Features

Cask strength: the increasing collectability of bourbon by the barrel

Collectors and investors alike are turning towards American whiskey. Lucy Shaw speaks to Jeremy Kasler, CEO and founder of CaskX, about buying into the world of bourbon barrels

Words by Lucy Shaw In partnership with CaskX

Cask X

The global thirst for American whiskey is at an all-time high, and the finest and rarest expressions are increasingly catching the eyes of enthusiasts both as collectibles and as an investment. With just 710 bottles distilled in 1989, Pappy Van Winkle’s Old Rip Van Winkle 25 Year Old Kentucky Bourbon currently sells for an average of US$52,000 a bottle. But it’s not just Pappy making headlines – in 2022 a Sotheby’s auction of rare American whiskey became the most valuable sale of its kind in history, bringing in a total of $1.63m – double its pre-sale estimate. The top lot: LeNell’s Red Hook Rye 24 Year Old Barrel #4, sold for $43,750, making it the most valuable bottle of rye whiskey ever sold at auction.

A record 2.7 million barrels of Kentucky bourbon were produced in 2023 as distilleries attempted to keep up with a growing global demand for their liquid. Keen to capitalise on the current bourbon boom is CaskX, a whiskey barrel investment firm founded in 2020 by UK-born, Beverly Hills-based entrepreneur Jeremy Kasler, who spotted a gap in the market for a business focused on American whiskey investment in a sea of Scotch specialists.

CaskX CEO Jeremy Kasler
CEO Jeremy Kasler has bold ambitions to take the CaskX concept global

‘I saw how successful Scotch investment was becoming in the UK and Asia, and wanted to do the same with bourbon in the US,’ says Kasler, who believes that there is great value to be found in bourbon right now and that the American whiskey industry is where Scotch was around 10-15 years ago. ‘We’re seeing bourbons selling for crazy prices both in retail and at auction now. Drinks lists are getting more sophisticated and bourbon bars are popping up all over the world,’ says Kasler. ‘Bourbon was incorrectly considered as a mixer in the past but attitudes have changed and consumers in emerging markets like China, India and Brazil are buying Bourbon to drink straight now, not just as a mixer.’

 

Natural appreciation

CaskX works with a host of American whiskey distilleries in Kentucky, Tennessee and Texas, including Bardstown Bourbon Company, Green River, Kentucky Artisan Distillery and Old Glory Distilling Co, offering clients the chance to invest in barrels of new make spirit that can be sold on for a profit once they mature. Kasler keeps a keen eye out for rising-star distilleries with growth potential and only sells casks to accredited investors that earn upwards of $200k a year or have over $1m in assets. Portfolios at CaskX start at 24 barrels and include insurance, eight years of storage and certificates of ownership as part of the package.

Placing a premium on transparency, all casks reside in government-regulated warehouses that undergo an external audit each year. Investors can monitor their casks via CaskX’s online portal, which includes information on where the barrels are stored, the age of the liquid and its mash bill. ‘Bourbon has a quicker turnaround than Scotch as it ages faster – you can create a great bourbon in six to eight years, while it takes 10-20 years to make a great Scotch,’ says Kasler, stressing that the CaskX model is focused on wealth preservation, as bourbon prices tend to be more stable and uniform than Scotch.

I saw how successful Scotch investment was becoming in the UK and Asia, and wanted to do the same with bourbon in the US

‘This isn’t about speculating on booming prices – a newmake bourbon is a very different product to an eight-year-old bourbon,’ he says. ‘The liquid naturally appreciates in value as it matures in the barrel. Americans like to invest in tangible assets they can touch, and whiskey has shown resilience to volatility in financial markets, currency fluctuations and inflation, making it a solid option as an alternative asset.’

 

Perfect provenance

Part of the impetus behind CaskX is to assist distillers with cashflow to help fund growth plans and stop bourbons hitting the market before they have had time to mature due to a need for revenue. ‘With distilleries generating cash from barrel sales, they can be more patient in selecting the liquid to release and can wait until the time is right,’ says Kasler. With offices in LA, Sydney and Hong Kong, Kasler has bold ambitions to take the CaskX concept global. A London office is due to open this year, a Canada office is in the offing, and he’s considering consolidating the firm’s barrel stocks and creating a bourbon experience in Kentucky for his clients with a state-of-the-art tasting room.

CaskX
All casks reside in government-regulated warehouses and investors can monitor their stock via CaskX’s online portal, which includes information on where the barrels are stored, the age of the liquid and its mash bill

When it comes to selling, clients are free to liquidate their investments after a year but Kasler recommends that they keep hold of their casks for longer. ‘We tell our clients to be prepared to wait for eight years as they’ll get the highest price for the liquid and we can pre-plan the sale. When the time comes, we assist with the sale and charge a 5% brokerage fee.’

An important aspect of the CaskX offer is that clients can enjoy VIP tours and tasting experiences at the distilleries they’ve invested in, making barrel investment an appealing way to diversify their portfolios. ‘They get to feel like part of the process during the distillery tours, as they can meet the makers, stir the mash bill and taste directly from the barrel,’ says Kasler. ‘Our clients are bourbon enthusiasts.’