- The German startup, VINiD, is combining NFT and NFC technology to protect wine from forgery.
- Consumers obtain NFT details about a wine bottle by scanning with their smartphone.
- The concept is aimed at producers
- Cooperation with top VDP producers may help attract interest from others
- VINiD believes it has sufficiently funds to allow it the time to build its business
The encounter between the blockchain-based tech and fine Riesling took place on March 5th at the VDP Rheingau auction at Kloster Eberbach. This event, where top wines produced by VDP estates in the latest vintage are sold under the hammer, is one of the highlights of the global wine calendar. Among the bottles auctioned every year are ‘Auction Reserves’ that are not released to retailers, and thus particularly keenly sought after by collectors on the secondary market.
Protection from Forgery
To protect their wines from being forged, the producers adopted a combination of an electronic NFC – Near Field Communication - chip and tag and a NFT – Non Fungible Token - created by a German start-up called VINiD.
The process begins at the bottling stage, when the NFC chip containing information about the wine from the producer and a link to an individual NFT created by VIN1D, is placed on top of the cork before the application of the capsule. Anyone scanning the bottle with a smartphone can access all the details on the NFC, including any changes of ownership, provided the sale has been recorded on the blockchain. As soon as the capsule is removed, this too will be recorded, which, prevents anyone from refilling the bottle with another wine. The VDP sees the VINiD as offering an "innovative guarantee of authenticity"
In response to the criticisms of the colossal amounts of electricity required by NFTs, Schier points out that, VINiD uses the recently-developed Polygon platform that claims to need as little as a hundredth of the power required by the energy-hungry standard Ethereum model.
Marketing Challenges and Opportunities
The biggest challenge facing Schier’s business lies in interesting a very different set of customers to most of the ones who have seen the appeal of NFTs in the past. His target is not the young, tech-savvy, speculative buyers of digital images; it is the bosses of traditional wine producers who have often been slow to adopt digital answers to their problems.
Proving authenticity is not the only solution VINiD may provide however. The use of the NFC allows those producers an ongoing means of communication and marketing to people who already own their wines. If they can be persuaded to scan their bottles on occasion (or, more likely, simply use the VIN1D app), those consumers might see information about new releases, tastings and events that are targeted directly at them rather than a broader audience. Potentially, they might also be put in contact with other VINiD NFT-wine owners with whom they can trade authentic bottles.
Whether wineries will believe this to be worth spending between one and five euros per bottle, depending on volumes, remains to be seen. Schier says that he has some high level clients already lined up, including a producer in Brunello, and he has some good financial muscle - and the time that offer - on his side. Investors have already backed the business with €35m, so they are evidently confident in it, and the approval from the VDP will certainly help to bolster their belief.