Japanese whisky draws collectors thirsty for fun, profit

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Japanese whisky draws collectors thirsty for fun, profit

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https://asia.nikkei.com/Business/Food-B ... 0&si=44594

Japanese whisky draws collectors thirsty for fun, profit
Suntory brand rises 50% in past two years as COVID attracts speculators

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Previously, whisky collectors were generally wealthy people who sought rare and expensive vintages. The COVID pandemic has brought in speculators looking to make a quick profit. © Reuters
HIROKI MASUDA, Nikkei staff writerAugust 7, 2022 14:30 JST

TOKYO -- Trading prices for popular Japanese whisky brands have risen 50% over the past two years amid a general rise in prices for the spirit.

Whisky consumption is rising, thanks to its versatility for the home market: There are many brands and it can be enjoyed in many ways. Enthusiasts gravitate to specific whiskies based on everything from how they are made and their age to bottle designs. Some collectors are more interested in owning bottles than in drinking the contents.

One man in his 50s in Saitama Prefecture, north of Tokyo, epitomizes the trend. He said his passion for collecting whisky bottles has grown so intense that he searches online daily for new ones to buy.

He sometimes spends tens of thousands yen (several hundred of dollars) buying whisky online or at brick- and-mortar shops. Viewing his collection of mini bottles at home is a joy, he said. "I became a serious collector just about a year ago," the man said. "I first read about a limited sale of a Japanese whisky brand and my interest grew from that point."

Surprisingly, he is not a drinker. He simply enjoys collecting different brands, delighting in subtle differences in bottle designs. "Whenever I find a mini bottle that I don't have, I want it," he said.

The growing popularity of whisky is evident in the rising prices offered by resellers to those willing to part with bottles of alcoholic beverages. Joylab, one reseller inTokyo, offered 10,000 yen ($76.50) for a 700 milliliter bottle of Yamazaki, a single malt whisky brand from Suntory, in June. That was 2,500 yen, or 33%, higher than for same month a year ago and 3,500 yen, 54% more than same month two years earlier.

A 700 ml bottle of Hakushu, another Suntory's single malt, fetched 8,000 yen, up 3,000 yen, or 60%, from two years earlier.

These brands are nonvintage products. Still, Japanese whiskies, which must undergo saccharification -- the breaking down of carbohydrates into ethanol -- fermentation and distillation at a Japanese distillery, are popular with connoisseurs and command a premium.

Whiskies were once seen as a plaything for wealthy collectors eager for rare and pricey vintage products. The current fad for Japanese whiskies began in China around 2015. Some change hands at substantial markups and can be hard to obtain.

Then speculators piled in -- people looking for a place to put their money as the COVID-19 pandemic raged. Reports of a Japanese whisky fetching tens of millions of yen at an overseas auction also put Japanese whiskies in the spotlight. More recently, consumers of more modest means have begun collecting Japanese whiskies, expanding the breadth of the demand.

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Whisky collectors choose products based on everything from production methods to bottle design.

Consumer demand is also driven by the growing trend toward drinking at home. On social media, many people enjoy sharing their knowledge of whisky, according to Joylab President and CEO Keisuke Ota. "Hurdles have come down and it's now easier" for people to access information and enjoy whiskies, which encourages people to drink whisky, Ota said.

The growing crowd of whisky enthusiasts on social media has, in turn, led to demand from people hopping on the collecting bandwagon, whether or not they actually consume them.

"As information is becoming more easily accessible through diverse media, people are having fun boasting of their knowledge and finding their own ways of enjoying" the product, said Ryo Hirose, a researcher at Tokyo think tank NLI Research Institute.

"Owning Japanese whiskies and boasting about one's knowledge of them is like a high social status thing for some people," said Tomohiro Toma, who manages the Kasukabe branch of Daikokuya, chain of secondhand shops.

This is not so different from earlier booms in trading cards and sneakers. It appears that people's hunger for knowledge, which might have been sated by things like travel, is being directed toward objects due to the pandemic.

Because age is a key determinant of how much a whisky is worth, the supply of a sought-after brand does not increase overnight. This contributes to the hot market. The flavors of a single batch can also vary, even if the whisky matures in casks made of the same material and under the same storage environment.

As different casks can result in different flavors, distillers cannot easily replicate them. Suntory is a large producer and has the resources to invest in the best production equipment, but it still has not "been able to respond to all types of demand," a company spokesperson said.

As supplies remains tight, some speculators buy sought-after bottles in order to resell them at a higher price on flea market apps. The temptation to sell counterfeits online is strong. The Japanese whisky fad, while generally good for business, has raised concerns among many in the industry.

Retailer Bic Camera is working to introduce measures, such as selling popular whisky brands to customers by lottery as a way to ensure that "whisky lovers can purchase products in a fair environment, given the rise in purchases for reselling purposes," according to a company spokesperson.

"Purchase prices have already reached high levels and I don't see much possibility for them to go up much further," said Joylab's Ota. He thinks the market may cool as consumers are pushed out of the market by rising prices. The end of the Japanese whisky boom may be on the horizon -- or not.
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