Trends Watch: Investing in Aging Spirits

EisnerAmper’s Trends Watch is a weekly entry to our Alternative Investments Intelligence blog, featuring the views and insights of executives from alternative investment firms. If you’re interested in being featured, please contact Elana Margulies-Snyderman.   

This week, Elana talks with Todd Camhe, Co-Founder, General Partner, Oak Proof LLC.  

What is your outlook for investing in barrels of aging spirits and specifically bourbon? 

The current climate in the spirits market is certainly one of mixed signals. We’re seeing some decline in overall spirit consumption, particularly in the mass-market segments, and large brands are struggling to some degree, as evidenced by recent reports in The Wall Street Journal. However, this is exactly why we view this to be a great time to deploy capital and invest in bourbon barrels. 

While the broader market may be facing some challenges, the premium bourbon sector remains strong. There is still a growing interest in high-quality bourbon, driven by consumer demand for authenticity, craftsmanship, and unique flavor profiles. Some of the larger brands may be underperforming, but smaller, craft distilleries and premium offerings are continuing to attract attention from consumers. 

From an investment standpoint, bourbon barrels represent an asset class with characteristics that are particularly attractive in uncertain times. Barrels age over time, increasing in value, which means they’re insulated from the short-term volatility we might see in more traditional assets. At Oak Proof, we’re bullish about this long-term growth.  

Where do you see the greatest opportunities and why? 

The greatest opportunities in the bourbon market right now lie in two key areas: strategic barrel acquisitions and the growth of international markets. As bourbon continues to grow in global demand, particularly in emerging markets like India and China, there is a significant opportunity for us to capitalize on this expansion. These markets are seeing a rapid increase in demand for premium and craft spirits, driven by a rising middle class with greater disposable income and an increasing appreciation for Western luxury products like bourbon. 

We take advantage of this international growth by securing high-quality inventory through our long-standing relationships with trusted distilleries. These partnerships allow us to access barrels that are poised for substantial appreciation in value as global demand increases. 

In addition, our focus on the long-term, patient approach to barrel investing ensures that we’re prepared to meet the growing need for well-aged bourbon in both domestic and international markets. This combination of strong industry relationships and an eye on global expansion offers significant potential for investors. 

What are the greatest challenges you face and why? 

One of the biggest challenges in bourbon barrel investing is staying aligned with changing market dynamics. While we’re optimistic about the long-term growth of the bourbon market, we must remain vigilant about shifts in consumer preferences and broader economic factors that could impact demand. Changes in how consumers view premium spirits, or broader trends in the beverage industry, can influence the types of barrels that will hold their value over time. 

Another challenge involves navigating the complexities of the market itself, which can be affected by regulatory shifts, trade dynamics, or unexpected changes in global demand. These factors are out of our direct control, but they require us to stay proactive and adaptable to ensure the continued growth of our portfolio. 

Ultimately, the key challenge is balancing short-term and long-term objectives. Managing the timing of investments and staying patient with market shifts is always top-of-mind. 

What keeps you up at night? 

I’m just hoping the barrels don’t start plotting a rebellion and turn into vodka or tequila while I’m not looking. But in all seriousness, it’s staying ahead of market shifts and making sure we’re positioned for long-term success. The barrels don’t keep me up, but the market sure can! 

The views and opinions expressed above are of the interviewee only, and do not/are not intended to reflect the views of EisnerAmper.