Blacks Brewery and Distillery launches whiskey investment fund with guaranteed returns

Kinsale firm Blacks Brewery and Distillery believes it has come up with a way for investors to combine their love of Irish whiskey and a desire for a market bet.

Blacks Brewery and Distillery launches whiskey investment fund with guaranteed returns

Kinsale firm Blacks Brewery and Distillery believes it has come up with a way for investors to combine their love of Irish whiskey and a desire for a market bet. The husband and wife team of Sam and Maud Black set up the firm in 2013, offering consumers award-winning gin and Ireland’s first and only rum.

They have now launched a whiskey investment fund that claims guaranteed returns at the end of five years. After investing in two copper stills, Blacks Whiskey Founders Club is giving the first 500 whiskey and spirit enthusiasts the chance to purchase their very own cask, starting from €6,500 and resulting in around 400 bottles of their own pot-stilled single malt Irish whiskey.

According to Irish Spirits Association figures, whiskey comprised 42% of Ireland’s beverage exports in 2018 and the figure is expected to rise exponentially in the coming years. After five years of maturation, investors may decide to have their whiskey bottled for keeps, or alternatively, if they wish to sell their casks back to Blacks, they will receive a minimum 4% annually compounded, or around €280 a year per cask, return on their initial investment, according to the company.

Mr Black said: “It has a guaranteed minimum return that is better than any bank at the moment.

You can never predict what will happen, but we believe with the rise in value of Irish whiskey, there is actually potential for a much higher return. There are options after the end of the five years, on top of the guaranteed minimum return.

“For us, it gives us access to capital as we try and scale the business, plus it gives us brand ambassadors. We’ll have 500 people that we have a good relationship with. We’ve sold to commercial entities like bars and restaurants with options for co-branded opportunities.”

The company has so far sold into Australia and into the US and believes there is a good market for bars in the US with co-branded whiskey on the shelf, tapping into the cultural ties with Ireland. He said there is a finance package available to include people who might not necessarily be investors or have the necessary cash to hand.

The company has struck a contract with a finance company. The interest paid on the loan could be lower than the eventual returns at the end, Mr Black said.

“If 300 or 400 bottles of whiskey — which is what the average cask produces depending on the cask strength — is too much to handle, then Founders Club investors have the option to sell their entire cask back to the distillery at the predetermined agreed value with a 4% per annum compounding return on investors’ initial purchase.

“Based on one of the casks available, this return equates to a compound annual growth rate of 4% per year or a total gross return of 21.7% for the five-year period,” he said.

Members also have the option to extend the maturation for additional years and allow the whiskey to continue to mature and grow in value as it ages, the firm said. Membership is now open, with production due to start in January 2020. Members can request to be present in the distillery on the day of distilling or cask filling, and once a year will be invited to Kinsale for the weekend to visit the distillery.

It is a far cry from the Valentine’s Day gift that Maud presented Sam some years ago. She gave him a home brewing kit, sparking their passion for brewing. This hobby developed into an obsession, they said, and in 2013, Blacks Brewery was founded. In 2015, a distillery was added to the site and they began producing a range of Irish craft spirits. Currently, Blacks produce a range of beers, gin, and Ireland’s first and only rum.

Mr Black said: “What Maud got me for Valentine’s Day was very basic, an almost entry-level homebrewing kit. It was my first introduction to making beer, and I fell in love with it. I enjoy cooking but you’d spend hours cooking before all the food would be gone in minutes, to be left with washing up. But you’d spend the same time brewing and it could last you months on end, and a lot of fun to be had.”

He said the distillery is an extension of what was originally a hobby.

“When we started the business, there were not a lot of microbreweries, it was before the big boom. We thought there was enough of a market to sustain a business,” he said. Maud Black said the firm was established at a good time for the industry, which was then on the cusp of a worldwide boom. “There were 15 when we started and around 65 or so now. A lot more came along the year after we started.

“In that way, we were very lucky as we got in ahead of the curve and were able to establish in a lot of the larger retail channels early on, which made it a lot easier. It’s a great time to be involved,” she said.

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