The Price of Liquid Sunshine
Posted on 23 Nov 2023
George Bernard Shaw once described Whisky as ‘Liquid Sunshine’, an opinion that few aficionados of the golden liquid would disagree with.
For many years, it was thought that due to the distilling process the raw ingredients of whisky go through, the nuances of terroirs that apply to wine and cognac, would not have a similar effect on the overall quality of the golden substance. However a recent study aimed to remove the romantic and emotive notions behind the subtleties of Whisky, and investigate the effect of agricultural techniques, weather, soil and climate on the final product from a purely scientific perspective.
The study looked at two different barley varieties planted in two different locations in Ireland. The micro nutrients of each crop were analyzed, and found to be different between locations. Importantly, these differences were also preserved during the controlled malting and distilling stages of the whisky making process, producing different tasting products.
These differences, coupled with weather, and the age-old the skills of the whiskey maker combine to create a product that is subtle, tasty and potentially highly investible.
Value of Whisky
The relative consistency and growth of the value of Whisky has been attracting investors, tempting them away from the more traditional investments in gold as a tangible asset, with record breaking sums being paid for the finest examples:
A four-decanter lot of Glenfiddich single malt whisky from the 1950s was recently auctioned at a charity event, reaching a sober £830,000, setting a record for Glenfiddich sold at auction.
A collector from Asia paid £16 million for a ‘one of a kind’ 1975 cask of Ardbeg single malt Scotch Whisky – a world record figure for any whisky sold at auction.
With the current economic situation looking uncertain, combined with rising inflation, unstable international exchange rates and the prospect of recession, any asset blacked investment is looking increasingly attractive to prudent investors.
Scotch Whisky has an export value of £6.2billion per year, representing 37% growth since the previous year. There are an estimated 53 bottles of whisky exported from Scotland every second, with 1.67bn 70cl bottles having been exported in 2022, covering 174 global markets.
Investors tend to be attracted to the single malt variety of whisky, produced in Scotland. Other varieties such as blended and Irish whiskies do not tend to generate the same enthusiasm. Other factors also tend to make certain varieties more palatable to investors, these include the actual distillery that produces the golden liquid, along with the taste characteristics - those matured in sherry casks that are darker in color are at the top of most investor’s lists.
Investors are attracted by both bottles of the final product, along with casks that are still maturing. A broker typically strikes a deal with a distillery for a limited run of casks at a discounted price. The broker then sells casks, which are then stored in a secure bonded warehouse and insured, to investors.
The Effect of Weather
The taste of whisky, and the climate that it is produced in are closely intertwined. Temperature plays a defining role in the flavor of the final liquid. The location of the barrels, both in respect to the warehouse, and the country of origin can make an immense difference.
The term ‘angel’s share’ refers to the volume of whisky lost to evaporation during the aging process. The climate dictates how much of the angel’s share is water, and how much is alcohol as they evaporate at different rates.
For example, when a whisky is aged in a warmer environment, such as a certain variety from Kentucky in the USA, the water content evaporates quicker than the alcohol, meaning that the whisky is mature at a younger age. In Scotland (and parts of Japan), with a relatively more humid and cooler environment, the alcohol evaporates gradually, and slightly more than the water, meaning that more time is taken for the maturing process.
Warmer temperatures also affect the casks themselves. When the temperature exceeds 38C, the pores in the wood expand, drawing more of the flavor enhancing compounds out of the maturing whisky. When the temperature drops, the pores contract, releasing them back into the liquid. Understanding the overall fluctuations in temperature can help the whisky maker keep the taste of their product of a consistently high quality.
Both temperature and atmospheric pressure play an important role in distilling, and having an accurate pre-warning of their relative levels is a key factor in the overall process. During distillation, where the liquid evaporates and condenses after the initial fermentation process, it is important to separate (or ‘cut’) the distillate at the right time. This ensures the right volume of flavor enhancing compounds in the spirit that will go on to be matured in wooden casks. The ambient temperature at the time of distillation can affect when the ‘cut’ is made.
Understanding the historical fluctuations in the weather can also help those countries with less of a history in whisky production start to consider the possibility of starting their own industries. New distilleries in India are utilizing their relatively hot and humid environments to produce a mature whisky in only six years, that would take their Scottish counterparts at least ten.
Even in Scotland itself, the previously consistent climate is changing, meaning the age-old techniques honed over centuries will inevitably need to adapt to the fluctuations in the weather, both short and long term.
A number of whisky aficionados agree that after the sunshine is bottled and sold, the new owner should always try to keep their supply in cool and consistent conditions. Although there is some disagreement over this, it is possible that the sunshine outside the bottle will affect the liquid sunshine inside.
The Effect of Technology
Whisky production has always been a very organic process. The distiller’s skills of deciding when to make the cut are dictated by taste and smell rather than any artificial means. There is a common phrase used in the process - “you can’t cheat time” - the maturing process of turning a harsh, young spirit into a smooth and mature whisky can only be accomplished by patience (and skill). Even the selection of the wooden casks that the liquid matures in is an age-old craft, learnt by years of experience.
There is however, more to the whisky industry than purely the skillful production process. Marketing, sales, global distribution, storage are all key, albeit not perhaps as romantic, elements as the distilling process.
Scotland can have very inclement weather at times, and ensuring the distribution process is as smooth as the product itself is of constant concern to the distilleries.
With recently record breaking summer temperatures, distillers can also monitor the likelihood of any weather conditions that may cause damage to their valuable product. The feature-rich OpenWeather One Call API 3.0 gives daily aggregated forecast data for the next 1.5 years.
The OpenWeather Road Risk API can help distilleries manage their road distribution networks, ensuring that their often remote locations are not a factor in getting their product to their distributors.
As with many agricultural based industries, whisky is facing changes due to climate change, but is embracing new technologies that compliment the traditional methods. Understanding the weather with OpenWeather products gives today’s distillers an advantage their predecessors could never have dreamed of.
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