NFT in the Wine Industry: Why the Sudden Obsession with NFTs

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Digital entrepreneurs have become suddenly obsessed with NFTs. With a myriad of NFTs in different NFT marketplaces, and the rising number of NFT investors, the NFT market is rising, with people spending millions of dollars on it.

Last year, Beeple auctioned his NFT digital art for $69 million at Christie’s, and Twitter CEO Jack Dorsey’s first tweet was previously auctioned for $2.9 million. “How can someone sell a tweet,” you might be thinking, or “what does this have to do with the wine business?” NFTs are suddenly all over us, tied to everything from digital art, music, sushi, sports, and now wine.

Recently, the wine world has even been dabbling in NFTs. People are suddenly obsessed with NFTs. They are starting to revolutionize NFTs by selling physical-property-NFT like wines! But what exactly are these NFTs?

NFT Explained

NFTs or Non Fungible Tokens are cryptographic assets that are one-of-a-kind and exist within the blockchain. As a non fungible asset, NFTs are not interchangeable because of their one-of-a-kind feature.

These NFTs have unique identification codes and metadata that separate them from one another. Creators can use them to represent real-life objects, in-game items, or virtual baseball trade cards by NFT designers. They also run on a blockchain, a decentralized digital ledger that tracks documents, transactions, and the ownership and authenticity of digital assets.

 Unlike cryptocurrencies, these digital art representations cannot be bought or exchanged at face value. This contrasts with fungible tokens, such as bitcoins, which are all similar and used by crypto enthusiasts as a medium of exchange.

 Gimmicky Art: NFT as Digital Assets

NFT is the digital representation of physical assets– from a video clip to music to photographs, art projects to digital images, or even shares of stocks. These are digital assets because they exist in the digital space and allow virtual content material.

Each digital asset representing physical property is interchangeable, indivisible, and unique. They can be bought and traded online in an NFT marketplace, often using cryptocurrency stored in a digital wallet. Creators typically encode these assets with the same software used to create several cryptocurrencies.

Despite the fact that these digital assets have existed since 2014, they are currently gaining popularity as a popular means to buy and sell digital artwork. This includes digital art representations and wine releases with gimmicky art involved.

Wine NFTs make sense for authentication purposes, but wine firms’ earliest ventures into the non-fungible domain included enough gimmicky art attached to it to mask any true value.

However, attaching an NFT to a bottle or barrel of wine also seems reasonable, especially to combat counterfeiting. NFT tokenization of the digital identity and real-time tracking of wine bottles are possible… The integration of these solutions into mainstream trade and commerce is a way of eliminating counterfeits,” Guillaume Jourdan, a consultant for the luxury and wine industries at VitaBella Paris, said.

 No Digital Art Label: Revolutionizing NFT

NFT is revolutionizing to include physical property, NFT, and even real estate. In April 2021, a real estate agent called Shane Dulgeroff tried to prove this by auctioning a house and an NFT in the form of a psychedelically colorful print image of the building.  

Shane Dulgeroff, a real estate broker, wanted to cash in on the NFT craze. He was selling this house in Thousand Oaks, California, at 221 Dryden Street, with a digital artwork attached. The digital artwork is an NFT of a psychedelic-flavored film of the property.

The artwork and home are up for sale on OpenSea. The starting offer is 48 ETH which is equivalent to about $117,000. According to real-estate portal Zillow, The seller previously sold the house for $746,000.

This is only one illustration of how NFT isn’t always associated with digital art. It might be any physical item or even anything under the sun that has been digitized. And now, even the wine world is suddenly obsessed with NFTs. They have made their wine releases attractive by attaching NFTs to them.

NFT in the Luxury and Wine Industries

NFTs are creating a buzz, and luxury brands are not sleeping on this innovation. Luxury goods companies spear a digital charge, from legendary fashion brands to eyewear, timepieces, and spirits. Here are some of the most significant luxury NFTs to date.

  • Adidas and Prada

First is the Prada Re-Nylon collection released by Adidas and Prada, but the looks extended beyond the physical realm and into the Metaverse. The NFT series dubbed the Adidas for Prada Re-source initiative asked ordinary people from all over the world to submit their images for a chance to be made into a larger NFT. Renowned digital artist Zach Lieberman produced that larger piece. The luxury brands sold it for a staggering 30 Eurotheum, equivalent to about $97,559.10.

  • Jacob & Co.

Second, Famous watchmaker Jacob & Co. converted its SF24 Tourbillon timepiece into an NFT digital asset in April of 2021, and watch collectors were on board. On the ArtGrails NFT platform, the piece was auctioned for $100,000. The digital watch had the same tourbillion and globe time zone display as the physical watch, but instead of cities, the flap system displayed bitcoins.

  • Ray-Ban

Lastly, Ray-Ban and digital artist Oliver Latta, popularly known as ExtraWeg, created the first-ever pair of NFT Ray-Ban aviators. The NFT Aviator is a 16-second video loop showing a man wearing classic Ray-Ban aviators circling his head. This non fungible token was sold for 1.8 Eurotheum, or $5,869.80, on OpenSea. The brand pledged the money raised to the Italian Art Trust charity.

Like luxury brands, wine industries have also explored other innovations. For them, wine has been sluggish to change. However, there has recently been a lot of innovation. Low-sugar wine is a rapidly expanding category, with the manufacture of rosé Prosecco being permitted and canned wine becoming increasingly popular. 

Now, the wine world offers wine releases paired with NFTs and is becoming the hot item in the NFT world.

Pioneering NFT in the Wine World

The NFT wine craze of different wine labels has no exact origin. However, this can be traced to the most remarkable auction where NBA star and Napa Valley winery owner Yao Ming listed for sale 200 ‘Physical Twin’ NFTs in the shape of online tokens and bottles of the 2016 vintage of his top wine, The Chop. The Chop became one of the pioneers of NFT in the wine world.

Examples of NFT Wine in the Marketplace

As the world becomes more digitized, the wine world has joined the NFT Platform. Here are some of the most remarkable NFT wines available in the marketplace.

Yao Family Wines

The critically renowned Napa Valley winery created by a retired basketball player and global humanitarian Yao Ming, Yao Family Wines, has launched “THE CHOP,” a limited-edition NFT. Yao Family Wines is the first winery to auction a wine that includes an NFT digital collectible.

The wine and NFT auction CHOP DROP features 200 paired lots. Bottle #11 of THE CHOP and NFT #11, a one-of-a-kind offering in honor of the year Yao Family Wines produced its first vintage and the number Yao Ming wore during his NBA career, will be auctioned off separately.

THE CHOP 2016 Cabernet Sauvignon is made from a single barrel of wine from a vineyard in Napa Valley’s renowned Rutherford District. THE CHOP 2016 received 96+ points from Robert Parker’s Wine Advocate.

The Chinese chop or the seal) has been used as a signature on official documents and works of art for hundreds of years. The seal inspired the wine’s name and label design. The seal on each bottle of THE CHOP reflects the founder’s surname YAO in ancient Chinese calligraphy and has been on every bottle of Yao Family Wines from the company’s start.

The sale proceeds will benefit community organizations combating anti-Asian discrimination in the United States.

Robert Mondavi Winery

With the launch of roughly 2,000 specifically commissioned bottles of three unique blends, the Constellation-owned Robert Mondavi winery provided another good illustration of how NFTs can mix tangible assets and experiences. 

Buyers receive a limited edition bottle designed and created by french porcelain house Bernardoud. It is an invitation to a taste for four people—the tasting is at the To Kalon vineyard, where the grapes wineries cultivate grapes and a grape harvest.

This features three specialty wines. The 5,000-word legal agreement governs the deal. This is shown in the packaging covering the wine, the bottle, described as “artistic elements,” and the tasting experience. Robert Mondavi winery pointed out that, “Unless stated otherwise in the description of the applicable nft, an nft that you own will be transferable, but any transferee will be subject to these nft terms. Nfts that we provide are utility tokens tied to unique goods, services, and experiences.”

“And, in case the would-be reseller and auction house would intend to profit from the transaction, the mondavi agreements include the following warning: “you should not purchase our nfts with a view to investment, resale or speculation. There can be no assurance as to their present or future value, transferability or marketability.”

Cabernet Sauvignon

Each NFT comes with an elegant porcelain magnum of 2019 Cabernet Sauvignon from the legendary To Kalon vineyard and a piece of generative digital art (art made by algorithms) orchestrated by artist Clay Heaton. In addition, the purchase grants access to rare winery experiences.

In the spirit of innovation, they wanted to offer something new and give people a piece of something to keep forever. They chose to couple an NFT with these great bottles and went further by commissioning a generative artist to build the NFTs.

Sarah Jessica Parker’s Winery

Ten Graham Norton NFTs will be the first in a series of auctions that will blend the finest of both the digital and real worlds. These NFTs are created by Invivo Wines, a New Zealand wine and spirits company. This wine industry has entered the NFT market with celebrity labels Graham Norton Wines, Invivo X, and Sarah Jessica Parker’s NFT.

Like the typical wine club allotment featuring hay devil wines, Graham Norton HE-DEVIL NFTs will jumpstart the yearly “first release” bottle of new wine. It includes a physical print signed by the Invivo Co-Founders and membership in the Invivo Federation of Friends (IFF).

Every Invivo NFT comes with an IFF Membership, which grants access to exclusive virtual wine tastings, discounts on Invivo products, and unique experiences. One of the Editions will also be eligible for a surprise live, virtual, one-on-one celebrity tasting session with Graham Norton, with the net proceeds going to charity.

Penfolds Winery

Penfolds released two NFTs in November featuring a barrel of 2021 Magill Cellar 3 Cabernet Shiraz that sold for $130,000 in 12 seconds. Again, no digital label art and all booze.

Perhaps it sold out so quickly because it was offered in traditional currency; potential buyers don’t want to use a currency they don’t fully comprehend or trust.

In January, Blockbar, an online marketplace for wine and spirits NFTs, offered 300 bottles of Penfolds Magill Cellar 3 2018, and The digital marketplace sold out all 300 within 10 hours for USD$130,000 (AUD$180,00). With quality to price ratio, that is one decent NFT drop.

At the time of bottling in October 2022, the new Penfolds NFT initiative will convert a single-barrel NFT into 300 bottles of NFTs. As expected, the entire process will be verified by blockchain, with each barrel and bottle number being assigned to it. Each bottle will be kept in limited edition gift boxes at BlockBar’s facility until the customer redeems it no later than the wine’s release date in October 2023.

Why is the Wine Industry Suddenly Obsessed with NFTs

The advantages of NFTs for wine are obvious, especially for pricey, rare bottles that are frequently counterfeited and then sold at auction. But what’s the deal with winery-released NFTs having digital artwork linked to them? This could be due to the fact that the original generation of NFTs was connected with digital art, and the winery followed suit.

Because the wine would eventually be drunk, one wine CEO explained that limited-edition artwork adds some lasting value to the customer. This is one of the reasons why the wine world is suddenly obsessed with NFTs. Other reasons are more economical than attracting investment in NFTs.

Verifiable Record of Authenticity and Ownership

It might be challenging to keep track of authenticity and ownership of pricey artwork—NFTs excel in this situation.

Because all NFTs exist on the blockchain, they have clear ownership records, which means your digital artwork from other people could never be stolen or its authenticity questioned.

Data is stored in the blockchain in time/date stamped blocks with digital signatures called hashes. Once a block has reached its data capacity, a new block is formed and connected to the previous block by saving the preceding block’s hash value, guaranteeing that each block is linked in an unbroken chain in the precise sequence in which it was created. Placing your digital work on a public blockchain will allow you to demonstrate its production, confirm its validity, and provide a precise provenance, allowing it to be valued on par with traditional art forms.

Ability to Attract Non-traditional Market

Asset-backed wine NFTs, according to Tommy Jensen, founder of the blockchain trading platform WiV Technology, appeal to non-traditional consumers. In 2019, the company launched its first wine, NFT, beginning with high-end Bordeaux wines. They’re currently expanding to include vintages from lesser-known producers and areas. WiV Technology distributes wine from emerging wineries such as Màquina y Tabla and original artwork in the form of NFTs.

These digital assets are essential to expanding wine consumption into new markets. Asset-backed wine NFTs have the potential to usher the sector into a new era in which winemaking meets digital technology.

Diversified Financial Portfolio: Investment Opportunity

This investment potentially adds diversification to your financial portfolio as the economy and companies prepare for what’s next in a post-pandemic world. Diversity also means holding assets across multiple categories.

Wine-based NFTs could help diversify your financial portfolio as the economy and businesses prepare for what comes next in a post-pandemic future—having a diverse portfolio of assets to invest in.

When it comes to stocks, this might entail having stock in a number of areas, such as technology, finance, medicine, transportation, and so on. Non-traditional assets, such as NFTs, are options for investors looking to diversify their portfolios.

Some investors choose to put money into a digital collection. For art collectors, rare coins, artwork, first edition books, sports memorabilia, trading cards, and other collectibles may be more than just a pastime worth millions of dollars. Investors are comfortable including these assets as part of a bigger, more diverse investment portfolio, even though they are hazardous, especially for an expensive NFT.

Unique Marketing

The latest internet craze has exploded into something far more significant, and it’s swiftly becoming an essential aspect of popular culture. While big-name businesses are joining the #metaverse revolution, digital industries are taking it further.

NFTs are now extending into the wine industry to connect communities for the love of technology and grapevines. The NFT Wine Club is an innovative marketing strategy that provides exclusive access to individuals who want to participate at a higher level. This is a unique marketing strategy that attracts the attention of wine and NFT enthusiasts.

Unique marketing calls for mainstream media and hype to increase, thus causing additional revenue for the company. One example is this: To redeem a bottle of wine, buyers “burn” or remove from circulation the NFT tokens and have their bottle of wine shipped to them.

Final Thoughts

In the past year, several wine NFT releases have changed the game in the wine world. As NFTs gain traction in the technology world, it has attracted not only art collectors or digital entrepreneurs but also luxury and wine brands. In some sense, wine industries flock towards NFT as enough gimmicky offerings and add-ons–a marketing strategy revolution.

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