“The consumer is fond of novelties, it allows him to feel new emotions”. These are the words of the owner of large international vineyards Bernard Magrez, which illustrate the impact that blockchain could have on the wine market. In addition to the overall lack of dynamism, there are other factors which make the wine industry a sector in full mutation. Zoom on the concrete applications of the blockchain on the problems encountered by the world of wine.
Blockchain and tokenization for a transparent wine industry?
The least we can say is that the wine industry does not shine with its transparency. Labels (reasoned agriculture wine, organic, biodynamic, etc.) as well as medals (more than 3300 medal-winning wines at the Concours Général Agricole 2023) abound and it is difficult to know what they certify and the requirements they have.
Contrary to what one might think, these certifications are not necessarily linked to the taste quality of the wine and in addition are expensive for the winegrowers insofar as they have to send samples for each competition.
The paradox lies in the fact that the winegrower has a large amount of information at his disposal. This is mainly the case for prestigious appellations (like for champagne).
Indeed, the network head organizations, in addition to demanding specifications, organize checks throughout the wine-making process. They require the winemaker to transmit information, but the latter is only very rarely, if at all, put forward.
The blockchain allows them to be valued by recording each step of the production process in a secure and transparent manner.. Concretely, as soon as the grapes are harvested, information such as the grape variety, the geographical location, the cultivation methods and the dates are recorded on the blockchain.
During vinification, information on fermentation, aging and bottling can also be collected. This information is immutable insofar as the blockchain prevents any manipulation or alteration of viticultural data by the various actors involved once certification has been obtained. Then, anyone can have free access to all certification-related information via a QR code scan on the bottle.
This is the work carried out by the startup Ez Lab. The latter has built a platform called AgriOpenData on the Algorand blockchain. which uses smart contract technology to guarantee the traceability, the fight against counterfeiting and the certification of agricultural products as a security system. The first concrete case of application dates back to 2016 with the Italian wine Montecoco Salice Salentino DOP.
Tokenizationas for her, makes it possible to trace the route of the wine from the vineyard to the point of sale throughout the supply chain. Every transaction, whether wholesale to distributors, final purchase by the consumer or potential resales on the secondary market, is recorded on the blockchain, thus guaranteeing the origin and authenticity of the product. product.
Faced with the problems of the need for traceability and transparency, the blockchain stands out as a first choice option. With it, the opportunity opens up to move from marketing based on promises to marketing based on tangible evidence, thus making it possible to communicate on the factual.
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The fight against bottle counterfeiting and speculation
For about 20 years, with the rise of the Asian market, the prices of bottles of certain grands crus have reached record levels. Quite logically, this surge in prices is accompanied by speculation and therefore an increase in counterfeiting. Very difficult to discern, it would affect up to 20% of world trade. So much so that it is becoming essential for large domains to be able to certify the traceability of their products.
This is the approach taken by the company WineDex, which developed its wine authentication and traceability application. Combined with RFID (Radio Frequency Identification) technology, the application is able to guarantee the link between the bottle and the information contained on the Ethereum blockchain. This allows the user to see the history of the bottle (number of owners, storage and transfer conditions, etc.).
Even more than a simple fight against counterfeiting, the blockchain opens up possibilities in terms of the fight against speculation. When a bottle is associated with an NFT, winegrowers can integrate royalties into the smart contract, corresponding to a percentage of the resale price of the NFT, which is paid to them. This is what Malartic-Lagravière did with its drop of 150 NFTs, allowing them to earn up to 3% on each sale made on the NFT OpenSea marketplace.
The blockchain asserts itself as a solution of choice when it is backed by third-party technology such as RFID (Radio Frequency Identification) or NFC (Near Field Communication) chips, since it allows anyone to trace the bottle during potential resales on the secondary market and thus limit speculation and counterfeiting while allowing fairer remuneration for the winemaker.
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Capturing new customers, from gadget NFT to useful NFT
Per capita wine consumption in France has fallen sharply since the 1970s. This is mainly the case among 18-35 year olds who prefer to turn to beer or spirits, alcohols that are more marketed and less intimidating to purchase. than wine. The blockchain, through the use of NFTs (non-fungible tokens), could help wine regain popularity among young people.
Concretely, in the case of NFTs, this involves the tokenization of bottles. In other words, the bottle is backed by an NFT which acts as a title deed and as a certificate of authenticity. Some decry this use perceived as a “gadget”, a simple marketing tool. Indeed, the main problem with NFT today is that it is sometimes difficult to find a use for it: when the bottle is received, the non-fungible token loses its usefulness. In some cases, it must even be “burned”, because it no longer has any value.
The question that arises is the following, how to create real added value around the latter? In this respect, it is interesting to dive into some French Wine Tech projects.
Edmus Castle
This estate has launched a collection of 10 NFT-backed magnums. The castle has chosen to be unique by collaborating with tattoo artist Dimitri HK, which “collectors like” assures Laurent David, co-owner of the estate. In addition to the hard copy of the work and its NFT digital version, the bottle is accompanied by the NFT WineDex chip which ensures the authenticity and traceability of the latter.
The Wine Bottle Club
The Wine Bottle Club has also created a collection of 1,855 NFTs associated with bottles of Bordeaux grands crus. But, more than a simple NFT, the collection aims to federate a community around a club of wine lovers and an entire ecosystem around it (physical events, primeur prices, investment advice, tastings, etc.).
Finally, the club’s founders recently launched Intercellar: a platform where wine and spirits properties can “drop” their own NFT collections to the Wine Bottle Club community. The first drop was that of 150 magnums of Malartic-Lagravière, a Grand Cru Classé of Graves, the second that of 20 bottles of Champagne Carbon.
👉 Wine Bottle Club (WBC): when the greatest French wines meet the NFTs
Conclusion on the interest of blockchain for the wine industry
So, blockchain and NFT allow much more than just tokenization of wine bottles. The possibilities are numerous and offer new ways of consuming wine as well as producing it. From the vine to the point of sale, the entire production process could be impacted by this revolution.
Blockchain offers a fairer compensation opportunity for winemakers and promotes a traceable and transparent wine industry. Admittedly, today not everything is perfect, in particular because blockchain solutions often represent a significant additional cost, which only large farms can afford to cover.
However, blockchain technology is still in its infancy and the years to come could well be those of a wine associated with Web3for the good of the producer and the consumer.
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This article was written by Émile Brémond of the student association KryptoSphère
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KryptoSphere is the first student association based on cryptocurrencies and blockchain. She is also a specialist in artificial intelligence and more recently in virtual reality, their aim being to popularize these concepts.
