WhiskyInvestDirect - Annual Client update
I’d like to give you a quick update on the WhiskyInvestDirect business and how trading has evolved over the last six to twelve months.
Essentially, the business has performed strongly over the last year. We have seen a continued growth in investor numbers and in demand for spirit on the platform, from both existing and new customers.
From a buying perspective, by the end of calendar 2021, we will have bought approximately 2m lpa of maturing spirit. This is in line with the previous year. We will be offering 550,000 LPA for sale between now and year end. We have continued to buy from the majority of our suppliers but some have been reluctant to sell to us this year as their own internal demand has been unexpectedly strong and we expect this to continue in the short term. The industry is in good shape, as it emerges from the last eighteen months of disruption. While growth forecasts are encouraging our sector is not immune to the short term supply chain challenges being faced by many businesses.
Demand for spirit in our ‘pre-orders’ has been stronger than before. This has led to the majority of pre-orders selling out at an early stage. And those lines that do reach the main order board, with some liquidity, do not stay there for long before moving to the ‘sold out’ section.
The result of this increased demand is that the order board has very few lines that are not sold out. Trading in sold out lines continues as normal, of course, but it does mean that the spreads can be wider, up to 10%, and this requires all investors to pay extra attention to the prices at which they are prepared to trade.
Over the last year many investors will also have had notification of a bulk trade bid (BTB), or two, for a line they hold. The number of BTBs is increasing, as we expected it to, and this is a good sign that the business model is working well. When trade buyers use the platform to purchase stock it’s a signal that the prices are competitive. In addition to the 8 BTB’s (259k LPA) in 2021, we’ve also seen 28 smaller trade purchases from the platform. Combined, these purchases together with the BTB’s, amount to over 300k LPA of whisky that has left the platform and been returned to the trade. This is enough to fill over 1m bottles of Scotch.
Details of all BTB’s and Trade Purchases can be found here: https://www.whiskyinvestdirect.com/about-whisky/bulk-trade-bids
With just over 12m LPA of maturing whisky on the platform (circa 83,000 casks) the WhiskyInvestDirect business has maintained a solid growth path since launch in 2015. We look forward to continuing this growth as we head towards 2022 and beyond, and would like to thank all of our investors, and trade partners, for their ongoing support of our business.