EP.86 BOURBON as an INVESTMENT with MARK GARBIN

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With interest in alternative asset classes at an all-time high, the focus of family offices and other investors has been to investigate more “liquid assets.” We’re not talking about cash or oil . . . the spirits world has produced scores of profit stories at the asset class and business level. Bourbon is a niche that has been on fire recently. With a low interest rate environment, private capital’s huge appetite for “uncorrelated” asset classes, and a theme that is a haven for entrepreneurs in Kentucky and beyond, this is a good time to investigate the bourbon space. It is more than just Jim Beam, Maker’s Mark and Wild Turkey. (FYI- Jack Daniel’s is technically a Tennessee Whiskey and not a bourbon). To get our arms around the subject, I spoke with MARK GARBIN and centered the discussion around bourbon.

MARK is an investment management executive focusing on fiduciary duties issues in investment vehicles for public and private funds.  He is a CFA charter holder and professional risk manager.  More importantly, he is an expert on bourbon and whiskey both from a quality and taste perspective and as an asset class. He is the author of many books including his new book “Whiskey Glory” – about the rise of the Dewars famous lineup.

We take a deep dive into bourbon as an asset class- actually owning the liquid inputs and deriving yield from them- to investing in a bourbon company. Finally, we get into some of the fun stuff around the great tasting bourbons and terrific whiskey bar experiences that Mark knows well. This podcast is so chock full of information that I’m having a transcript done (which will be coming soon). in the meantime, the outline is below. Enjoy!

A little background on Mark

How did you get involved in Bourbon?

Becoming a sommelier and writing about “Whiskey and Romance” in NYC

Different classifications and ways to learn about the bourbon subject – rex videos

Bourbon as an asset class

Why is Maccallan 18yr whiskey at $350 vs the 25yr $3500

How does a barrel program work?

Expected returns?

Fixed Income attributes (and risks)? How do warrants factor into a barrel program?

Bourbon as a Business

What makes for a good whiskey company and brand?

A brief discussion of the antiquated 3 tier system (manufacturing, marketing, 3rd party distribution) reduces profit for the producer- and why a direct link to consumers is vital now.

The legal and distribution landscape is changing.

Digitialization of marketing (and the rise of direct distribution)

Experience of Bourbon at Source- great bourbon at the experience level-

Good to visit, bad to distribute- lots of “limited release”

The rise of goodwill, the mailing list and the repeat buyer

Brand is vital and important to the exit strategy

The Bourbon Experience

Favorite Places

Favorite tastes

How do we stay in touch? 

MARK GARBIN

Twitter: @CoherentCapital

Where do we find the book?

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