NFTs might be all the rage, but should they have a place in your cellar?
“….there has been a lot of innovation recently.”
The following written content by MIKE DESIMONE, JEFF JENSSEN
Produced by humans for around 8,000 years, wine is slow to change. That said, there has been a lot of innovation recently. Low-sugar wine is a fast-growing category, production of rosé Prosecco is now allowed, canned wine is crazy popular and wine releases paired with NFTs are exploding. Ever since that last item caught our attention, we have replaced checking vintage charts for best quality-to-price ratio with finding out what Ethereum is worth in USD, as many wine-NFT release prices are quoted in cryptocurrency. That said, most of the offers we’ve seen will accept traditional currency as well, whether dollars, euros or pounds.
We’re familiar with NFTs by now, right? If not, a quick recap: “Non-fungible token” is essentially a rather clumsy term for a digital asset representing a real-world item that can include music, art or video. “Non-fungible” means that it can’t be traded for or replaced by another item of equal value. Any one bitcoin is worth the same amount as any other bitcoin. And while two $50 bills can be traded for a $100 bill, NFTs are one of a kind. All NFT transactions are recorded on a blockchain, creating an inexpungible record.
For authentication purposes, wine NFTs actually make sense, but wine brands’ initial forays into the non-fungible realm have included enough gimmicky offerings to obscure any real value. Take an NFT drop from British chat-show host Graham Norton’s He-Devil, which included annual “first release” rights to He-Devil wine (hmm, sounds like a typical wine-club allocation) and a physical print signed by the winery’s cofounders. Or Sarah Jessica Parker’s Invivo X brand’s NFT, which featured digital art representations of two of her wine labels. (Meh.) Even the highly regarded Bordeaux house Château Angelus offered 3-D label art along with a barrel of its 2020 Angelus. Robert Mondavi Winery pivoted to a hybrid model, making both the wine and the art something unique: It created a limited edition of three special wines, putting them in commissioned porcelain magnums handcrafted by French porcelain house Bernardaud. The price at the time of writing was 1.20 Ethereum, or approximately $3,510.
Other recent wine and NFT releases of note include former NBA player Yao Ming’s Yao Family Wines offering 200 bottles of its 2016 “The Chop” Cabernet Sauvignon along with an NFT. These bottles could be bought only with Ethereum, and 137 have sold so far. No gimmicky art attached, just the wine, albeit with a splash of buzzy crypto.
Australia’s Penfolds released two NFTs, one in November featuring a barrel of its 2021 Magill Cellar 3 Cabernet Shiraz, which sold in 12 seconds for $130,000. Again, all wine, no digital label art. Perhaps this sold so quickly because it was offered in dollars; potential buyers may not want to embrace using a currency they don’t fully understand or trust. A second release in January offered 300 bottles of Penfolds Magill Cellar 3 2018 via BlockBar, an online marketplace for wine and spirits NFTs, and all 300 sold within 10 hours.
If you look past the buzzwords and art projects, attaching an NFT to a bottle or barrel of wine seems like a smart move, especially to fight counterfeiting. As Guillaume Jourdan, a consultant for the luxury and wine industries at VitaBella Paris, told us, “NFT tokenization of the digital identity and real-time tracking of wine bottles are possible… The integration of these solutions into mainstream trade and commerce is a way of eliminating counterfeits. With an NFT, a bottle of wine becomes ‘phygital,’ meaning physical with a digital identity: For every single bottle, a unique NFT is created to provide authenticity and verification.” Read more from Robb Report.
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