This year, the wine industry began tapping into the virality market of NFTs to expand its market share and attract more business exposure.
A wine-centric NFT? Now what’s the point in that and how is that a great pairing? For a quick recap, an NFT, or non-fungible token, is a unique digital – or even real-world – item that is sold primarily on the Ethereum blockchain which gives it a certificate of ownership and authenticity. A.k.a it cannot be hacked or cloned in theory. NFTs have been recently popularized for selling digital art since traditionally, art gets its value from being a one-of-a-kind piece.
Aside from attempting to get a piece of the hype just like everyone else hopping on the NFT bandwagon, NFTs can surprisingly offer a lot to the wine business. Since NFTs are one of a kind, they can help combat, or at least muffle, some of the fraud related to selling wines.
Back in 2016, ‘winemaker’ Rudy Kurniawan made millions by selling counterfeit wine to rich wine collectors in the “Sour Grapes” scandal. Kurniawan bought cheaper bottles of wine and rebottled them in his kitchen to make them seem more expensive, or rare, which he later auctioned off. It’s estimated that his wines still out in the open market today exceed a combined value of $550 million. Making the scandal the biggest and most successful wine counterfeit in the world.
Linking a sale of an NFT to a real-world product gives it a mark of credibility and authenticity which is something that is not possible with a ‘normal’ transaction. Other than cauterizing the counterfeiting possibility, there are still other beneficiaries NFTs can bring to the table.
With the selling of artwork already happening, there is now an opportunity to sell shares in trademarks that are linked to the celebrated wine and/or winery. This would incentivize bragging rights for buyers since these items would be intangible and part of the culture of wine. Then, this can be further extended to offering winery shares or stakes in a certain year’s harvest.
As we learned with “Sour Grapes”, it’s no secret that there is a lot of money surrounding the wine culture. NFTs may be the secret to getting new brands exposure when getting the ball running. They also provide the perfect segway for brands trying to embrace new technologies. NFTs offer a great opportunity to expand a brand’s market share and explore new habits of marketing and consumption.
The ‘world’s first NFT wine allocation’ was launched in April by online wine service Yahyn, as a partial way of offering security to customers. In July, Chateau Angélus sold an NFT guaranteeing ownership of a barrel of Angélus 2020 as well as a 3D digital artwork of the bells used on the brand’s labels and packaging.