Pricey Fleur de Miraval rosé Champagne is Brad Pitt’s latest wine baby. The second release (ER2) was poured at this year’s Oscars, and in a few months, Pitt’s Champagne house plans to join the cryptocurrency world craze to drop its first NFTs.
Non-fungible tokens, or NFTs, are smart contracts tied to digital (sometimes physical) goods by way of a QR code that’s all recorded on a blockchain. Exactly what goodies these might include hasn’t yet been revealed, but what about an exclusive cuvée and one-on-one bubbly tasting with Brad at his fabulous estate in Provence? (I stayed there before he owned it, and sipped rosé while lolling in the bathtub in my room overlooking the vines.) Right now, Pitt’s suing Angelina Jolie for selling her share of it.
Although the wine world is notoriously slow to change, a few future-oriented, buzz-seeking, big-name producers such as Penfolds, Robert Mondavi, and Dom Perignon, as well as a couple of small ones like Bordeaux Château Darius, entered the NFT space last year. Many others are planning to join later this year. There are already NFT wine clubs, and the global Club dVin will make its debut on May 15 with an initial offering of 4,000 NFT memberships for 1.5 ETH to 3 ETH ($4,456 to $8,912 as of 5 p.m. East Coast time on Friday; crypto rates change quickly).
Whether to invest in any of these offers is the big question. My quick answer: It depends on the NFT, and don’t count on serious financial rewards if you plan to flip.
First, though, a refresher. As the name suggests, each token, whether attached to a video, an image, or a physical bottle of wine, is unique and not interchangeable. Recording it on a blockchain guarantees ownership and authenticity of the token—although since anyone can “mint” an NFT, the underlying goods can be fake. You can buy or trade NFTs on marketplaces for crypto goods such as OpenSea.io. So far, most of the wineries involved have tokenized physical bottles of rare cuvées attached to special experiences and other enticements.
Guillaume Jourdan, of France-based luxury marketing consultancy VitaBella, advises such high-profile French wine estates as Taittinger and Miraval and is a believer. “NFTs will be a way for fine wines to find a new source of growth with younger generations. No one can ignore it,” he emailed. “When traditional wine estates understand this, the market will explode. But good platforms have to be set up and launched.”
On the other hand, Robbie Stevens, North America manager for Liv-Ex, remains skeptical. “I think wine NFTs are mostly gimmicks testing the water to see what works. It will be a long time before they hit mainstream, because the wine world is so fragmented.”
The motivations for wineries are strong. They include brand publicity, a way to connect directly with consumers, the ability to trace bottles, and a desire not to be left out of the next hot thing. Many took note of the Beeple art NFT that sold a year ago for $69.3 million, as well as global sales of NFTs reaching $24.9 billion in 2021. CNBC’s 2021 Millionaire Survey revealed that 47% of U.S. millennial millionaires hold at least 25% of their wealth in cryptocurrencies.
And there’s this: NFTs can build in an ongoing “royalty” percentage in their underlying code to be paid to the winery each time one is traded.
Lorenzo Trefethen, a member of the younger generation at Napa’s Trefethen Family Vineyard, says its NFT experiment in December was intended to capture new fans. Developed with Team PancakeBunny, each of the nine one-of-one Crypto Heroes Cabernet NFTs represents a physical bottle of the regular 2018 Trefethen cabernet sauvignon, with each sporting a different label of original art. A one-of-a-kind QR code links to a virtual bottle that can be traded, and also unlocks special 3D art.