Thoughts of Wine & Blockchain in 2022
Total Addressable Market
Currently, organizations are largely using NFT’s to increase the perceived value of their wine and sell into new markets. Examples include Penfolds & Robert Mondavi and reach as far as Yao Ming’s vineyards. Whilst this could be a valid business opportunity, the total addressable market narrows down to individuals who are both Wine Enthusiasts and NFT Enthusiasts, both niche’s in wider industries.
Barriers of Entry
Customers interviewed mentioned they purchased from the same trusted suppliers over 70% of the time, we can attest to this ourselves. Purchasing wine is rooted in trust and confidence with the supplier. We believe success in this market requires a “Cradle to grave” approach where vineyards are involved in the technology process from bottling, storage, trading, and finally delivery. Connections to vineyards and establishing trust represent a barrier of entry for new businesses, especially those that aim to disrupt an industry with new technology.
Focusing on Solving Problems
The biggest problems we saw in the current, archaic industry involve wine storage, wine tax, and tools to automate wine purchasing & cellaring.
- Wine Storage: Owning and storing wine in optimum conditions is onerous. Companies like Blockbar store wines for the purchaser and use NFT’s as the digital certificate of ownership. Similarly, Vinovest and many other companies offer a similar service using traditional systems of ownership. NFT’s in this situation increases liquidity for ownership, however, this isn’t a clear and present problem to solve
- Wine Tax: many countries charge alcohol tax, in Australia this can represent 39% of the total sale price. Companies such as BBR in London store wine “In Bond” as an investment purchasable without paying tax. Wine can be stored and traded whilst in-bond and tax paid when the bottle is ready to be drunk. Due to international law, this isn’t a problem we can solve with blockchain
- Tools to Automate Wine Purchasing & Cellaring: Cellar Tracker is a clear favourite, in-use by almost every customer we interviewed. There is room for a solution to assist in automating purchase to software, however, this isn’t a common problem and not worth pursuing
Without a doubt, NFT’s are revolutionising industries. Infamous Twitter user @punk6529 wrote about this and their growing popularity & utility in a thread in October 2021 https://twitter.com/punk6529/status/1443921334837338114
The image below, borrowed from the thread, demonstrates 6529’s thoughts on where the industry is heading. We’ve seen the beginning of growth through Gaming, Brands, Culture and the Metaverse and even companies experimenting with off-chain assets such as Blockbar.com, Wiv.io, and Mattereum.com, however, as identified through customer interviews, this doesn’t yet represent an opportunity to pursue at this point in time