Tech

The wine industry is known for being highly traditional. It’s also obsessed with NFTs

Crypto enthusiasts and wine makers alike say the industry is poised to benefit immensely from Web3 technology.
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· 4 min read

To outsiders, the worlds of wine and Web3 may seem an unlikely pairing—after all, the tech mantra of “move fast and break things” doesn’t exactly translate well to the years-long process of creating pricey alcoholic beverages.

Despite the odds, an interest in digitizing wine using non-fungible tokens has reached into the far corners of the industry, from high-end collectors to small brands. And those who understand both wine and NFTs say it’s not such a surprising pairing after all.

“There’s such a natural fit with the wine industry and the world of NFTs,” Avery Akkineni, president of Web3 consultancy Vayner3, told Retail Brew. “This concept of scarcity, of provenance, really matters to both industries, and I think it’s one of the reasons you’ve seen a lot of activity in the wine and spirits space.”

Old wine, new breakthroughs?

Akkineni says nobody has yet cracked the code on transforming the industry using Web3 technology, but that’s not for lack of trying, or interest.

  • In 2021, Vayner3 partnered with Napa Valley-based Robert Mondavi Winery to launch a collection of wines only available to purchasers of a connected NFT, which could then be redeemed for the wine itself.
  • The project was meant to attract a new type of luxury consumer, Akkineni explained. (The tokens were priced at $3,500, and only 1,966 bottles were made, corresponding with the year that Robert Mondavi was founded.)

Transparency and loyalty: One of the top benefits of blockchain technology for winemakers is increased opportunity to track their bottles and learn about their end consumers, explained David Garrett, co-founder of Web3 fine-wine loyalty program Club dVin.

“When you open a bottle of wine, you are typically separated from the winemaker by 18,000 miles and 15 years,” Garrett told Retail Brew. “Not only are you separated by time and space, but also 15 different people have handled that wine in between the winemaker and the consumer.”

  • “We think about ourselves kind of like a Shopify,” Garrett said. “We provide a bunch of great tools for these wineries to tokenize their wines to provide community loyalty, communications, rewards…to their most enthusiastic consumers.”
  • Club dVin recently partnered with retired-NBA-player-turned-French-chateau-owner Tony Parker, to offer 500 NFTs linked to bottles of the chateau’s initial vintage. The tokens, which will also provide holders access to future vintages and events, go on sale this month.
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Easing trading friction: Loyalty is just one area where NFTs can enable the wine industry, said Guy Wolfe, strategic insights manager at IWSR Drinks Market Analysis. At the high end of the wine market, the use of NFTs can enable trading and speculation of fine wines—allowing bottles to be sold and traded without ever leaving the perfect conditions of a cellar.

“This allows for much easier re-sale, as the rights to the bottle can be sold while the actual product stays exactly where it is,” Wolfe told Retail Brew via email.

  • Enter WiV, a blockchain-based platform for fine wine that has been “tokenized,” or connected to an NFT.
  • The world of fine wine is slow-moving, but blockchain technology can provide new efficiencies in terms of both provenance and trading, WiV CEO and co-founder Tommy Nordam Jensen explained. “We want to make it an instant experience, where you can actually get the proof of ownership…instead of [waiting] two to six weeks to get the wine.”

Engaging the crypto community: But NFTs aren’t just for wine aficionados. Adam Ghahramani, co-founder of NFT wine brand Hello Fam, said many of the brand’s token holders are young cryptocurrency enthusiasts who’ve never collected wine before. “We don’t think of our audience as the old-guard wine collectors,” he told Retail Brew.

  • Hello Fam tokenizes cases of wine that don’t yet exist, selling access to future bottles in the form of NFTs, Ghahramani explained.
  • The brand sold 600 cases of its first wine, and it was a year before the wine itself could be redeemed. “The goal was we sell it, and then afterward we produce the wine so that community can take part in the winemaking journey along the way,” he said.

Preliminary tastings: Wine’s love affair with Web3 is still in the early stages, and it’s not clear who will create the breakthrough product to revolutionize the industry, Akkineni said.

“Who is best poised to do it is folks who deeply understand the winemaking industry, and also understand what's happening in this world of Web3,” she said.“I think that sort of sweet spot will be people who are able to create a community and bring those folks together, and just use that technology as almost an invisible layer that unites these communities.”—MA

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