Kindred spirits: How to get into booze collecting

Demand for fine, or luxury, spirits has leapt over the past several years, led by tequila and American whiskey/bourbon. The Distilled Spirits Council of the U.S.’s Luxury Brand Index, a gauge of demand for high-end spirits, grew an average of 14% annually over the five years through 2023. The council defines a luxury spirit as a 750-milliliter bottle having a retail price of $50 or more.

Spirits as a collectible has been around for decades but really took off about 20 to 25 years ago with collectors and investors recognizing that single-malt Scotch whiskies were valuable, says Amayès Aouli, global head of wine and spirits for Bonhams. In the past 10 years that popularity has had a ripple effect across other spirits, driving up scarcity and prices.

The keys for novices is to understand that collecting spirits—as with so much collecting—can be a fickle investment. Much like art or other alternative investments that are driven in part by collector passion, the secondary market for spirits collecting is opaque and not every bottle will rise in value over the years. As a result, it helps for collectors to look beyond money, and invest in spirits they would simply enjoy drinking.

“You need to really buy something you enjoy drinking because prices are fickle, taste trends are fickle," says David Thomas Tao, a collector, spirits writer and competition judge.

How to start collecting

Rudy Matic, a buyer’s consultant and certified specialist of spirits, says collectors should develop a palate by tasting different spirits and talking to bartenders and liquor sales representatives who can make suggestions for products with similar taste profiles.

Many liquor stores or bars that specialize in a type of spirit often hold tasting events. These events are a good way to explore a producer’s core product range—which are a brand’s annually produced bottles put out in mass quantities at a consistent flavor, such as Jim Beam’s White Label line—and to meet fellow enthusiasts. Some cities have clubs dedicated to certain spirits, and industry publications also offer ways to learn more about brands and limited-edition releases. Many collectors often buy two bottles at a time, one to save and one to consume.

Quality and rarity define what’s collectible, so core items aren’t likely to rise in value, but it can happen if the product is discontinued at some point, says Rory Glasgow, national single-malt Scotch whisky ambassador for U.S. and Canada for Brown-Forman, citing the company’s Scotch whisky brand GlenDronach.

In 2015, a year before Brown-Forman bought GlenDronach, the brand’s core 15-year-old bottle was discontinued. Brown-Forman relaunched the core 15-year-old brand in 2018, but to differentiate it from the previous bottling, the company named it 15-year Revival, reflecting a new master distiller and stocks. The Revival retail price is $105 a bottle, but 15-year-old bottles that were discontinued under the previous ownership in 2015 sold on Unicorn, an online auction platform, for $230.

One pitfall to beware of: Brands can call anything a limited edition, so dig into how many bottles were produced and if the liquor differs from the core product.

Robert Furniss-Roe, chief executive of Samson & Surrey, a portfolio of craft spirits brands, pointed to Puntas, a limited-edition tequila from Tequila Ocho. “It’s self-limited to a few thousand bottles, and it’s something that appeals to the nerds out there," he says. The 2023 Puntas release originally retailed for about $75, and some bottles have already sold at other retailers and auctions for up to $200.

It is difficult for collectors to get their hands on popular bottles such as those from bourbon producers Pappy Van Winkle and Blanton’s, because distributors allocate only so many bottles per store or even per state. Some stores, such as Seattle’s Downtown Spirits, use a lottery system to give customers a chance to buy allocated bottles.

Owner Marques Warren says participants in his store’s membership program get access specifically to its limited-release drawings each month. Warren issues tickets to members who want to opt in for a drawing of about 12 to 15 high-demand bottles and livestreams the drawing, which gives winners access to purchase those bottles at retail price.

“It is a way for us to sort of give people what they want, but do it in a fair manner," he says.

Matic says liquor-store managers often alert preferred shoppers to new releases, limited editions or when so-called brand ambassadors or master distillers come to town to meet with collectors. They also have discretion to set aside certain bottles for favorite customers.

However, such treatment may not be an option in the 17 states where liquor sales are state-controlled as they have their own rules on limited-edition bottles. Such states, which include Michigan and New Hampshire, may also have lotteries for allocated bottles.

Storing and selling a collection

Experts say collectors should hold bottles for at least five years if they are looking for price appreciation. Spirits are well-suited for long-term storage as unlike wine, once bottled, they don’t age. Keep bottles in a cool, dry place, away from direct sunlight and excessive heat. Store bottles upright, not on their side as the high alcohol content will damage corks and spoil the spirit.

Part of the fun of collecting is hunting down older bottles or limited editions, but experts warn collectors against buying or selling bottles that aren’t at liquor shops or auctions. Sales on social-media sites and through private groups aren’t legal because alcohol is a controlled substance, and it is easy to get scammed with a fake bottle that has been refilled with an inferior spirit or nonalcoholic liquid.

One of the best ways to guard against unscrupulous sellers or to find the deepest market for unloading a collection is through an auction house such as Bonhams, or Unicorn, which has held weekly online sales since it launched in 2020. Any auction house will get to know the seller and offer estimates, and if collectors agree to terms, the auction house will take possession and conduct further due diligence to confirm quality and authenticity.

“We’ve caught a lot of fakes," says Unicorn CEO Phil Mikhaylov.

Ultimately, would-be collectors should be aware that not only can it take years to see price appreciation, but also that the recent bull market may be coming to an end. That’s because the increased demand has prompted new distilleries to open, and that could even out the demand/supply imbalance investors have been seeing.

“The question is going to be with…a broader range of products out there, where is the value of the collectibles going to go?" asks Dave Sweet, president of event producer Whiskey & Barrel Nite. “It will always hold its retail value and will probably go up, but is it going to have a 300%, 400% or 500% increase?"

Rare Whisky 101, which has measured whisky prices since 2012, shows as of March 2024 that prices have increased 384% since it began tracking. While that’s still a significant gain, it is down from 2022’s highs when prices were up 431%, suggesting some softness in high-end Scotch values.

“My advice would be to collect for passion," he says. “Or just crack it open and drink it."

Debbie Carlson is a writer in Chicago. She can be reached at reports@wsj.com.