What We’re Building and Why?
Empowering Wine Commerce with Technology
Building in public
We’re opening the “doors” to our build process. From the beginnings of our problem discovery and uncovering our the opportunities we find, through to our prototyping and software development. This project is open to your eyes and your feedback.
Product Strategy
Welcome to our product strategy. We’ve summarized the results of our research, identifying our starting point and where we can add value to the wine industry
Introduction
NFT's digitally represent ownership and their technology introduces new mechanisms of provenance, ownership, authenticity, business models, trade and supply chain management. The wine industry values many of the above-mentioned characteristics though the industry's largely missing an enabling technology.
NFT's are blockchain technology which represents a significant hurdle for businesses to adopt. Palate's platform will unblock technical hurdles by being compatible with a companies regular tech stack.
Our focus in 2022 will be
- learning our target market by prototyping and customer feedback
- building the first iterations of our product and receiving feedback
- signing our first customers
Goals
Whilst our ambitions are high in the sky, we’re focused on validating our value proposition and debunking our assumptions.
Our key areas of focus for 2022 include
- Customer discovery: iterate on 3 x product ideas
- Blockchain wine validation: create 2 x solutions for the industry, validated through MVP & customer sign-up
Principles
The following are guiding principles we use to evaluate and priortize Palate's activities in its infancy as a product, these are subject to change when scaling becomes a concern:
How do we make a product with real traction, solving a real problem that will stand the bulls and bears of crypto?
- Validation: Creating value is the main validation we are looking for - customers purchasing our product and usage. We aren’t in a hurry to create NFT’s for wine if no-one needs them.
- Real-traction: Cryptocurrency/Web3.0 experience bull and bear runs. Products without a fundamental utility can grow in a bull & die in a bear. Palate will continually focus on finding and solving customer problems to avoid the latter
- Easy path to purchase: we understand Palate may be the customer & users first introduction to web 3.0, our goal for the customer (winemaker, etc) and user (purchaser) is to make the first listing as simple as possible
- First-day approach: Explain Like I'm 5 (ELI5) is our motto for product communication, how-to guides and company onboarding to help non-crypto native customers use the platform
- Utility-based approach: Web 3.0 is endless - it's easy to be caught up in making a DAO for wine-parties, NFT's for X and a blockchain for Y. We will focus on the customer's use-cases and focus on providing a platform with minimal features to validate and encourage new web3.0 users
What problems are we looking to solve?
There are a number of problems we’ve personally experienced, having an understanding of blockchain and NFT’s, we thought about ways to solve them:
Why now?
By examining the history of wine from 5000 B.C. to now as well as the developments in the last 20 years, the wine industry is now seeing technology delivering value to
Wine History
Carbon dating confirms the first wine production around 5000 B.C. - the wine industry is old, an industry that’s seen slow and gradual progress from first storing wine in Amphora clay pots, to transporting wine in wooden casks around the 2nd century AD, to introducing glass bottles in late 1600’s to the bottle we know having been introduced in the early 1900’s.
Wine Industry
How has the wine industry changed over the years?
- Consumption - grapes were grown by the Greeks and Romans, wine was made to be drunk, to get drunk. Without transport, wine was consumed wherever it was grown/produced
- Location became important. The Romans, understanding the quality of wine from their homeland, found good quality grapes in Bordeaux around the 1st century, and then a few hundred years later in Burgundy
- Brands started in the 1700’s with the famous champagne houses such as Ruinart, Tattinger, Moet et Chandon, and Veuve Clicquot, brands that still dominate the market today
- Classifications such as Grand Cru (Burgundy, 12th Century), Grand Cru Classe (Bordeaux, 1855), VDP (Germany, 1910), and (DOC (Italy, 1963), were introduced as quality standards
- Packaging bottle weight and label design affecting the quality and price perception
- Promotional activities labels, awards, shop or website placement affecting the buyers value perception
- Specialisation such as organic and biodynamic, growing/making techniques that respect the environment or wines that are expressions of terroir
- Financial Instruments weather derivatives investigated in 2007 to assist icewine producers in Canada (source)
- Technology we are now starting to see examples where technology is a factor for wine purchasing
Wine Infrastructure
Here we focus on the internet years
- En Primeur, selling wine from grapes in harvest
- Wine-searcher, 1999, specialist wine database, the google of wine
- Liv ex, 2000, built a raft of wine trading technologies
- Cellar Tracker, 2003. stores information about wines and wine collections
- Vivino, started in 2010, first to log, track, and review wines drunk. Now acts as a wine recommendation service & shopping aggregator
- Ecommerce infrastructure like Shopify created a faster and cheaper go-to-market strategy for all sizes of distributors
- WiV technologies, 2018, use blockchain technology to create a secure global asset register and enable a more transparent, sustainable, and decentralised wine investment business
- Blockbar, 2021, NFT marketplace for luxury liquor brands, each NFT corresponds to a physical bottle and consumers can exchange a digital version for the physical
Sources:
Lessons learned
From the evaluation of companies working with wine and leading technology, there appears to be 2 types of companies:
- Companies using technology/NFTs as a marketing tool for buyers in a new market, or buyers with cryptocurrency to spend
- Companies using technology/NFTs as a utility to solve an underlying problem in wine-commerce or supply chain
Our strategic focus lies in the latter.
Current Opportunities
During recent wine purchases/wine forays, our team noted the below issues as
- En-Primeur wine as noted above
- Winemakers are not interested in d2c, marketing, or (mostly) anything outside of making wine and tending to grapes
- Buying and selling wine is a dated industry which at best is archaic
- Wine pricing is easily arbitraged, there is no global wine tech
- Direct to Consumer is hard, I’d love to purchase from vineyards, but vineyards are always 10 - 20% more expensive