with the underlying value determined exclusively by supply and demand, bourbon on tap continues to gain flavor and complexity over time. Maturation is a very powerful aspect for investors in barrel spirits, as it takes the investment away from reliance solely on economics. Older expressions have historically sold for higher prices than less aged spirits, so investors can capitalize on both increases in market price due to increased demand and increases resulting from aging. liquid. For a quick tutorial on how CaskX works, please watch a short video produced by the company.
“CaskX has played a pivotal role in helping Kentucky Artisan Distillery continue to expand to meet the growing demand for bourbon both within United States and abroad,” said Chris Miller, president of the Kentucky Artisan Distillery. “The partnership allows us to generate instant cash flow to fund operations and capital improvements without waiting years for bourbon to reach maturity. The business model is unique in the industry by allowing private investors to play a role into the future of the distillery and the wider industry by enabling increases in production that would not otherwise be possible.And, if growth continues as expected, these same investors stand to reap significant gains from market appreciation. bourbon as it ages.
Riding the Bourbon Boom
Since the turn of the century, Bourbon has experienced a renaissance of historic proportions, with no signs of slowing down. According to the Distilled Spirits Council, over the past 10 years, the volume of bourbon sold has increased by more than 85% in United States alone with the average price of a bottle of bourbon jumping 18.50%. Even more pronounced growth has occurred in the super premium category, as spirits consumers seek premium expressions to adorn their shelves. Sales volumes in the super premium segment increased even more significantly, increasing by more than 400%. Demand has increased to the point that nearly 2 million barrels will be bottled this year, but the supply of older bourbon remains low. In fact, according to the Kentucky Distillers Association, there are currently less than 550,000 barrels that are 6 years old or older. As consumer demand for well-aged premium bourbon continues to grow and supply shrinks, bourbon prices are expected to rise further.
Kentucky Bourbon Facts (according to the KAD):
- Kentucky distillers shipped $391 million products abroad in 2020.
- Kentucky distillers produced 2.4 million barrels of Bourbon in 2020, and now have a record 10.3 million barrels stored in warehouses.
- There are five times more active distilleries in 2021 than there were in 2009.
- Distillers have invested over $1.9 billion over the past 5 years and should invest $3.3 billion over the next 5 years.
- Less than 3% of barrels in stock are over 8 years old while less than 7% are over 6 years old.
Founded in 2020 by a longtime entrepreneur and businessman Jeremy Kasler, CaskX is a global company specializing in building bourbon and scotch barrel investment portfolios for investors around the world. Capitalizing on the underserved niche of alternative investment in the barrel spirits market, CaskX works directly with distilleries to purchase and store their barrels, connecting these offerings to accredited investors who buy a portfolio of barrel spirits to hold for future resale or bottling. The company has offices in Australia, hong kongand United States. More details about the company can be found at www.caskx.com.