Nicolas Mendiharat, co-founder of Winechain: “We give access to the whole world to the ownership of great wines”

LE FIGARO. – In terms of NFT, the world of wine seems to be divided between fascination, fear and skepticism, all surrounded by a deep feeling of incomprehension. Can you clearly explain to us how this system works?

Nicolas MENDIHARAT. – The principle is simple: the bottles must stop moving. Each is identified by a QR code, and remains kept at the estate, even after purchase, in the best possible conditions. When the buyer requests it, the bottle is sent directly to him, again in optimal conditions. This helps ensure tracking and authenticity. Once received, he can prove with this same QR code that he has consumed the wine, and the winemaker can then grant him advantages, for example tastings.

You recently announced a fundraising of 6 million euros from major French wine estates for your startup Winechain. How do you explain this enthusiasm for the subject in recent months?

The subject is still very fresh. We have been wanting to apply NFTs to great wines for a full year. Many have tried to ride the wave before us, with around fifteen projects on a global scale, particularly in France, which is a technology-savvy country. Houses that can afford it are already very well equipped: data, drones, etc. Today, many of them are taking training on the issue of NFTs, and really trying to understand. The first feedback is extremely positive. The younger ones think it’s great, and the older ones don’t want to change their habits, which creates a real gap. I’ve been developing solutions for 25 years, and when you look at the adoption journey of all technological breakthroughs, the same scenario repeats itself. On the one hand there are early adopters, and the others who will just watch before getting started. I see it with an amused eye, I want to try to understand their journey, their resistance.

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What are the concrete benefits for the consumer?

French consumers are very particular, they are in a way spoiled children, insofar as 60% of world production is French. They therefore have privileged access to the most prestigious wines, while 90% of French wines are consumed by foreigners. Just like in the luxury sector, a Frenchman approaches his purchase in a different way. For others, the main advantage is a guarantee of authenticity, in particular due to the increase in the number of frauds, in China as in the United States, with counterfeiters who are showing ever more creativity. Traceability has become a real issue, but today, there are no rules in this area. How can you be sure that the bottle has not been stored at 50 degrees in a container?

And for winegrowers?

Winegrowers are essentially confronted with two problems. The first is that they do not know their consumers, since most bottles pass through different intermediaries. Consequently, and this is the second problem, they do not know if their wines are stored for speculative purposes without being consumed, and do not receive anything on the capital gains made. With NFTs, a buyer can put a bottle purchased directly via the platform back on sale, at the price they want, via a private sale that can last from a few minutes to several hours. The winegrower will then receive a percentage of the capital gain realized on the resale. We call it the Wine FT, and it’s a system that we registered.

With such a system, we can fear a real reversal of what exists today, with winegrowers who will want to encourage speculation in order to maximize their capital gains. Is this a real risk?

We cannot go against a market of supply and demand, at the risk of falling into philanthropy. Most winegrowers today want to be in direct contact with the end consumer. The winemaker is the only one to decide the initial price of the bottle, as well as the percentage of the added value realized in the event of resale. He can then set a rate of 70% in order to dissuade buyers from any desire to resell. Today, prices are set by intermediaries (agents, distributors, auction resale platforms, etc. Editor’s note). The price of a case of wine increases due to the multiplication of these. Here we are shifting the question of speculation to the side of consumers and winegrowers, rather than to the side of intermediaries, and that seems fairer to us.

Are intermediaries then doomed to disappear?

Intermediaries will continue to exist, because we are faced with a market where demand continues to rise, unlike supply. We simply want to create a more fluid channel for 10 to 15% of the offer, which does not yet exist, and we believe that it is normal that a piece of the cake goes to the winegrowers. Today, a wine collector who wants to resell his collection has a lot to lose, because resale platforms apply a rate of around 25%. The fluidification of this secondary market is therefore of real interest.

If the winegrower applies a rate of 70% to the added value perceived by the consumer on resale, what prevents the buyer from turning to intermediaries who apply a lower rate, even if there remains raised ?

We will not be able to prevent this, but here again, the questions of authenticity, conservation and traceability are essential, in the purchase as in the resale.

If we draw a parallel with the mobile telephony industry, aren’t you afraid that a player could arrive on the market and slash prices?

No, because telephony is a mass market, and above all dematerialized. We are here in a niche market with a physical aspect, which requires significant logistics on a global scale in order to ensure deliveries.

What is the economic model of such a system, and should we not be afraid of creating a two-speed market?

Our model is based partly on a commission made on each transaction, then on the profits made afterwards in the event of a resale. We have not retained the subscription solution, which is too restrictive for the winegrowers, who feel much freer here. I can’t tell you how much it actually costs winegrowers, but the percentage we apply is always the same. With this system, we give the whole world access to the ownership of great wines.

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Nicolas Mendiharat, co-founder of Winechain: “We give access to the whole world to the ownership of great wines”

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