▻ Wine and Cryptocurrency

Let's Talk About

26 May

Written By Sarah Kemp

In conversation with Flavien Darius Pommier and Louis de Bonnecaze

Episode Summary:-

Jane Anson investigates how the wine world is getting involved with cryptocurrency, and in particular NFTs (Non-Fungible Tokens). She talks to two of the pioneers in this field, Flavien Darius Pommier, of Château Darius in St-Emilion, the first Château owner to release a digital version of his wine as an NFT, and Louis de Bonnecaze, from the Bordeaux negociant, BTC Wine, the first negociant to accept payment by cryptocurrency. She discusses with them the opportunities and challenges for the wine industry in dealing with cryptocurrency, which is now becoming more mainstream (over 10% of US citizens own some form of cryptocurrency) and unravels some of the jargon (and there is a lot of it) which is used in the new world of virtual currency.

““The value of the NFT market grew by 299% in 2020, where it was valued at 250 million dollars, but this year it has gone nuts – in the first three months of 2021 there has been a 2000% increase and 2 billion US dollars was spent on NFTs from Jan-March. Now the wine world is getting involved.””

— Jane Anson

Running Order:-

0.00 – 29.47

Jane Anson explains what an NFT is: A digital asset you can own, and where ownership is stored using block-chain technology. It was the creation of block-chain technology in 2008 that made digital currencies like Bitcoin possible. That market was, at its height, worth 2 trillion US dollars (though in the very brief time since this recording, Elon Musk’s declaration that he will not accept Bitcoin due to environmental concerns dropped the market to 1.5 trillion). NFTs are using block-chain technology, which means that the ownership is tracked and stored using a digital contract that is established at the time the NFT is made; this is why it is of interest to artists and winemakers, as each time an NFT is bought and sold the original owner gets a percentage of the price. Jane explains how the market for NFTs has boomed, with a 2000% increase in sales of NFTs in the first three months of 2021.

She talks to Flavien Darius Pommier of Château Darius in Saint Emilion, the first Bordeaux Château owner to release a digital version of his wine as an NFT. He explains how he studied finance at Kings College in London but went back to the family vineyard in St-Emilion.“I wanted to mix the old generation with the new generation, joining the savoir-faire and the knowledge of my grandparents and mixing it with my knowledge, which is mostly about technologies and social networks.” He started getting the attention of the press by his innovative use of Instagram, which he used in a pro-active way. He talks about how one NFT represents one bottle of wine and how important it is to him that the owner will also be given a bottle of actual wine. His wine was launched on the Bakery platform, but an issue he faced was the fluctuation of the cryptocurrency, so he has to check every 10 days and readjust if the price fluctuates too much.

He hasn’t been approached by other vineyards yet to share his knowledge, but he has been approached by a gin company.
29.48 – 58.19

“As crypto has gained legitimacy and gained value there are a lot of people who have made money, and they are looking now at ways of spending it in the real world, and that means that more and more private companies are stepping up to happily accept that money."

Jane continues to look at how the wine world is adapting to cryptocurrency. She talks to Louis de Bonnecaze of BTC Wine, the first Bordeaux Negociant to accept cryptocurrency. There are 4,000 different cryptocurrencies as of January 2021 and more are being added all the time. There are Bitcoins or altcoins, which is any virtual currency that isn’t a Bitcoin. Companies such as Virgin Galactic, Xbox, and the Miami Dolphins football team accept cryptocurrency. Wine has been slightly later in getting on board with cryptocurrency, but the Chicago auction house Hart Davis Hart have been accepting cryptocurrency since 2019, as have Irongate Wine; just recently Acker & Merrall have announced they are accepting digital tokens for auction and retail. Louis explains that BTC Wine is a department of a B to B negociant, Lasserre-Papillon. They created BTC Wine in 2018 to target new customers. Louis explains that their main markets were international, and they thought cryptocurrency would be a perfect fit for international business.“It is a very fast, secure, convenient and low-processing-fee payment” he says. Jane asks how the châteaux have reacted to the idea of cryptocurrency, and Louis says they have just started to talk to them about it. He says how important it is to understand the crypto trends and to locate customers who are found on less well-known social media platforms, such as Reddit and Telegram. “We have new customers, young customers, very connected customers, and they are using social networks and they can spread news very fast, and they are all over the world… cryptocurrency customers are everywhere.”

The first sale in cryptocurrency they made was at the end of 2017 – Clos Dubreuil 2016, a chardonnay. They also made the first-ever En Primeur sale in cryptocurrency – Ch Cheval Blanc 2020.

Louis says their mission is to simplify access to fine wine, and they are going to open a new wine shop in the centre of Bordeaux which will accept cryptocurrency. Due to the volatility of the currency, they convert the cryptocurrency in order to minimise risk and because their suppliers do not accept it. He believes the châteaux will move to accept cryptocurrency in the future, though they are not doing so now. He also believes En Primeur could be a big market for consumers who hold cryptocurrency.