In July 2023, industry veteran Jamie Ritchie joined BlockBar, the asset-backed NFT wine and spirits marketplace. Ritchie, who most recently served as worldwide chairman of wine and spirits for Sotheby’s, departed a channel steeped in tradition for the platform that directly connects producers to consumers. BlockBar sells wine and spirits authenticated through the blockchain and offers its buyers storage, insurance, global shipping, and access to a thriving secondary marketplace.

After spending more than three decades at Sotheby’s building its wine and spirits business, Ritchie was tapped to drive expansion of BlockBar, bringing his valuable connections in the global wine and spirits world to the platform. Several months into his new role, Ritchie connected with Market Watch for an update.

MW: You’ve moved from the very traditional channel of a luxury auction house to a cutting-edge platform for sales of wines and spirits. Can you tell me what prompted the move, and what you envision for BlockBar going forward? 

RITCHIE: I was obviously interested when BlockBar launched this new channel of distribution by using blockchain to essentially guarantee provenance, authenticity, and condition in the sale of wines and spirits through asset back redeemable NFTs. And at the end of the day, I had been at Sotheby’s a long time. It was time for me to move on to something different—still a global business, still in the highest quality wines and spirits—but with a different business model. I like the people, like that they have a young, innovative team, and I think it is a new distribution channel that is at the very beginning of its lifecycle.

MW: BlockBar was founded in October 2021 as the first direct-to-consumer NFT marketplace for high-end wines and spirits. How is business so far after these two-plus years?

RITCHIE: Since its inception, BlockBar has experienced tremendous growth, establishing itself as a prominent player in blockchain whilst demonstrating the clear advantages of using blockchain to guarantee provenance and authenticity in the wines and spirits business. The platform has successfully partnered with the world’s leading wines and spirits companies, including Diageo, Moët Hennessy, William Grant & Sons, Bacardi, Pernod Ricard, Sazerac, Treasury Wine Estates, and more. Noteworthy accolades include recognition from Moët Hennessy owner LVMH’s La Maisons des Start Up programme and the Diageo APAC (Asia-Pacific) Supplier Award. 

The team at BlockBar has expanded to meet the rapid growth of the platform, recruiting an impressive customer demographic of over 90% Gen Z and Millennials. It’s developed fun pricing mechanics using sophisticated technology and launched an app. But we’re just getting started. Expect to see more wine releases, interesting and fun spirits releases, as well as community events and experiences this year. 

MW: How precisely is the BlockBar model different from auction houses or other NFT marketplaces for whisk(e)y?

RITCHIE: BlockBar operates a unique model, directly sourcing each release from producers and minting NFTs directly from their wallets. This approach ensures guaranteed provenance, authenticity, and condition for every sale. The platform is underpinned by transparent blockchain technology, visible on each release, further reinforcing the assurance of provenance, authenticity, and condition. The bottles sold on BlockBar are securely stored in state-of-the-art storage facilities, offering owners simple reselling and gifting options to manage their collections seamlessly, efficiently, and cost-effectively. A notable distinction from traditional auctions lies in BlockBar’s direct-from-producer model, which provides the ability to trace ownership back to the producer, regardless of how many times the bottle changes hands. By ensuring we do not take collections by third parties or individual sellers, this meticulous process enhances trust and accountability within the BlockBar ecosystem. BlockBar also sources exclusive bottles, barrels, and casks which cannot be found with any other NFT marketplace, auction house or retailer. 

MW: How is BlockBar performing compared to the numbers shown by traditional auction houses in terms of sales and number of bottles moved?

RITCHIE: As a 2-year-old startup, we’ve built an impressive owner database, having sold over 2,600 bottles on our marketplace to date. Anticipating significant growth this year, we acknowledge that there’s still a journey ahead before reaching the sales and reach of traditional auction houses established decades ago. Nevertheless, our current focus is on becoming the leading blockchain-backed online marketplace for wines and spirits. 

MW: Whisk(e)y seems to be the most prominent item for BlockBar, is that correct? 

RITCHIE: At launch BlockBar set out to establish itself as the No.-1 blockchain backed marketplace for spirits, starting with whisk(e)y. While the initial launch prioritized partnerships with renowned whisky producers such as Ardbeg, Glenfiddich, The Dalmore, and Johnnie Walker, we are working on launching wine as a broad category on BlockBar. 

MW: Can you expand more on the opportunity for both spirits and wine within the channel going forward? 

RITCHIE: With wine and spirits producers at the top level, there’s been a fundamental shift over the years, where the power has shifted from the distribution side of the business back to the producers. Now it’s truly a global marketplace. The producers are now more interested than they ever were before in understanding who their clients are—who bought their bottles or cases, who owns them today, and who’s actually consuming them. That has coincided with a desire to go direct to consumer. At the same time, I think there is a desire for more transparency in the process around provenance, authenticity, and condition, and a desire that wines and spirits not move around the world so much in their life. [The goal is] that they stay close to the location of production until they’re ready to be consumed, which is obviously better for the environment. 

Blockchain enables transparency. The BlockBar website is a direct-from-producer consumer website. The NFT is minted directly from the producer’s wallet and goes directly to the first buyer. The buyer is guaranteed and assured that the product comes directly from its producer. So long as the NFT remains within the ecosystem of BlockBar, that traceability can be passed on to different people. Once someone’s bought a redeemable NFT, it can be stored, and BlockBar will take care of that. It can be gifted to anyone around the world, and obviously that’s an electronic digital transaction so the physical bottle stays in the same place. It can be resold on the marketplace platform and it can be redeemed. In that case, the buyer actually takes physical possession of the bottle, in which case the NFT is burned and the bottle gets delivered to a location of choice around the world. The advantage is the bottles don’t move, they stay in the same location until the point of redemption or effectively consumption, therefore the provenance, authenticity, and condition is guaranteed directly from the producer. 

People can say that’s been going on around the world for many years, and yes, it has been, but it hasn’t been with any transparency or traceability. People purchasing wines en primeur has been going on for many years, but there are also many examples where that hasn’t worked out so well. 

MW: You bring up en primeur wine sales, but thus far BlockBar doesn’t have much wine on offer. Will that change? 

RITCHIE: My background is more wine than spirits, and I’m working across both the wine and spirits categories. BlockBar was founded by the principles of Duty Free Americas and the relationships that the founders have is with the spirits producers rather than wine producers. Hence, over the first two years of their operation’s founding and growth, they’ve been very focused on the spirits business. It’s something that we certainly want to continue with and grow, but we will also look to add more wine. 

MW: For wine futures, the wine will remain with the producer until it is bottled. What happens then? 

RITCHIE:The product stays at the winery or distillery until it’s bottled. After it’s bottled it gets shipped to our locations. At the moment we’re storing in Singapore. We will open up additional locations close to the site of production, so in France, in the UK, et cetera. We believe that the ideal model is that bottles don’t travel far from their source of production until they’re ready to be consumed. We’ll be looking to add additional warehouses over the next years to enable that model to take place. 

MW: Which brands make sense for this channel? What level of luxury or level of rarity needs to be there? 

RITCHIE: If you’re going to sell using an asset-backed NFT, there’s no point in it [if customers] are buying something for immediate delivery. Essentially, the brands and products we work with [sell for] more than $100, at a minimum, and are [products] that have a lifespan and a collectible nature. Obviously, wines and spirits are essentially made to be consumed. Roughly 30% of what is available to be redeemed by BlockBar has been redeemed. 

The business has moved. It was founded in the times when cryptocurrencies were in vogue and then evolved when NFTs were in vogue, and now it is really settled down to become a collector site. It’s focused on real collectors, and obviously it’s focused on digitally savvy people because you do need to have a [digital] wallet. The audience definitely skews younger, so 90% of the audience is Millennial or Gen Z, and 70% of the buyers are Millennial or Gen Z. 

MW: What are the lowest priced items you see? What are the highest? 

RITCHIE: Our releases start from $100 with Livingstone’s Macbeth Act One —The Complete Collection, with the most expensive release to date at $260,000 which was Hennessy 8, a dual drop of bottles 1 and 250 of 250. 

MW: How do you see BlockBar evolving over the next few years? 

RITCHIE: I think we’ll add wine as a category. Our intention and aim would be for it to be a 50-50 wine and spirits split, but obviously the market will determine the ratio itself. We see it as a direct-to-consumer site, and that’s super important. That’s what the producers want. They want the information, they want the data. We can give them data on what’s been redeemed, on the demographic of who’s bought it, on the geographies [of the purchasers]. There can be data around what other consumption the buyers are doing, the redemptions, and you can encourage different behaviors. Events or experiences can be added into the cycle. 

In terms of the different ways of selling, you can have fixed price models, which is a popular one and which we use. You can also have a shuffle, which is effectively a lottery without calling it a lottery. Then under variable pricing, you can have a standard auction, you can have a sealed bid, you can have a leaderboard, you can have lots of different technologies. And then as you expand that from selling bottles or cases to selling casks or barrels, you can go down the fractionalization route… One of the things that’s interesting for this younger generation is there’s some gamification that you can do. If you can gamify things in a fun and interesting way, not detracting from the quality of what you’re selling, then I think that also provides another interesting aspect to it.