Carson Leno Fallon. Now it's wine talks with Paul K. Hey, welcome to wine talks with Paul Kay. And we are in studio today about to have a conversation with Jamie Ritchie all the way out in England. He is the CEO of Blockbar, a blockchain product for wine and spirits. Introductions in just a moment. Hey, have a listen to Reed Connect. I had him in the office about a month ago. What an amazingly philosophical approach to winemaking.
I re listened to the show, which I usually don't like listening to myself, but this time I had to take a listen because it was so fascinating. Have listened to that as well as Jessica Kogan, just off a stint with vintage wine Estates, one of the leading women in digital marketing. Now with a company called Connect the Dots, I think you'll find her insight into digital marketing. What's going on out on the Internet really fascinating. Hey, have a subscribe to the show. Please give me
a review. If you don't have a good thing to say, don't say it, but otherwise subscribe and tell your friends. But want to welcome Jamie Richie to the show. Thanks for being on the show. Thank you very much for having me, Paul. It's great to be with you. I'm fascinated by your history. Jamie was the 32 years with Sotheby's and the wine and spirits auction section as well as now CEO of what is blockchain technology for protecting your asset of wine and spirits. And
we'll get dig deep into that. But I have to dig into the Sotheby's part and the auction part. I mean, like I said earlier off camera, I spent most of my adolescence with my father standing at auction paddling. I just went to the gooding car auction in Amelia Island. I mean, it's just, it's just something in your blood. Was that for you as well?
Yes. Funnily enough, we share that in common because when I was growing up, my parents left London when I was four years old and they moved into a much bigger house in the country, down in Wiltshire. And I was always at the back of some auction rubble. My father bought most of all the gardening equipment, so he built across tennis court. All the netting and the lining machines came from
auctions. He had one very good friend who knew a lot about the fine arts, one who knew a lot about the decorative arts, and they were always buying chests of drawers, pictures. So every weekend was dragging them out. So as I was growing up, I got interested in wine and spirits, mostly wine. And I was working the restaurant business and thinking about life in the wine business and want to work in fine wine. I was thinking, how could I, you know, what were the options for me?
And so one was a wine merchant, a wine broker, or an auction house. And I also wanted to be an actor. When I was growing up in England, a failed actor becomes a barrister. So I studied law for a bit. And in my book, a failed barrister becomes an auctioneer, where the role of acting is just reduced accounting. And so I ended up seeing an advertisement for Sothebys and applying for it. This is back in 1990, and I applied for the job, and I
got it, and I was there for 32 years. So a pretty amazing career. That's pretty fascinating. We have to rewind a little bit back to the auction part, because there's something about the chase and getting under your blood, and sometimes it's not about what you're buying, but it's kind of. It's kind of about winning the deal. And, you know, I consider it like the ultimate in capitalism. You know, if you got the most money, you certainly can
own it. That. That at that moment. And what fascinates me about auctioning in general, and I don't want that, it's going to tie into the wine and spirit side, is, you know, you got to inspect the stuff. You got to know what, what you're talking about. I tell my son in laws. Well, my son in law, one of my son in laws, insisted that this Rolex watch that was up at a local auction, which is actually for movie props. It's a company that only auctions movie props. And he was convinced that this Rolex
was. Was real, even though the listing said prop Rolex watch, and he bought it for $341 and it's real. That is fantastic. One of the great stories, you know. Yeah. Mistakes happen. I mean, the wonderful thing with wine auctions is that, yeah, the biggest sheer volume and the fact that it needs to be temperature controlled is that we don't actually, we didn't at Sotheby showcase any of the wines and spirits there. They were all sitting in a
warehouse. You know, it's in temperature control, ready to be dispatched. So what it did mean is that you had to be super careful about all the inspection process, making sure everything was. Yeah. Had the correct provenance, was authentic and in good condition to drink. So we didn't sell things that we didn't believe were in good condition to consume as well. Let's peel that back a little bit, because
there's a lot of fraud right now. I mean, somebody just told me the other day that somebody had created pallets of fraudulent yellowtail. I don't know why you would do that. The wine's only like 349 anyway. But there's a lot of awareness these days and a lot of conversation about the provenance of a wine that you buy. And there's a lot of private sellers up for auction. I went to appraise one the other day that that was completely trashed. Even had stickers on their petrus for 1995 from Trader
Joe's many, many years ago. So how does Sothebys verify the provenance? And you said, use the term good condition to drink. I mean, that seems like a tall order. Well, yeah. So in the secondary market, yeah, there's obviously you try and understand where the collector is, what their collecting process has been. And once you've had some experience in it, you can pretty much figure out if
things have been stored well or not. And then you can obviously physically visit the cellar, the location where the wines are, to check it out and verify the conditions of the wines. And then you obviously, on the condition, you're matching up and authenticity, you're matching up the provenance
with the authenticity. So on authenticity, you're looking at the capsule, the bottle, the color of the liquid, the sediment, the label, and you're making sure that everything matches according to the story of the provenance as well. And so, yeah, an auction house can't authenticate anything, but they can go through the process to ensure that they sell it under their terms of guarantee. And the terms of guarantee is obviously validating. What?
Yeah, the vintage, the year, etcetera, and the fact that obviously, it's in good condition. So on the condition side, you can get a bottle that looks absolutely perfect from the outside and yet has been stored too warm and has gently been cooked. And so generally sampling from different areas around the cellar will give you a good indication of the condition of the wines. So
I think I wrote on some talking points. Essentially, we were talking about Rudy Kirwan, who was released from jail recently, is back in Thailand or Indonesia, where he's from notorious. In fact, he was right here in my neighborhood, by the way. He was just down the street. He was. And he's now doing events, apparently in St. Singapore, Hong Kong, Taiwan, Taipei, etcetera. Well, the other day,
somebody sent me a picture. It's a real estate developer friend of mine. He was in Singapore or Shanghai, I can't remember, and was talking about it. And the guy says, oh, I know him. And they had dinner with him the next night and he said his palate was phenomenal, but let's not want to talk about Rudy. He was, you know, when they found his house here, they found paper and they found corks,
they found recipes. And I'm thinking, okay, so if you sell a 1945 Romani conti, a DRC, and you open it, do people even open these things? So they just keep. Oh yeah, I mean, I think, yeah. So you're referencing a bottle which is sold for the highest price ever, which was the Romney Condy 45, which sold for 558,000. I was a happy auctioneer on that day. And so, yeah, that one actually. Yeah. Why was it so valuable? Was, yeah, obviously it's an incredible wine with a very, very rare provenance,
but it was very rare production. So tiny, tiny production from a great vintage. But the reason for the value of that bottle was actually because the wine came from, directly from Robert Drouins Seller and Robert Drouin. The Drouin family used to be the agent for de mes de la Romney Conti throughout France and Brussels and Belgium. And so the bottle literally moved from Domain de la Romilly Conti, 5 miles down the road to the Durand family cellar, and
rested there all its life. So that gave it, that province, gave it a special value in terms of, of prestige and condition. Would that happen, by the way, just off topic of a second, would that happen, for instance, from a wine from the cell of Tour d'Argent, it's such a direct relationship from manufacturer to retailer or restaurant. Would the seller of tour d'argent carry such pedigree along with
it? Sure. I mean, I think wherever you have such special problems, I would say that the problems from Robert Droin, Seller, in the proximity to Romney Conti and one owner would be almost the highest level you could get. But de la Tour d'Argent, for sure, if you were selling some treasures from that seller that had always rested there and gone directly from producer to their sellers, then you have a similar sort of provenance, and then you've also got celebrity
provenance, which can add value as well. It's interesting. 45 DRC $558,000 and you know, Burgundy was not as interrupted during the war by the Nazis as St. Bordeaux was, was it? I think it was not kept alone, but it was. Well, in fact, funnily enough, I mean, yeah, there was obviously, there are stories on both sides, but Maurice Drouin, who was Robert Drouen's father, was actually, he donated some vineyards to the Hospice de Beaune later on in his life.
And the reason he did that was because during the war, he actually went through the tunnels of the Droia cellars that connected to the hospices de bone. And the people at the Hospice de Beaune took care of him while during the occupation of bone. So they bricked up all the cellars and put false walls in there. And so, as a thank you for really saving his life and looking after him, he then donated vineyards to the hospice de bone. So it's an interesting story on the relationship there.
This is what the show's about. And we're going to get to the value of blockbar and how, in contemporary times, we're going to be able to protect the provenance of a wine. But we're going back to some pretty interesting parts and history of wine. I had Mae Elian Lanka song on the show at 98 years old, telling the stories, and I really think that's what wine's about. I think that this story of Durand, in fact, adds to the provenance and adds to the terroir of the wine, because these stories
are rolled forward by generations. And though you're not going to taste something specifically in a wine, you have to believe that the influence of the stories in this history are reflected in the winemaker's philosophy and attitude toward what has happened. Oh, for sure. And I think when you do taste these old wines, your memory goes back. It's like looking at a painting in a museum. Your mind goes back to the conditions of that
time. And so you think about how the vines were cultivated in 1945 or before in the 1920s, and what equipment were they using in the vineyards, and how about the health of the vineyards? And what was the yield in those days compared to what a yield would be today. And so I think it's a really interesting historical lens to look at as. To look at how these wines were produced and how they age so
brilliantly. And yet these very old wines are still enjoyable, consumable and fresh today if they've been stored well. Am I wrong in saying what I think? I think the bordelaise came up with copper sulfate, like, what, in the forties or early late thirties or something. Is it safe to say, though, the wines, particularly a burgundy of those vintages, let's just say, you know, the mid 20th century, were pretty much organic, or pretty
much. By the way, I think all wine was pretty much organic in those days because they were only using natural ingredients in the vineyards. So and so. Yeah, where I think they went to in the seventies. Yeah, obviously the seventies was challenging period, because every economy
was struggling and it was very tough times. So a lot of wine wasn't selling for very much money, and everyone had to cut costs, and they cut costs on their vineyard treatments, on their labor, on their corks, wherever they could to produce wine. So really, the seventies was a low point. But one of the interesting things, if you sort of pull forward to today, is, I actually think that if you're $20 today,
you get a much, much better wine that's ever been produced before. And so the health of the vineyards, the knowledge of vineyard management, of getting good fruit into the winery, and of vinification, it actually means that today, the $20 bottle of wine is a lot better than the $20 bottle before. And the value of wine today, all of us are drinking way better than anyone did before us. So
that's a fascinating question that I often ask winemakers. They're here because they, and I don't like to talk about soil and micro exchange of nutrients at the taproots. I mean, that's not interesting for the listener. I mean, if you are to visualize. But what is the end game like? We're going through these processes where we try all these methodologies. And so the question is, what's the end game? Are we trying to produce the best wine we can produce from the terroir? Are we trying to produce
a wine that has a certain character? Are we trying to continue to extract from what we're given? Or are we just trying to present what that time and place meant at the time that they did it? But just. You're saying now the quality of wine has gone up for the value based on these techniques? Yes, I think certainly that's the case. And I think what are you trying to produce is largely dictated
the person producing it. So, yeah, some people definitely want to produce the most, the most authentic wine from that particular terroir in that given year? And that's certainly the case. I think other people want to put their imprimatur upon the wine and want to make a style of wine that maybe overrides the tehois. So I think the person making the wine and the style of wine and what they're trying to achieve is really the human
element in it. And obviously, from my perspective, I think the greatest wines are a reflection of a given grape variety or great blend of grape varieties from a specific vineyard sites in a given year. And the transparency of that is, I think, the finest thing about. About great wine, I think you might have the opposing views, the contrasting views that I might have, which is, I have this very romantic viewpoint of wine and what it should be. And then I have the realization
that it's consumer driven and we have to produce what people want to buy. And that has created all kinds of interesting products on the shelf these days in various packaging forms and flavor profiles. But all in all, when it's all said and done, eventually that glass of wine has to do what it's done for six to seven to 10,000 years, depending who you ask. And that is, you know, emote some to tell you something. Exactly. And, yeah, I mean, I think my children are younger.
They're 23 and 20. And, yeah, I'm sort of telling them that every day, every glass of wine is something to be enjoyed. There's something to be learned from it as something to be shared and something to be enjoyed. And it's one of the most. When I was 18 and thinking about getting into the wine business, I figured out that if I drank a bottle of wine every day and lived till I was 75, I'd drink 20,000
bottles of wine. I was pretty sure I was going to drink those 20,000 bottles of wine, so I figured I might as well learn something about it and make them enjoy experiences, and that's worked out really well for me. Yeah, it's actually really funny, because this show started because I sat in the tasting room for 35 years at 09:00 in the morning every Tuesday until 02:00 unless I was out of town or sick.
And these winemakers from all over the world are coming in from Burgundy, from champagne, from Bordeaux, Napa, and they're telling me stories, you know, across the tasting table. I'm like, this is really silly. We should just open a microphone and tell the same stories over again. And that's the birth. The birth, the birth of the show to tell the story. We're kind of an opposite spectrum of our careers. I want to be an actor now, so I'm actually going to acting school. Really? That's
fantastic. I love that. And voice acting. And, you know, I don't know how I had time to work until I sold the company. Now I don't have time to do anything. But anyways, I thought that was anecdotal. This is. How long do you think? Well, first of all, let's ask this question. Sotheby's, how confident, on a percentage basis were you that virtually every wine you sold through there was what it was purported to be?
I mean, I think we were very draconian. So if we didn't believe something was either authentic or in good condition, and we had any doubts about it. We did not sell it. Are there some things that slipped through the cracks? Yes, I'm sure there were. There were very, very few. And,
yeah, I would. Yeah. If you're an auction house that is trying to sell wines that are with verifiable provenance, that are authentic and they're in good condition, you can have a very, very high success rate in the 99 plus percent. Yeah. And obviously, if you have any doubts, you try and verify the problems or authenticity. And if you're able to verify it, then you shouldn't sell it. Now, not every auction house or every fine wine merchant has the same
approach. Some people have an approach which is, hey, look, you're sold as is. I'm just going to sell it, and if there's a problem, I'll deal with it later. Yeah. That's a different approach to the auction business, and that's certainly what some people do. So, I mean, yeah, from my perspective, yeah, I was, in my days at Sotheby's, we did everything we could to sell only authentic wines in good condition. We went to a house in New Jersey to look at
Eisenhower paintings. I mean, this guy must have had $50 million worth of paintings, and he was probably the United States preeminent collector of the painting, of the painter and. But he invited, I think it was the north american chairman of Sotheby's or Christie's, I can't remember, I think was
Sotheby's to be the keynote speaker of this dinner. He. We went to, to sort of support the fact that, yes, these are probably authentic, or they are authentic, and they were bought through the channels that we would consider the provenance and we would consider the availability, what the painting was. And in the same time, a painting from the same artist came up at a local auction house here at a very
reputable auction house. And the auctioneer, who's a friend of mine for years, you know, he couldn't and wouldn't necessarily authenticate the painter, the painting itself. He just said this. We're under the impression that's what it is. It came from this estate. And that's all I can guarantee is the provenance or the authenticity of the painting. When I brought that up with the investor in New Jersey, I told him, he goes, I didn't even finish. He says it's a terrible fake.
So he already knew across the country that this painting was for sale, was coming to auction, and he already knew it was a fake. Did you have that kind of insight when you were bringing items into review or to understand, or that. I mean, how many 45, for instance, 1945 drcs are there? But was there any sort of. I mean, I mean, yeah, there are. There are obvious fakes which one can see with a naked eye. Some. One
can, some can, yeah, you can see 10ft away. And obviously some you use a loop to look at the label and some are very easy. And generally speaking, when you get counterfeit wines, you know, unless it's a great collector who's perhaps been given a few bottles by other people, they tend to source wines from a concentrated number of people. And so if some people source wines from people who are selling counterfeit wines, you'd find an abundance of them. And that was relatively easy to spot.
Obviously, if you've got a great collection of authentic wines with a few scattered in, more difficult to do them until you do the bottle by bottle inventory. But you can normally spot where the counterfeits are. Obviously, counterfeits got increasingly more sophisticated today, but it's the conversation between the provenance, where the wines have been bought from and sourced from, the appearance of the wines, the story about the
wine, the behavior of the collector. So it does become pretty obvious to a seasoned professional that what you're dealing with, what to look out for and to avoid those issues. So I would say, yes, there's, you know, it's. Yeah, for a seasoned professional, it's not that difficult. Is it the same type of buyer that
would collect? And I've said this before on the show, I just learned that I'm a collector because when the gentleman bought my company, he did not buy all the stuff I had collected during COVID And I have some wonderful grand cruz and some classified growth Bordeaux and all kinds of really cool stuff. And so I had to find a home for it because I don't. Never had a seller at my house, I had a warehouse full of wine.
But is it the same kind of buyer that might show up at a Sotheby's wine, the spirits auction, that would utilize blockbar to authenticate, or at least to have confidence in the provenance of the wine and spirit. So I think that's an interesting question. The buyers are skewing younger because every. Every seller of fine wine and spirits needs younger buyers. And so blockbusters. One of the reasons why I joined blockbar was because I dealt with problems, authenticity and condition issues every
day for 32 years. And so Blockbuster's model is to use blockchain to provide a guaranteed chain. Blockbar only sells directly from producer to consumer and is the direct link between the producer and the consumer. So using blockchain is validated that the bottles, the case, the cask, comes directly from the producer and it gets sold directly to the consumer. And then, because blockchain is
immutable and you can add onto it every time there's a transaction. So if someone gifts a bottle or a case or a cask, or sells it to another person, then that transaction is recorded on the blockchain. And while the bottled case costs remain in the ecosystem of blockbar, then obviously there's guaranteed provenance and traceability and transparency back to the producer. So in terms of who's interested in that, I think
everyone's interested in it. I think, obviously, the people who already have a lot of wine and already have wine in their cellars, maybe they're towards the end of their collecting life and would be less inclined to use blockbuster. I think it particularly appeals to the younger collectors who are digitally savvy, who don't necessarily want to store their own collections of wines and spirits, because they don't know necessary where they live in two or five years time.
And for them, we take care of all the storage and the insurance and the security of that, and then they have a guaranteed traceability on the provenance and the authenticity. And so I think it's 90% of our audience and 70% of our buyers, and millennial and Gen Z. So, yeah, I think it
is. There's definitely a crossover in the marketplace. And I think as things go forward, if you look at Bordeaux on Premiere Bordeaux Futures, anything sold in cask, the blockchain and NFT model is a lot more efficient. It gives liquidity from the day one. If you were to buy through a traditional channel Bordeaux one, primo futures, essentially, you are illiquid for the first two years until you take physical delivery of the wines.
Under the blockbuster model, you buying an NFT, which is redeemable for the wines, and that NFT can be traded the next day, it can be gifted the next day, etcetera. So it provides liquidity in that process. You can have fun with selling barrels and costs and fractionalizing them, and further fractionalizing them until they're bottled, and then converting the nfts for the cost into bottles. So you can have a lot of fun with gamification and the
evolution of it. And so I think it obviously appeals to a younger, digitally savvy audience. But for me, I've just moved my wines from New York down to Florida. I relocated to Miami and I now physically had to move my wines down here and now I need to physically go through them because I won't keep them all. I'll sell some and I'll definitely consume some and I'll move some wines
around to different places, but I have to physically do that. I would much prefer to do it through my phone or through my laptop. And so I think it definitely appeals to an audience who wants the security and convenience of buying wines and spirits. Obviously, it's not for bottles that are going to be consumed tonight, but it is for bottles that can be collected and consumed at a later date.
Just in itself. The idea of NFT, and I think you probably have arrived at the fact that baby boomers like myself may not even understand what you're talking about, that the idea of blockchain is a digital cloud that no one really gets. I get it. I understand what it is, but it's also yours. I mean, you've got so many pieces of moving parts. Consumption's down amongst millennials and gen zs for alcohol and fine wine, but you've found a niche that they understand, so this
might be very good for them. I think it's a great idea, personally, but, yeah, the idea of NFT and blockchain is probably foreign to most people. Yes. I mean, well, I'm 63. I'm a boomer. I'm 60, not 63 yet. I'm born in 63. I've easily understood the platform for blockbuster when it first came out when I was at Sotheby's. And I have a digital wallet. Nothing is intimidating. It's actually very easy to use. We also take credit cards and they accept credit card work,
transfer payments. So it's really not that confusing. The blockchain provides the record, the ledger, which is immutable. The NFT has a smart contract attached to it which enables secure, fast transactions, and it acts as a token, which is that token can be gifted, it can be sold, or you can redeem it and you get the physical goods. So every NFT we sell is asset backed, so the value of the NFT is the asset
behind it, so the bottle decays the cask. We don't sell any NFTs that are not, that are just digitally native and that's where they've been sort of criticized. So, yeah, I think from my perspective, yeah, it is a new direct from producer consumer channel that has some benefits, not just in liquidity and the traceability about it. Essentially, if you look at someone like Berry Brothers and Rudd in the
UK, they've been selling wine since 1698. And you could be buying your Bordeaux futures or on premiere through them all. What we're really doing to that process is adding, you know, guaranteed provenance, authenticity and traceability and transparency to the process. You look at Sherry Lehman, the wine merchant in New York, that, sadly, no more. The buyers who are most disappointed in that were the ones who bought borrower futures from the 1516 1718 vintage and never
received their wines. That wouldn't happen with a blockchain model. So I think there are definite benefits to it. And there's an audience which is growing. One of the things you mentioned, which was about the millennials and Gen Z consuming less, I think that is definitely true. Certainly less than the boomer generation. There's more moderation, there's more abstinence, there's more alternatives with
marijuana, mushrooms, low and no, etcetera. And so I think every wine and spirits producer really wants to reach the millennial Gen Z audience because they're going to need many more of them to participate in the audience because they are going to consume less of wine and spirits. So I think the audience is very, very attractive to every producer of high quality wine and spirits. I think that, like I said earlier on the show, that consumption ebbs and flows. I mean, we're in this process of non
alcoholic, which I don't understand. I've tasted some. They're palatable. I don't understand why you bother, but that's just me. Canned wines, they're working at Cornell University on extending the life of the food grade lining for a can. And so I'm not sure what value that has. I think it ebbs and flows. It always has. When I was stocking my dad's shelves in the seventies, we had one point five s of Gallo Rhine wine in red burgundy. That was hot. Then
we had wine coolers, and then we had Boone's farm. And it just ebbs and flows. We're just going through those different cycles. And I do believe that the millennials and the Gen zs and anybody after them will eventually land on this concept, that there's something very valuable to the proper glass of wine, an honest glass of wine and an honest scotch, or properly made bourbon that will transcend all of the sort of social, you know, irregularities that go on in our industry.
But how does, you know, you said something very interesting. Because I just saw on Netflix or something, this story about this Northern California wine shop. I had not heard this story before. Probably grouped in the Rudy type things and the Sausalito warehouse burning and those things where he was selling out of a shop, had a wine shop, and he was getting money for all kinds of on Premier Bordeaux and all kinds of futures on other wines and never buying them. This would completely
circumvent that problem. Right. Once you get this NFT, you own that wine, it exists. How does that bottle start? Are you getting it right from the supplier and the manufacturer? Yes, we're only producer direct to consumer, so every single bottle comes directly from the producer and the NFT is minted from the producer's wallet. So. And then as soon as it is. So
if it's in bottled, we receive our warehouse and we store it. If it is in cask or barrel, then the producer stores it at the winery or distillery until it's bottled and then we take possession of it. But because it's producer direct, then no producer is going to work with us if we're not paying our bills and doing an honest job. So. And so you have that guarantee that it is direct from producer, so it fixes the provenance and authenticity issues and the fact
that it's physically available. And so, yes, I think you're referring to a business. It was called premier crew. Yeah, that's it. Yeah. Which was. Yeah, which they were, unfortunately, did not deliver on a lot of wine at the end of their lifespan. But that wouldn't have. Indeed. And some. And some other experiences along the way. Good looking women. Exactly. But. So if I'm interested in taking advantage of blockbar and I want a McAllen, you know,
I don't know, all I have here is 25, so it's really. Maybe. Well, that's worth it. Just a couple thousand dollars worth of scotch. I would want to protect that. I would get it from McAllen through you as a. As. As the vendor. Yes. Yes. So, I mean, essentially, we would have to have a relationship with McCallum. McCallum would sell it to us on our platform and then we would store it for you until you want to redeem it and take possession of
it. When you want to redeem it, you let us know where you want it delivered to. Essentially, it gets delivered to you and the NFT gets burned. And so we don't take any wines from the secondary market. And so we're not a secondary marketplace. We take wines only direct from the producer and then we do have a secondary marketplace if someone wants to sell their bottles or their case cost. Yeah, well, it's still in our possession or still the distillery, but once it's left
our ecosystem, we don't validate any further. Right. So I want to redeem my NFT, I get my bottle of 25 McAllen. And now that all bets are off at that point. Exactly. Yep. But yeah, then you mentioned earlier you can gift it. I could sell it. The NFT. Yes. And the buyer, that NFC has complete 100% confidence that this is, this bottle exists and it's in possession of blockbuster. Yes, correct. And so, yeah, and so when you do a transaction, when you sell due to the smart
contract, the transaction is. Yeah, it happens all online and in real time. So there you see the NFT transferring from. If I owned it and you bought it, I would see the NFT being transferred to you. It would leave my wallet. It would go to your wallet. The funds would come to me. So the way it works on the secondary marketplaces is the blockbuster charges 5%. Sorry, 10%. We charge 10% for sale, 5% goes directly back to the producer and 5% goes to blockbuster, which
covers our storage, insurance costs. And that's all automated. So you can literally, the smart contract takes care of all of that. And so it's a very efficient and fast process. Same with, if you're gifting something, it's the same process you just gifted someone. They accepted and the transaction automatically updates on the blockchain. Fascinating concept. And very. I mean,
it solves the problem. And I was just thinking as we were talking, the whole issue in America with three tier process for alcohol lends itself to how many hands are going to be touching a product like this and potentially add to a level of fraudulent buying. I mean, I'm going to guess that if I'm at R and DC and I'm getting my McAllen, or if I'm at southern, I'm getting my opus. Pretty reasonable expectation that the wines of what it is, but it's not been
traced. It's possible that somebody interrupted it and did something that made it fake. And what we're seeing more and more is nowadays there may be a six bottle case and maybe one bottle is counterfeit and five are good. And so someone along the chain is doing something. So the traceability and transparency is super important. And you've also, obviously in that three tier system, you've also got condition to be worried about because when the wines
are moving around, how are they moving? What temperature? I've moved down to Florida. It ain't cool down here. No, that was a very english thing to say, too. It ain't cool. Well, actually, in my 35 years of buying and selling wine monthly, I did buy a truckload from Paso that was a it was an aged wine, so it was a little more sensitive. And I, fortunately, I usually did not taste wines that were domestic
because I figured they're only coming down the street, so big deal. But most imports I would taste when they landed to make sure, you know, whatever, I got what I ordered, but I decided to taste this one. And it was. I tasted ten bottles from ten different pallets, and they were all shot. They were all had turned. And it turns out that they had stopped on the freeway in 120 degree heat or something. And then, of course, inside the
container, it's more like 200. And it just baked it all. And thank goodness, contractually, I was not obligated to take the wine, but that could happen. Yeah. Yeah. And it's amazing how many places still today and, yeah. How many warehouses
and transport vehicles are not temperature controlled. And so, yeah, the common practice, certainly what we developed at Sotheby's was we would put temperature loggers in different cases, in containers and in shipments around the country to make sure that we could then get the readings of the temperature of bottles in transit. And, yeah, as you know, it's just like, yeah, very hot heat can
damage a wine pretty quickly. Obviously, you drink it immediately, little damage, but it will age much, much faster, and it's not a very good drink after a little while. How does someone learn about block bar? I'm a consumer. Well, one of my great customers has an incredible collection of scotches, japanese scotches, in his. I see. He would love this. He's always looking for something interesting, and particularly in the burgundy side
of the wine world. But how does somebody learn about blockbar? How do they go to mission wines and spirits and buy their McAllen? So blockbar, it's an online site. So we have, it's blockbar.com. and yeah, we have an faq there. Super easy to use. We also have an app which you can download. And then we have a concierge service. So we're pretty responsive. We're a young, young startup, so we're pretty energetic and enthusiastic. And so people can always email me@jamielockbar.com. j A M I e
or just go to the website. And it's really very self explanatory. There's nothing very complicated about it. You can search or filter for different producers, different products, you can look at the secondary marketplace, you can make offers on things. And if there's anything confusing, we just put live. Yes, on Monday a sale with Shadow d'Esclan of their top of the range wine Garrus and we're selling one barrel, which is split into four quarters, and so
people can bid on a quarter barrel. And then it's in a leaderboard technology, which is sequential auction. And then the auction will close in a couple of weeks time, and then the buyers in June get to choose their different bottle sizes. They can have them bottled in bottles, magnums, three litres or six liter bottles. And then during the harvest, they can go and visit our chateau d'Esclan and have a tasting, lunch and tour, etcetera. So there's an experience thrown as
well. Yep. The platform enables us to do some fun and interesting things and also physically connect the bars with the producers through a series of events. Seems like it would be really the only way. Particularly this collection. This gentleman I'm talking about, he put your thumb on the door and the door opens, because it's biometric. And all the things that go along with collecting screaming eagle and first World War does,
you'd almost want that. Actually, it's kind of interesting, because when I bring it up, I don't get a lot of head nodding when I say, look, you need to understand the provenance of this wine. I do business with a distributor here called Duclos. He charges a little more as part of the Moex group. Exactly. I pay a little more for the Bordeaux, but I'm very confident that it's direct from the winery and that as a distributor in Los Angeles, I can rely on this authenticity.
But if I'm a consumer and I don't have access to that, I would only want my high end wines and spirits to go through a process like that. And if I do bring them in to drink or to have my cellar, I take responsibility. But until then, I have complete confidence of what it is. What's going on with these? I don't know. They're not three d and some are augmented reality, but they have those sort of. I guess they are 3d stickers. It seems like that has opportunity for.
Fraudulent use as well, NFC stickers and RFI. I think people are using different methods of traceability, and the wineries are embedding different technologies into their labels, bottles, capsules, to secure their products. And so I would commend all of the activities around using technology to try and maintain provenance, maintain the integrity of the bottles and their authenticity. Yeah, at the end of the day, I think they're all
useful. Obviously, from my perspective, the most useful is no, it comes directly from the producer and goes directly to the consumer. However, many times it trades under the. Blogba model, having this conversation is making my mind go back to my seller. I got a couple of 2015 margots there. I'm like, I don't know, man. I don't remember where I bought them from. But I think that's the old fashioned way to do it, is make sure you trust the person who's selling it to you. And if
a deal looks too good to be true, it probably is. Probably is. So wine spirits, which is. Well, this is Gen Z and millennials mostly. I'm going to guess that distilled spirits are probably lead the inventory count, the SKU count for blockbar. So Blockbar was founded by the founders, the owners and principals of duty Free Americas, which is the largest free business in the Americas. And so that business is 99% spirit. So it was founded based around solving the problem for spirits.
My background is really in the wine business. And so to date, we are probably 98% spirits. And going forward, we'll be launching more and more wines from September onwards. And, yeah, our aim is we'd love to get to around 50% spirits, 50% wine. Yeah, the market will actually determine where we end up on that. On that. But that's all, that's our
intention. You know, the question always, I never ask it regularly because I don't understand it, but I don't know how there's more room for high end spirits and get. And these guys are getting. Building the brand, getting their placements and selling offer, you know, lots of money. Look at dow one for a billion dollars, or in that range, George Clooney's tequila. I'm like, how is there room, how's your differential room in the world of collecting spirits that it's created such demand? I just.
I'm just old fashioned, I guess. I think the proliferation of producers is going to. Yeah, it's going to rescind because I don't think the market can sustain so many different producers. Yeah, but I think the interesting thing about the millennials and the Gen Z audience is that they are willing to premiumize. They do want to drink better. They like experiences. They like sharing things with their friends. They also have a differential price point concept.
So the boomers, we grow up with certain things at certain price points. My son and daughter, they compare the price of a bottle of wine today to maybe a price of a pair of sneakers. Now, for me, a pair of sneakers is $125. For them, a pair of, exactly. For them, a pair of golden goose sneakers is $600. They have a different relationship with price value and wine equations fits into that. So
I think you mentioned yellowtail earlier on. I think the yellowtail end of the market will be more difficult for people going forward. I think for people who are making something that is a gender authentic product with an authentic story about quality, whether that's in wine from a specific vineyard place site, or it's a spirit that's been aged in a particular way for some time, then I think the storytelling is very important to the millennial and Gen Z
audience. They want to align their values with the values of the producer. They want authentic storytelling, not a story that's essentially. We used to produce this, we just relabeled it, and we're now charging more for it. And so I think going forward, I think, yeah, there's interesting things to be learned from the spirit side of, from the wine business and vice versa going forward about what
authenticity really means. The woman I mentioned, the beginning of the show, Jessica Kogan, she had come from Donna Karen, or one of the fashion companies that she went to, wine. Brilliant digital marketeer. Now she's on the consulting side. But we both agreed that this social networking, marketing, all those things that go along with it, the influencer side, it's going to
implode. It's already starting to implode in that it's almost impossible to get your acquisition cost through Facebook because you spend so much money trying to find somebody, and then they're so disloyal. Generally, they're disloyal and they're looking for the best deal. Groupon did that to us. And then in the wine trade, particularly companies like Wink, which was buying 50 centiliter stuff from the center of Spain, bottling it three ways to sundae some interesting labels and pawning it off as
$15 to $20 wine. You can only fool people for so long. When you open the bottle, you kind of go, this really isn't that great. I kind of got ripped off. And so there goes your lifetime value of a customer, there goes your subscription model, because they only stick around for a month or two, and all of a sudden, a $250 million gross revenue company goes out of business. And I think there's going to be more of that. I think the
consumer's tired of being fooled. I think the consumer's tired of brands that aren't real. I have no problem with white labels or private label brands because you can buy really good juice and put it that way. And that's you. You end up with, you know, a nice wine, but that comes from the passion and the objective of the bottler. And the person making the brand. Yeah, exactly. I mean, I think the. Well, as you said, the authenticity of the storytelling, and it has to be authentic, and it has
to offer value for money. And I think with private label, you see private label being a bit more challenging because people are buying cheap liquid and putting it under a no name brand and then trying to sell it. I think the own label, where people are disclosing their own brand, is actually much more relevant, because even if it's a less expensive brand like Kirkland at Costco, they're still proud of their brand, and they want the quality, for
the value, for money to be there. And I think so. I think the old label, where it's disclosed what the brand is, actually has a value. But I agree with you. I think the. The younger generation will premiumize. They will spend more money on different bottles of wine and spirits. But the storytelling needs to be correct, it needs to be authentic, and it needs to align with their values. In fact, my comment is, I bought this on Groupon for $5. Is not a story that you want to tell.
Definitely not. In fact, during Christmas, after I sold my company last March, last May, keep an eye on what's going on. And I, in fact, listen to seminars all the time to keep up on the marketing methodologies, AI in particular. But a club started here in the United States called Cheapo Vino. And I'm thinking, who wants to say at dinnertime, with a guess, I got this on. Well, maybe it's Vino Cheapo, one of the two. That's not a story. I mean, that's just not telling a story. We're already
at 50 minutes here, so we're. We've got to wrap this up. I will tell you, I'm going to Bordeaux in about a week, week and a half. Uh, we're going to visit Lagrange and Cheval Blanc and Angelus. So if you need anybody, you know, to run flanker for you while we're walking in there, of course. You know, I was, uh, I was actually just there, um, tasting the 2023 a few weeks ago. And I've got to say, bordeaux is making. Is making exceptional wines. And for the price point, it's sort of
interesting. They used to be, yes, about 70% of the secondary market used to be Bordeaux, and now it's down to about 25% of the secondary market. But the value for money in Bordeaux Bordeaux is probably cheaper than in value for money. Burgundy, California, and champagne. So you'll have a great time, and you'll drink well and you'll drink. I think they're
making better wine than ever before. I'm very proud of myself. Two of my local friends that just, you know, they're not wine aficionados, but they're starting to learn and they've, they're very excited about this trip to Bordeaux because I've kind of moved them off of the Napa cab, you know, profile into a more, you know, structured, acidic backbone. But fabulous conversation. Jamie, I really appreciate the time and
hearing about blockbar and what's going on. I think it's a really solid approach to collecting and buying. Paul, it's been a pleasure talking to you and thank you very much for having me on your show. Much appreciated. Cheers. Thank you for listening to wine talks with Paul Callum. Cary. And don't forget to subscribe because there's more great interviews on their way. Folks, have a great time out there in the wine world. Cheers.