This Year’s Hottest Vintage? NFTs

by | Jun 21, 2022 | Wine & Spirits

Reading Time: 4 minutes

Nearly half of millennial millionaires place 25% of their wealth in cryptocurrencies, according to CNBC’s 2021 Millionaire Survey. And since all the “cool kid” investors are turning to wine, NFTs have become a natural extension to grab this market.

Even Brad Pitt’s new rosé Champagne is getting into the NFT game. Pitt’s latest venture isn’t the first NFT wine club, but it has the potential to be splashy.

Pitt’s Fleur de Miraval rosé Champagne already sells for north of $350 a bottle, and the NFT will be an additional cost. What will the NFT be? No one knows yet.

What are NFTs?

Non-fungible tokens, or NFTs, are smart contracts tied to digital (sometimes physical) goods by way of a QR code that’s recorded on a blockchain. For example, an NFT might be a GIF, video, photo, or even a piece of land in the metaverse.

“Well, besides being the hottest trend in crypto meets art and culture, NFT stands for a non-fungible token, which means a unique digital asset registered on a blockchain. Much of NFTs are 100% digital, but each is unique, unlike a currency like Bitcoin, where every coin is the same and thus fungible,” Jacob Ner-David, founder of Hello Fam, an NFT wine club, told Fortune.

Global NFT sales volume totaled $24.9 billion in 2021, compared to just $94.9 million the year before.

According to the report, the average NFT price also rose sharply in 2021, coming in at $807.52, compared to $49.18 in 2020. In addition, the length of ownership plummeted. The report finds that NFTs were kept 48 days on average in 2021 before being sold, compared with 156 days before.

How does an NFT wine club work?

Club dVin opened itself up to membership on May 15 with an initial offering of 4,000 NFT memberships for 1.5 ETH to 3 ETH. What this translates to in dollars changes too quickly for publication.

Club dVin released its white paper explaining the concept. The white paper states,

“Whether you are a seasoned collector or a new enthusiast, Club dVIN has a tailored way for you to find community, experiences, and rare finds. Technology is not the point, but it is a key enabler, with NFTs and blockchain used every step of the way to manage memberships, authenticate wines and experiences, manage commerce, and commemorate and share every step.”

Each bottle has a Digital Cork, which is immutable and has a transparent record on the blockchain. The NFT serves as proof of provenance for collectible bottles and a chain of custody as those bottles are traded in the aftermarket.

Club dVin says, “this transparency is a strong disincentive against fraud and counterfeiting and provides buyers and sellers with confidence.”

When a club member opens a bottle and consumes the wine, the NFT is converted (or burned), so it is no longer valid for sale, and the bottle is shown as consumed on the public record.

“NFTs will be a way for fine wines to find a new source of growth with younger generations. No one can ignore it,” Guillaume Jourdan of France-based luxury marketing consultancy VitaBell told Fortune. “When traditional wine estates understand this, the market will explode. But good platforms have to be set up and launched.”

How can winemakers and disruptors use NFTs?

Even Robert Mondavi ventured into NFTs this year, looking for a new way to attract the younger generation and keep the brand fresh.

NFTs have the added allure of the seller getting a portion of the proceeds, so the upside for potential profit helps the venture makes sense for vineyards and disruptors. The downside is implementing the digital infrastructure to allow NFT sales and convincing new NFT investors that it’s worth it.

For brands that want to start offering NFTs, a wine club or “tasting tokens” can help wine collectors and affluent wine lovers be privy to unique experiences. Creating these exclusive tastings or vintages associated with NFTs can increase interest and loyalty to your brand.

“Investing in wine is becoming more and more popular through all different pathways,” says Jacob Ner-David. “Combining NFTs with wine allows for real value to support the NFT. Many digital art NFTs have shot up in price. Wine-backed NFTs will ensure that there is a ‘floor’ as well, which is the market value of the wine.”

To learn more about recent trends in the wine industry, check out our whitepaper—”5 Trends Shaping the Wine & Spirits Industry in 2022.”

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