CRESTWOOD. Ky. (WDRB) -- An international investment firm is busting into bourbon territory by offering unique opportunities for individuals to bank on Kentucky’s spirit.
“CaskX is a bourbon barrel investment company," CEO Jeremy Kasler said. "We allow our clients to invest directly into barrels of bourbon."
It’s the same concept as with some investment firms allowing individuals to buy into race horse ownership — but with bourbon. CaskX promises smooth flavors and stable returns. The company leader said it’s a way for people to diversify their investments and for distillers to build more upfront profit.
“It’s a win-win," Kasler said. "It’s a win for the distiller, and it’s a win for the investor, because they have aces to a top commodity that didn’t exist to them previously."
Stacked six barrels high in some spots, the Kentucky Artisan Distillery warehouses are bursting with the smell of good bourbon and infinite potential. Kasler, based in Australia, toured the distillery for the first time Tuesday with distillery manager Chris Miller.
CaskX originally reached out to KAD about a year ago to discuss the possibility of allowing investors, and already, the firm is claiming about 1,000 barrels.
The company started with the same concept several years ago for scotch, and Kasler said the market is finally right to do the same with bourbon.
“The scotch barrel market has been booming over the last 10-15 years," he said. "People have made lots and lots of money. And we’ve seen the same dynamics in the bourbon industry. So it’s an exciting situation where we can get in on the ground floor before the prices really start to increase."
Kentucky bourbon has appreciated on average nearly 14% per year since 2010, Kasler said.
Interested investors will work directly with a CaskX employee, who will help identify mash bills or distilleries that would best suit the investor. The person will then purchase a minimum of 12 casks, but 48-60 is a typical purchase, Kasler said. CaskX will then be responsible for storing the bourbon for eight years.
Jade Peterson, master distiller of Kentucky Artisan Distillery, Jeremy Kasler, CEO of CaskX and Chris Miller, manager of Kentucky Artisan Distillery.
Once the bourbon is finished aging, the CaskX representative will help clients resell, bottle or distribute their portfolio to make a profit.
The minimum investment is around $20,000, and that can be done as an individual or with a group. Everyone must be an “accredited investor,” meaning they must have some experience with investing in different products, Kasler said. CaskX will handle all the legally-compliant paperwork necessary for the investor.
The distilleries involved also benefit from the partnership. Instead of waiting years to make a profit once the bourbon is bottled, distilleries can make money upfront.
“We’re buying the barrels even before it’s been filled,” Kasler said. “So what we help to do is monetize the product pretty much from day one.”
For Kentucky Artisan Distillery, that means it is able to expand to meet the growing demand much sooner than expected.
“We’re going to spend more money on this distillery in the next year than we have in the entire time we’ve been open,” Miller said.
KAD launched in 2012 and has been steadily growing ever since. Now, it plans to double production from 3,000 to 6,000 barrels next year. The bottling facility will be able to expand from 140,000 cases to 400,000 cases in a year. The distillery is also investing in new technology and building a brand new warehouse.
So far, KAD has worked on three different mash bills for CaskX, and the most recent one is a clear favorite at the distillery.
“If I say so myself, we make some of the best bourbon," Miller said. "And we did a mash bill for CaskX that myself and the master distiller agree is the best bourbon that we’ve ever produced here."
The master distiller, Jade Peterson, said the partnership with the investment firm allows the distillery to experiment while also getting new products to market.
“I’m really proud of this newest mash bill," he said. "CaskX came along at the perfect time for it."
So far, CaskX has around 100 investors from the U.S. to Europe and Hong Kong.
“It’s a great opportunity for people to get into the door in a really intimidating industry," Peterson said. "So this gives you options to get into the business from the ground up and see what it’s like from start to finish."
Click here if you would like to learn more about CaskX.
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