NFTs, crypto, metaverse: Why Califoria North Coast vintners are diving into Web3
When the pandemic closed tasting rooms, many in the wine industry — not historically on the leading edge of high-tech adoption — moved to hold on to customer sales through videoconferencing, e-commerce and digital marketing
Now, Web3 tech has promise, say the trailblazers, to provide deeper engagement with a newer generation of consumers who have learned to extend their desires and purchases through their screens.
Vintners that have ventured into Web3, also known as Web 3.0, in the past year include Treasury Wine Estates and Constellation Brands, offering nonfungible tokens, or NFTs, connected to their luxury brands Penfolds and Robert Mondavi, respectively. Treasury offered 300 bottles of Penfolds via tokens sold on BlockBar, a new NFT marketplace for wine and spirits brands.
Constellation minted 1,966 unique real bottles of its Robert Mondavi x Bernardaud NFT Collection wines available on acquiring associated NFTs, and the real bottles are set to be available in September.
And now a handful of other North Coast ventures are taking their first steps into the even more uncharted world of Web3.
Cuvee Collective, the work of San Francisco startup Libation Labs, on Wednesday came to market with the first offering NFTs, that will give buyers — known as minters — a VIP access to offerings of exclusive wines and experiences from 25 wineries from Napa and Sonoma counties, including Robert Craig Winery, Goosecross, Massican, Schug Winery and Arcudi Wines.
The company had an opening-day goal of selling 1,000 of its 4,000 Collector NFTs and hit that mark at $179 apiece, according to CEO Andrew Allison. That NFT gives the holder access to all future “drops” 24 hours before they are open to the public, as well as other digital benefits such as customer-service priority, private Discord forum access and voting status in the Cuvee Collective.
Some have likened the role of NFTs in the wine world as a better way to handle how in-demand North Coast wines currently are allocated among those who want to buy them.
Traditionally, vintners with such cult status have a mailing list. Those on the list get first opportunities to buy each release of wine. When members leave the list, those on the waiting list can be moved up. Early adopters of Web3 see NFTs as a way for such places in line to be sold, and the blockchain digital ledger would note what benefits had been given to each owner.
“The core to Web3 is asset ownership, and we really think that with blockchain technology allocation spacing should be an asset and not a liability,” said Allison, who grew up in Napa Valley and graduated from Sonoma State University with an undergraduate degree in wine finance. “It shouldn’t be three strikes and you’re out. It should be your seat, and your seat can be filled by the person you sell it to.”
In Calistoga, vintner Mario Sculatti teamed up with “The Wizard of SoHo,” the globally known moniker for an anonymous former Wall Streeter and now decentralized-finance mastermind behind the launch of some high-profile digital tokens. One was Azukis, which garnered $300 million in just a month at the beginning of this year, according to Vanguard Media.
Sculatti and “The Wizard” met a few years ago as the latter was building his collection of Napa Valley wines. This year, they launched Evinco Wine DAO, starting with an offering 5,555 NFTs that can be “cellared” — or held — in the owner’s digital wallet to “unlock” more benefits over time, such as exclusive tastings at the Evinco tasting room, which also is the Vault Wines salon in Calistoga that Sculatti opened previously. Sculatti has been making its own brands via alternating proprietorship licenses at existing wineries and agreements or leases on multiple vineyards in Napa Valley.
“What's exciting about Web3 is this democratization of the desires of your community that you built,” Sculatti said. Evinco has a base of about 1,000 members of its discussion forum on the Discord platform, originally the digital meeting place for videogamers but increasingly is where Web3 aficionados are sharing ideas, reviews and concerns related to their favorite digital assets.
About 1,400 of Evinco’s NFTs have been minted so far, raising around $500,000 for the pot of funds that token owners ultimately will be able to vote on how it’s spent via the winery’s decentralized autonomous organization structure. Options include putting the money toward lower bottle prices for exclusive offerings or toward purchase of exclusive vineyard land with an estate for events.
“This way of having self-governance in business is not going away,” Sculatti said. “Web3 is not about artwork and cryptocurrency, but it’s about the democratization of this business.”
On the Napa County side of the Carneros winegrowing region, Web2 wine pioneer David Harmon, who founded Wine.com in the early days of e-commerce in the late 1990s, is part of a Napa-based venture called NFT Wine Club. While there is no launch date yet as the venture is still developing its own blockchain, one goal is to offer NFTs that would be virtual versions of the 3,600 real vines that Harmon tends and sells for a year at a time in his Own a Napa Vineyard venture.
“I thought NFTs were a pyramid scheme, but when I saw Mondavi get into it I decided to look into it,” Harmon said. “When saw a friend sell an NFT for $5,000 I realized that it is like a baseball card or a stock.”
But some big fans of digital marketing for the wine business and early adopters of technology are skeptical about whether Web3 is ready for prime time.
One who is not in favor of blockchain tech for the wine business is Paul Mabray, a longtime advocate for better customer data analysis in the industry and now CEO of wine-information startup Pix.
“We’re trying to jam a buzzword into a use case,” Mabray said. “People are claiming to do it with clubs, but there is a very small audience that understand it. It’s good to put a tradeable good in a wine club, but you need to make sure the benefits are usable first. There is a large amount of work that needs to be done with better customer service first.”
Jeff Quackenbush covers wine, construction and real estate. Before coming to the Business Journal in 1999, he wrote for Bay City News Service in San Francisco. Reach him at email@example.com or 707-521-4256.