Investment in Karuizawa Whisky

History and Market Potential of a Closed Japanese Distillery

Discover the history of a legendary Japanese distillery and the potential of investing in Karuizawa whisky. Situated in the picturesque Mount Asama region, the history of the Karuizawa distillery, founded in 1955, reflects the excellence and uniqueness of Japan’s finest malt whisky. From its skilful production to its coveted position as a collector’s item and investment. In this article, you will learn how Karuizawa has become a symbol of quality and exclusivity in the global whisky market and the investment potential it offers.

Karuizawa Noh Single Cask – 41 YO

Karuizawa Shibari Collection – 35 YO

The history of the Karuizawa distillery

Founded in 1955, the Karuizawa distillery, located near Mount Asama in Japan, was known for its first-class malt whiskies. The combination of a cold climate and an abundant supply of meltwater on the Asama volcano provided the ideal conditions for the production of unique whiskies. In the 1970s, the distillery produced its first 100% domestic malt whisky, with the small size of the casks and stills contributing to the exclusivity of the whisky. The quality of the whiskies was excellent, but the decline of the whisky industry in the 1980s and 90s ultimately led to the closure of Karuizawa in 2000. Not least due to its exciting history and the subsequent cessation of production, Karuizawa whisky is now a sought-after collector’s item with investment potential.

Stylistic proximity to Scotch and flavour profile

Famous for its floral aroma and complex flavours, Karuizawa is often described as the closest Japanese whisky to the Scottish style. Karuizawa imported Golden Promise barley from Scotland, which was favoured there and gives the spirit an oily texture. Maturation in ex-sherry casks gives the whisky characteristic notes of dried fruit, leather and walnut, while casks from the USA add toffee and caramel flavours. The Scottish-influenced approach and the production of a single style of whisky set Karuizawa apart from other Japanese producers such as Suntory and Nikka. This production method has given the closed distillery a unique position in the whisky market to this day.

Exclusivity through limited production

Karuizawa whisky is a prime example of exclusivity in the spirits market, and this rarity is a decisive factor in its high collector’s value. As one of the smallest distilleries in Japan, Karuizawa only produced around 150,000 litres a year, which illustrates the exclusivity of this spirit. Its whiskies are among the most sought-after Japanese whiskies, and not just because of the closure of the business over two decades ago. Only very small quantities of each variety were bottled, sometimes less than 100 bottles per batch. This has made the existing bottles even more valuable, as they are truly pieces of a bygone era.

A new chapter: release of Karuizawa’s exclusive remaining stock

Although no new production has taken place since 2000, a small but significant amount of Karuizawa whisky remained. These remaining stocks were bought up by a group of investors in 2015, who have since launched bottlings in limited and extremely sought-after editions. The vintage series of the exquisite whisky and its export to Europe have helped Karuizawa gain new global recognition. An investment in Karuizawa whisky therefore not only harbours financial opportunities, but also carries with it a decisive piece of whisky history.

Japanese whisky on the upswing: rising demand meets limited availability

Just a few decades ago, Japanese whisky was considered a mere curiosity, but today it is in direct competition with Scotch whisky and often outperforms it in international competitions. Despite the flourishing whisky business, there are not many distilleries in Japan. The largest producers of whisky from Japan include Suntory and Nikka, but it is Karuizawa that is considered the gold standard.

Suntory only announced an increase in whisky prices at the end of 2023. The distillery cites the increasing popularity of Japanese whiskies as the reason for this – both nationally and, above all, internationally. The long production time makes it difficult to meet the enormous global demand. In order to cover the costs of increasing both quantity and quality, a price increase is unavoidable.

What is so special about Japanese whisky?

Investment in Karuizawa whisky is benefiting from the general upturn in the Japanese whisky market. There are several reasons that contribute to its growing popularity and recognition:

The Karuizawa market: investment history and price development

If you take a look at the average prices of currently available whiskies, rare Karuizawa bottlings secure a place in the world’s top 25 most expensive whiskies. Although the list (Wine-Searcher, February 2024) is still dominated by Scottish single malt, the growing potential and importance of Japanese whiskies in the international collectors’ market is evident.

Karuizawa not only stands for excellent quality and rarity, but also has an impressive history of appreciation and return on investment. A clear indicator of this is the comparison of current market prices for Karuizawa with those of a few years ago: According to the Rare Whisky 101 Index, The Karuizawa Index has risen by an impressive +430% since its inception in 2014. The historical price development of Karuizawa whisky indicates strong long-term investment potential. As new bottles are no longer being produced, existing stocks are expected to continue to rise in value.

Karuizawa Dekanta 35 YO

  • In 2018, ‘Cities of Japan’ was offered for $75,000. Since then, the Karuizawa index has risen by +174 %.
  • Six different editions on six Japanese cities: Nagoya, Osaka, Sapporo, Tokyo, Yokohama, Kobe – an investment in Japanese culture.
  • Extremely limited: Only 23 bottles of ‘Tokyo’ and 20 bottles of each of the other cities are available worldwide.
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Karuizawa whisky achieves these results at auction

Karuizawa has achieved record prices at auctions worldwide. These auction results reflect not only the high demand, but also the potential of investing in Karuizawa whisky.

Just at the end of last year, in November 2023, a Sotheby’s auction set a new record for the most expensive collection of Japanese whiskies ever auctioned.
The ‘Kodawari | The Greatest Japanese Whisky Collection’ achieved total proceeds of just under £1.8 million. The collection consisted mainly of single Karuizawa bottlings as well as rare whiskies from the Yamazaki, Hakushu, Yoichi and Hanyu distilleries.

The highlight of the auction: a bottle of Karuizawa 52 Year Old Cask #5627, 1960, which sold for £300,000. The top lots included a Karuizawa trio from 1965 and a bottle of Karuizawa Aqua of Life 45 Year Old.

The Timeless portfolio includes a 50-year-old bottle of the iconic Aqua of Life series – one of the oldest Karuizawa whiskies. With only 347 bottles in total, it is strictly limited. The drop price is 8.3% below market value.

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The record for a single bottle of Karuizawa was set in March 2020, when the Karuizawa 52 Year Old Zodiac Rat Cask 1960 also realised £363,000 at Sotheby’s. This made it one of the most expensive whiskies in the world.

What is important when investing in Karuizawa whisky?

When investing in Karuizawa whisky, it is crucial to accurately identify the specific bottle. Knowledge of the specific edition, including the age, year of release, alcohol content and maturation period, is essential for a correct valuation of Karuizawa whiskies. Numerous editions have been released over the years, and the specific version of a bottle plays a significant role in its value. Factors such as the condition of the bottle, labelling and fill level are also crucial in determining value.

Many do not have the necessary resources and networks to do justice to the complex investment evaluation in this complex market. With Timeless, you can now invest in a wide selection of unique whiskies conveniently and securely via app. Our experts take care of the selection, storage and maintenance of the collector’s items and the profitable resale.

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