Whisky lovers around the world are snapping up bottles of aged Scotch so quickly that prices are reaching an all time high.
Distilleries are ramping up production to help meet demand, but it’s not fast enough as collectors of older vintages face continually escalating prices for coveted single malt Scotches, reports CNN Money.
"The shortage of old and rare single malt ... has already started, and it's going to get worse," Rickesh Kishnani, founder of the world's first whisky investment fund, told CNN.
Scotch has always been produced in limited quantities but in the late 1980s, many distilleries started going out of business. Exports of Scottish whisky have been stagnating but global demand for the spirit has escalated dramatically in the past decade.
In the U.S., sales of single malt Scotch (which is whisky made from the product of a single distillery rather than a blend) almost tripled between 2002 and 2015, according to the Distilled Spirits Council of the United States.
Demand in Asia has also sky-rocketed, and it now accounts for one-fifth of all Scotch exports annually.
"In China, everybody is talking about it," Stephen Notman of the Whisky Corporation, a whisky investment firm, told CNN Money. "Nobody thought in a million years that there would be a market there for 30-, 40-year-old whisky."
One example of the dramatic price increase is seen with a 30-year aged Black Bowmore whisky, first released in1994. It initially went on sale for $110 a bottle. But, according to Notman, the prized liquor can go for $7,000 at auction today.
In 2014, the world's most expensive Scotch was sold at a Sotheby’s auction in Hong Kong-- a large crystal decanter holding Macallan "M" whisky went for $628,205.
Instead of looking to the stock market, savvy investors have begun snapping up bottles of single malt Scotch. According to the Investment Grade Scotch Whisky Index, whisky prices climbed 14 percent last year, beating other traditional assets like gold. The value of Kishnani's whisky fund, which is based in Hong Kong and boasts an impressive collection of about 7,500 bottles, has increased 26 percent since it started in 2014.
Producers are now working furiously to keep up with demand.
"We are currently working at full capacity… seven days a week, 24 hours a day,” Charlie Whitfield, a brand manager for Macallan, told CNN Money. "We just need to be patient and allow those casks to work their magic."
Macallan plans to open a second distillery by early 2018. But by law, all Scotch whisky must be aged for a minimum of three years so the bottles won’t be released for awhile. Some distilleries, including Macallan, Highland Park and Glenlivet have started releasing bottles without disclosing the whisky’s age on the label but highlight the woods used in the aging process. The move helps keep shelves stocked and allows companies to better control premium bottle prices in the future.
Despite distilleries efforts to boost production, experts say the shortage—and continuing price escalation-- could last 10 to 15 more years.