May 23, 2023
San Francisco, USA
The latest trend sweeping the internet is NFT. NFTs have taken the tech world by storm. Recently digital artist Beeple's NFT was sold for $69 million at a Christie's auction; before that, Twitter CEO Jack Dorsey's first tweet was auctioned off for $2.9 million. You're probably wondering, "how can someone sell a tweet" or even "what does this have to do with the wine world." Well, Suddenly, NFTs are all around us and are attached to everything from digital art, music, sushi, sports, and now even wine.
NFT stands for non-fungible token, which simply means a non-replaceable token. "Nonfungible" implies that something cannot be exchanged for something of equal value. For example, two $10 bills can be exchanged for a $20, meaning they're fungible. NFTs cannot be exchanged, and hence, they're one of a kind. "Token" can be any digital (or even real-world) item. That digital item could be a song, an image, or a video. It could even be an experience. NFT's are held in the blockchain, an incorruptible digital ledger of transactions. It can be applied to any tangible asset: art, watches, yachts – or wine. NFTs come with certificates of ownership and authenticity which, because they exist on the blockchain, cannot be hacked or cloned – in theory, at least. While digital items can be endlessly replicated and copied, the certificates of ownership and authenticity cannot. These are what give NFTs their true value.
Wine is one of the best-performing alternative assets. Wine outperformed the stock markets, real estate, classical art, which has about 240% growth over ten-year periods. Wine NFTs can represent a cultural value (like an exclusive or limited-edition piece of art), but they also have a commercial value; as such, they can be resold if the market determines their value has increased.
As the world moves into a digitized era, many in the wine world have entered the NFT Platform, here are what wine businesses are offering through NFTs.
Bitwine is a purely digital wine NFT. Inspired by the culture and story of wines, this company creates pixel art, graphic collectibles of wines on platforms like OpenSea that provide a place for NFT's to trade. The BitWine collections are released in "drops" of 50 wines at a time, each classified based on their rarity, age, grape varietals, and region of production. For big spenders and virtual collectors, there's currently a BitWine for sale for nearly $300,000 . These NFT's can only have one owner, making it a scarce and unique collector's item.
WiV Technology partners with wine producers, distributors, and merchants worldwide and introduces a platform for selling fine wine as an NFT. WiV tech sources wine and makes them into a unique NFT, representing an actual bottle which they store for consumers, so every NFT is tied to real-life assets, not just a digital picture. NFT markets allow ease and efficiency in trading transparently. In essence, a consumer is buying a particular case of fine wine without any hassle with respect to sorting the wine, authenticating, checking provenance, or even storage and logistics. All while reducing associated trading fees.
Hello Fam is the world's first NFT wine brand that partners with reputed digital artists to work on specialized wine NFTs. Their inaugural release of Genesis Vintage 2021, a Syrah Blend from Jezreel Valley winery in Israel, was sold exclusively on NFT. 250 bottles were sold on the first day. Hello Fam’s, Grape Fam NFT offers token holders the opportunity to become members of the Hello Fam Winery and tokenized ownership of a physical, real case of wine. With a network of 100 + wineries, they plan on collaborating with vineyards and NFT communities to open up wine investing to larger communities.
Many wineries have identified NFTs to directly interact and sell to consumers as well as an innovative tool for effective marketing.
Yao Family Wines, owned by Superstar NBA player Yao Ming was one of the first celebrities to hop on to the NFT trend. His wines, Yao Family Wines from Rutherford, California, offered 200 bottles of "The Chop Cabernet Sauvignon 2016" paired with an NFT digital collectible (100 were sold on release). A wine already regarded as one of the elite Cab's in Napa coupled with a limited edition NFT appeals to both wine and NFT collectors that appreciate the value of a one-of-a-kind asset and also encourages other wineries to explore the potential of NFTs.
Chateau Angelus, one of the most respected Bordeaux producers, has offered an NFT for the ownership of the Angelus 2020 barrel: 225 litres along with a unique digital artwork of the iconic Chateau Angelus bells. Additionally, the chateau has also curated experiences with the NFT. With the barrel, the Chateau is offering a tasting with the CEO, a VIP experience with a Michelin starred chef and a personalized stay during the harvest in Bordeaux.
Chateau Darius owned by young Entrepreneur Falvien Darius Pommier, in St Emilion offers 4 NFTs for each vintage, including a digital artwork piece unique to the consumer, storage facilities, and two physical bottles.
He believes that NFT's can open up new markets, serve multiple channels, and attract a new target audience.
While the crypto and NFT market is still very young, its advantages are apparent. Only time will tell if these modern technologies will be able to transform the archaic wine industry.
Article written by Prithvi Nagpal – Editor & Sommelier