The appreciation in the investor’s portfolio slowly, very slowly, matures as the years roll by inside dark, musty rickhouses. It is not stocks, bonds, precious metals, or any ordinary commodity these investors are tracking, but Kentucky’s favorite spirit—bourbon.
Jeremy Kasler
These stakeholders are investing in barrels of bourbon at the very start of its aging and mellowing process, four- to eight-years out before a single drop of it is ever poured into a glass.
“We began to get inquiries about investing in bourbon, so we did some deals with distilleries in Kentucky and Tennessee,” said Jeremy Kasler, who grew up in Australia and is the founder and CEO of CaskX, an investment firm that began offering full barrels in September 2020. “Most of what we do now is in the bourbon market.” CaskX likes to say in its promotions that it “has partnered with the rising stars of the bourbon industry.”
CaskX is one of several companies and firms located both in and outside of Kentucky that offer investment opportunities in aging bourbon stocks. Kasler says today’s bourbon investment business very much mirrors the Scotch investment business of ten to 15 years ago. “People had been investing in barrels of Scotch and doing quite nicely. We were the first in the U.S. to offer barrels of bourbon for investment and helping to store, age and insure them. The value of bourbon increases as it ages. Four to eight years later it is not the same liquid originally put into the barrels.”
CaskX is one of several companies and firms located both in and outside of Kentucky that offer investment opportunities in aging bourbon stocks.
Technically, what goes into the barrels is new-make whiskey, the colorless spirit that condenses off the still through distillation. All of bourbon’s color and much of its flavor comes later as it ages in new, charred oak barrels.
Kasler explains more about the process. “We will contract with a bourbon distillery and place an order for a couple of thousand empty barrels, for example, then go to our client base and offer it for investment in small amounts such as 100 to 150 filled barrels,” he said. “Often the barrels are not filled yet. Then we help manage the barrels in the rickhouse during the aging process.”
The cost per barrel depends on the distillery and brand, but a typical price quoted by CaskX is $2,400 per barrel. That covers eight years of storage and taxes. Insurance is covered, too, in case of a natural disaster or accident. The investment’s paper trail is ironclad for the investor’s safety and convenience.
Ryan Longoria, the company’s director of sales, said a minimum sale for CaskX is 24 barrels. Major investors have been known to buy 400 to 500 barrels at a time, an investment of a million dollars or more.
“As the new make ages in the barrel, it appreciates and we can sell it for the client for profit,” explained Longoria. “The ‘sweet spot’ is anywhere from four to eight years. That is what we tell our clients to expect.”
CaskX offers investors shares in small lots of barrels, which are filled with new-make whiskey and aged for four to eight years, often appreciating in value.
Like any worthwhile investment, time and patience are necessary ingredients. “It is a diversification asset class with no correlation with any stocks, equity, or real estate. It is in a class by itself,” Longoria said. “It is for someone who wants a different investment and is willing to let their money sit for a minimum of four years. It is a form of wealth protection.”
As a new company, CaskX will sell its customers’ first designated pool of four-year-old bourbon barrels this fall.
There appears to be plenty of Kentucky bourbon barrels to invest in as the industry grows at a rapid pace. According to the Kentucky Distillers’ Association, Kentucky has 100 licensed distilleries operated by 84 companies in 42 counties. In 2022, distillers filled 2.7 million barrels of bourbon. Altogether, 12.6 million barrels are aging in Kentucky rickhouses.
“We are entering the golden age of bourbon,” said Eric Gregory, president of the Distillers’ Association. The organization commissioned the University of Louisville to study bourbon’s influence in the state. What it produced was the 2024 Bourbon Economic Impact Report, released in February. The report is updated every four years. “This study proves that bourbon, for the first time in 50 years, is enjoying more jobs, more investment and more tax revenue generated for the commonwealth than ever before,” Gregory told the Louisville Courier-Journal.
Kentucky’s advantage in the bourbon investment market is clear — economic activity. CaskX orders as many as 15,000 empty barrels a year, orders that might not otherwise be made. Its sales staff makes 1,500 phone calls a week to clients and potential clients and that promotes bourbon in general. “We are in touch with hundreds of high-spending people who are pitched Kentucky and its bourbon brands,” said Kasler. “Our offices in Los Angeles, Sydney, Australia and Hong Kong talk about Kentucky and its bourbon all day long.” Kasler adds that he is considering opening offices in Canada, South America, Asia and in Europe.
Asked what his favorite bourbon is, Kasler, being diplomatic, says he can make an obvious choice. “I love Pappy Van Winkle, but I honestly enjoy all the brands we represent. The distilleries are not just massive bourbon machines. When you meet the people behind the bourbon, you enjoy it more. The absolute pleasure with bourbon is that you can have dinner with these people and become friends.” Kasler often takes clients on VIP tours of distilleries, so they get a feel for what they are investing in. “Or, you can go buy shares of Apple, but you’ll never get to meet the people behind it.”