Everyone from tech gurus to art critics have been talking lately about non-fungible tokens (NFTs). So what are they? Stored on a blockchain, a digital distributed ledger, NFTs are a kind of digital data that are unique, trackable and un-hijackable. After taking the art and gaming worlds by storm, they have now spread to other sectors. 

At first glance, wine and NFTs do not go hand-in-hand. Wine is linked to the soil and traditional agriculture, a tangible object that delights the senses. All wine experts and producers agree: associating wine with NFTs is counterintuitive. 

However, like many other goods and industries, wine and vineyards have something to gain from the versatility of this new market. Some French companies — such as Aubert & Mathieu and World Wide Wine — have already entered it, with different approaches but similar aims: to show that the wine sector is not outdated and only for old connoisseurs. To prove that it can evolve, keeping step with the digital revolution.

 

Fostering connections between wine producers and consumers

Overall sales of NFTs have soared in the last two quarters of 2021, totalling a staggering $10.7 billion and $11.6 billion respectively*. The growth is so remarkable that predictions for future years had to be recalculated. And despite Bitcoin’s recent losses, NFTs still benefit from increasing popularity. 

For Aubert & Mathieu, a winery specialized in Languedoc wines, NFTs are not an end in themselves, rather an opportunity to strengthen their clientele and broaden their appeal to all wine lovers. In December 2021, the two friends listed a collection of 250 NFTs in the form of an artistic representation of a bottle on OpenSea, a non-fungible token marketplace. The NFTs were directly associated with a box of six bottles of their Pablo Maria Corbières 2019 red wine. So, behind the digital asset is a “physical” object, except whereas the wine can be consumed, the NFTs remain forever. 

“We wanted to test a new way of communicating about our products. It worked well, but at the end of the day, the digital world is not at the heart of our company’s mission,” co-founder Jean-Charles Mathieu says. This first operation is still ongoing, but it will not be the only one by the startup. “This is something we want to develop and we have several ideas, like a vintage cuvée limited to 500 bottles sold as NFTs.”

The collection also included a unique NFT, which was quickly purchased by a wine fan in California with whom the co-founders have been in touch. Because this is what NFTs are also about: the traditional proximity between producers and clients that has faded over the years. “It is especially true for luxury wines,” says Guillaume Jourdan, managing director and founder of VitaBella Luxury & Lifestyle, a marketing and communications consultancy dedicated to high-end wine brands. “With the expansion of the wine trade, in Asia in particular, wine merchants became the chosen intermediaries to facilitate sales and exports. However, houses lost the direct link to their customers and lost sight of who bought their bottles. NFTs brought back this link, as well as the ability for the houses to regain control over their brand image.” 

 

Wine NFTs in the Metaverse and Web3

For luxury wines, the blockchain and smart contract system also help prevent the wine counterfeit market, which costs the industry $3.18 billion in direct sales on a global scale. “And for everyone, it is also a new storage solution,” says Jourdan. Clients can decide not to have the bottle associated with the NFT directly sent to them but kept within the vineyards’ storage units, where it will be preserved in the ideal conditions, even if the NFT itself is passed on to another buyer. “People living within the city or anyone living in a small home can have their own wine cellar, with all their bottles gathered in the digital space, but scattered through several storage units around the country or world,” agrees Jean-Charles Mathieu. 

The Metaverse has become a new space for art collectors to exhibit their artistic and luxury NFT acquisitions. Being a traditional collectible, it is almost natural for the wine industry to integrate these digital galleries. “Ultimately, everything will be in the Web3,” predicts Guillaume Jourdan. 

Samuel Balthazard, CEO of World Wide Wine and descendant of the family operating the Château du Rouët vineyard in Provence since 1840, shares a similar vision of the future: “The whole economy is set to be tokenized and wine has always been part of the economy in France.” 

His company has launched a two-phase NFT operation to “educate the NFT world to wine” through a collection of designs representing the different AOC (Appellation d’Origine Contrôlée, a French label) wines in France. The first batch of 3,003 NFTs, which sold out in 1 minute 17 seconds, served as a “crowdfunding” for the next step. They aim to associate an NFT to a real bottle — World Wide Wine is currently in talks with producers — and perks in the Metaverse. The purchase could also give consumers video game bonuses, for instance, extra powers or healing properties. This gamification is actually the startup’s next project, which has also created its own crypto, GRAPES. It is now developing a whole digital universe with a futuristic/cyberpunk vibe where wine bottles will be proper items for the players and their characters. It is due to launch this summer. The targeted audience is people in their 20-30s who are already familiar with cryptocurrency.

 

Infinite possibilities for French wine

“One other important aspect is the second market,” says Balthazard of World Wide Wine. “On the normal market, if the value of a bottle appreciates over time, the vineyard does not earn anything. With the NFTs, you can create a royalty system which generates income for the vineyard when the bottle is re-sold.” However, he adds, speculation is not what is going to popularize NFTs, which are still aimed at a niche audience “with money.” 

Co-founder of Aubert & Mathieu Jean-Charles Mathieu agrees: “Tomorrow, NFTs are just going to be another trading option. But for now, people using crypto only represent 13% of the population, so it is still marginal. It will take years before it truly becomes accessible to all.” 

The benefits for the wine industry are varied, and the realm of possibility is infinite, — available to all producers, big and small, according to Guillaume Jourdan. “With all its vineyards and world famous vintages, France is an extraordinary playground to develop NFTs. All you need is to be creative and that is within anyone’s reach.”

*Source: DappRadar