Cask Trade founder Simon Aron on the power and pitfalls of investing in cask whisky
Words: Will Moffitt
“Whisky ain’t uniform,” Cask Trade founder Simon Aron tells me. “You’ve got to wait,” he adds, reinforcing the point as my eyes wander across our meeting room to rows of single malts gleaming on shelves. On one wall a gigantic stag’s head stares back at me. I’ve come to the firm’s Regent Street offices where thousands of whisky samples are housed in cabinets neatly labelled and ordered like a Victorian apothecary.
Aron wastes no time dispelling some of the pervasive myths around whisky investment. Namely the erroneous claim that cask buying can deliver a quick profit or can be measured and monitored via yearly statistical performance charts. Those in search of either would be better placed finding an alternative stock on Bloomberg, he suggests, or perusing the back pages of the Financial Times. As Aron puts it: “Whisky just doesn’t work that way”.
With his extensive background in technology, commercial property and agriculture, the serial entrepreneur knows a thing or two about savvy investing. He also knows a lot about whisky, and in 2018, he turned this 25-year passion into a profession, founding Cask Trade as a marketplace for independent bottlers, private clients and whisky enthusiasts.
Naturally Aron wanted the venture to be commercially viable, but “building a whisky empire” wasn’t his primary goal. Instead, he wanted to enable all types of whisky enthusiasts to enter the market and help them avoid some of the pitfalls that he had experienced as a collector.
Back in the day his sojourns to Scottish distillers were part of a romantic hobby. Aron would simply locate a wee distillery and knock on the door. “I used to meet up with the master distiller or the warehouse manager. It was very romantic,” he recalls. “People were super nice. They'd go: ‘try a wee dram of this’”.
After amassing around 4,000 bottles Aron graduated to buying casks, a transition that introduced him to the more precarious side of whisky investment. “A lot of the people I was buying casks from didn't have a licence or a warehouse,” he explains. “They had no legal right to sell me the casks. Sometimes they could be in the wrong warehouses. Sometimes they didn't even exist.”
Below: Simon Aron, founder and CEO of Cask Trade, a marketplace for independent bottlers, private clients and whisky enthusiasts
Aron refuses to name names, but in some cases he had to seek legal assistance. The experience gave him an appreciation for the level of due diligence required when purchasing these malty assets.
A key thing to bear in mind when purchasing casks is the angle share – the natural part of the whisky maturation process as the spirit matures in an oak cask. “There is evaporation so the bulk litres reduce and the number of real litres of alcohol remain, but the older and the longer you let that cask mature, the more the angel share evaporates,” Aron explains.
On average Casks evaporate at around 2 to 3 per cent annually, but the process is far from a finite art, hence the thousands of samples that line Cask Trades’s cupboards.
“We call it a re gauge of every cask, you've got to sample it, you've got to check the ABV, the litres of alcohol, taste it, see how it's getting on,” Aron says. “A lot of people don't do that.”
Before anything else Cask Trade asks clients three questions. What are they looking to achieve? How long do they intend to keep the casks? And what are they looking to spend?
Crucially, for Aron, because the firm owns all of its stock, there’s a guaranteed exit strategy. Once the whisky is ready there’s the option of bottling your brew under your own label or using Cask Trade’s equivalent Regent Street label; or you can choose to sell it via Cask Trade’s auction site, where there’s a 15 per cent buyer’s fee.
Above all else Aron is a collector who wants others to avoid suffering the false promises he was sold. “If someone's selling you ‘identical’ casks in a big number and you can ‘buy a pallet load and get a discount’ that sends huge alarm bells,” he says. “It’s like me going to Watches of Switzerland and saying: ‘I want 10 Oyster Perpetuals, please’ or asking an art collector for five Banksy’s.
“There is no such thing as an unlimited supply. Otherwise, it wouldn't be an alternative asset. It would be like anything else.”
www.casktrade.com
