The whiskey market is a US$ 80 billion industry globally, and it is estimated to grow even more in the coming years. As the whiskey industry continues to expand, it is also giving birth to new branches of opportunities for investors and everyone else involved. And one of these promising investment prospects is whiskey cask investment.
Over the years, distilleries have traditionally sold whiskey casks to insiders, large bottlers, and institutions. The distilleries are heavily cask-reliant to generate the funding required to run daily operations, along with the financial resources available to them. On the other hand, until now, private individuals didn’t have that privilege and couldn’t invest in the casks due to a number of limiting factors.
By collaborating with leading distilleries and enabling accredited individuals to purchase the barrels, CaskX has innovatively made whiskey cask investment more accessible. To the benefit of investors, much like whiskey, the investment also gets better with time. Through decades of experience in the form of its team of collectors, analysts, and investors, CaskX has made notable strides in the whiskey industry.
Leading the talented team at CaskX is its Founder and CEO, Jeremy Kasler. And he is the person featured in our latest issue of The Enterprise World. Inside the issue, he expresses his thoughts on CaskX, how the company tackled startup challenges, his vision, and more.
Bridging the Gap between Finance and Spirits
CaskX is a firm that specializes in helping investors acquire portfolios of whiskey casks from distilleries across the United States and Scotland. The company was founded with the goal of becoming a leading platform for whiskey investment while uniquely bridging the gap between finance and spirits.
Because whiskey production is highly capital-intensive, without the necessary financial resources, its lengthy maturation process could overwhelm the distillery before the liquid is ready for sale. CaskX solved this problem by enabling distilleries to generate immediate cash flow by selling newly distilled whiskey casks to investors.
CaskX offers a win-win solution that allows investors to leverage the aging whiskey as a robust diversification strategy providing the increased security of a tangible asset while the distillery also benefits from generating immediate cash flow.
Biggest Challenge at the Start
The United States has complex securities laws. When CaskX entered the U.S. market, complying with the intricacies of these laws was the biggest challenge. Because the laws are designed to protect the investor, navigating through them was of the utmost importance. Despite requiring a significant investment of resources and time, CaskX went over and above to ensure full compliance.
Distillery Partnerships
Choosing the right distillery partners is the key to success, says Jeremy. As the company aims for success, it examines three primary factors: the people, the product, and the story. CaskX seeks distilleries driven by passionate individuals whose expertise and dedication contribute to uncompromised product quality.
CaskX especially values having a distillery partner with an engaging story, as it adds a layer of depth and authenticity to the brand and overall whiskey experience. Each partner must exhibit these characteristics in order to be selected as an offering to investors in order to retain the reputation of CaskX as the whiskey industry benchmark, while also providing an enriching whiskey experience beyond just financial returns for investors.
Widespread Portfolio
CaskX offers a broad selection of investments including full casks of American Whiskey, Bourbon, and Scotch Whiskey. The team provides complete portfolio management of the assets, from acquisition to exit.
The process starts with the team of specialists curating the portfolio in such a way that it achieves the financial objectives of the individual client. Then the storage of the assets is facilitated in a government regulated facility and insurance coverage for the casks arranged. As the liquid ages the CaskX team monitors the spirit to ensure its value is maximized over time.
When the investor decides to exit their investment, CaskX assists with cask monetization through its exclusive network of whiskey buyers around the globe. The company also offers an unparalleled level of transparency to its investors through its leading edge online client portal that puts portfolios at the fingertips of each investor. Throughout the process CaskX prioritizes third-party oversight with inspections and independent verification to protect client interests.
Ensuring Transparency
Investors today have a continued focus on transparency and oversight in light of events in the broader investment space. Since the beginning of the company, CaskX has been committed to providing industry leading levels of control over holdings. Every investor receives detailed information about the investment process, potential risks, returns, and all relevant information.
CaskX provides all the legal documents to investors and an online portal that is accessible 24*7. Furthermore, clients are regularly notified and updated about the progress and performance of their investments. This encompasses reports detailing the status of their casks, fluctuations in value, and storage conditions.
3 Differentiating Factors
1. Distillery Direct Relationships
CaskX works directly with distilleries to acquire the whiskey casks sold to investors. These relationships provide access to a diverse range of high-quality barrels and offer guaranteed provenance of the assets. Moreover, investors can even tour the distilleries to experience their investments first-hand.
2. Transparency
All the details are pre-verified before the investment is offered, ensuring the utmost transparency. That includes the mash bill, cask types, volumes, storage locations and insurance coverage. Furthermore, the company conducts annual physical stock inspections by third-party accounting firms and delivers the reports to clients.
CaskX strives to put investors in complete control of their investments. Through the online management portal, investors can access ownership certificates, and inspection reports, or monitor their holdings to initiate a sale when it is time to exit.
3. Financial Focus
Through decades of experience amassed in alternative investments, the CaskX team offers expertise in building portfolios aimed at achieving strong returns across economic cycles. Taking a financially minded approach, CaskX identifies optimally placed whiskey casks that could increase in value over the holding period. This includes carefully vetting the distillery products and their quality, the strength of the distilling team and estimated future demand across international markets.
Expanding the Offerings
By leveraging technology even further, CaskX plans to take the company and the industry to the next level. One such step toward that goal would be the introduction of its own whiskey bottles. The company wants to present whiskey in a way that takes you back to when craftsmanship and quality were the only factors that mattered. In addition, CaskX envisions continuing the legacy of pioneers such as Julian Van Winkle as it moves forward.
Why CaskX?
The first priority of CaskX is to offer maximum returns. However, investors can also access complimentary benefits such as behind-the-scenes tours and exclusive whiskey bottles. For those passionate about the art and craftsmanship of whiskey, cask investment could offer an outlet to get closer to the industry by taking direct ownership of the liquid of tomorrow.
Financially, historical returns have ranged between 12% and 14% annually. With high inflation levels and volatile traditional markets, investors could find the stability of tangible assets in the form of whiskey casks a compelling strategy to secure their portfolios.
The CaskX Culture
At CaskX, the collaborative culture and open communication contribute to a positive and productive work environment. By valuing and highlighting employee achievements, providing feedback, and conducting performance evaluations, CaskX aspires to support individual growth to improve continuously. According to Jeremy, emphasizing these achievements helps the team stay motivated, and engaged while helping them reach their full potential.
The Key Figure of CaskX
As the CEO of CaskX, Jeremy Kasler is the key decision-maker and aims to lead the company toward a better future. That includes negotiating deals with the distilleries and helping the staff stay motivated. While he trusts every staff member with their decisions, he keeps communication lines open with those who provide input and support.
As the business grows, getting clarity on the smallest things becomes challenging, says Jeremy. However, he believes perfecting the details is critical to achieving success. To elaborate, with an example: I pay close attention to the interactions between members and investors to ensure the highest levels of professionalism and service in all communication.
Key-Achievements
Jeremy has a decorated portfolio spanning the fields of wine, art and real estate. After successfully exiting two businesses from these sectors, he made his latest foray in the investment world with the launch of CaskX in 2019. Each of his businesses has been a front-runner, establishing new investment classes for investors that were largely unexplored before.
Jeremy finds it extremely rewarding when his businesses introduce assets to investors that they wanted to invest in previously but couldn’t, and through these holdings they can build their wealth and achieve their personal goals. Beyond the success of the businesses and investors, he views the relationships built over the years as his top achievement.
Staying Up-To-Date
Jeremy reads many industry magazines and websites. He also frequently travels to distilleries and tradeshows. While publications are important to stay up-to-date with industry developments, Kasler believes meeting people in real life helps to see the bigger picture. He says, interaction with these people also gives you a better perspective on the current industry state.
Advice to Industry Leaders
“Try to be pragmatic, don’t burn your bridges. Try to keep positive relationships with everyone, as you never know when those relationships might play a role in the future of your business. Invest in quality staff.”
