Source:
https://scmp.com/magazines/style/luxury/article/3192066/how-are-nfts-driving-prices-rare-whiskies-gordon-macphail
Style/ Luxury

How are NFTs driving up prices for rare whiskies? Gordon & MacPhail, Glenfiddich and The Macallan are all experimenting with tokens and digital art to add value to their bottles and casks

  • Digital art was changed forever when Christie’s sold Beeple’s The First 5000 Days in May 2021 for a staggering US$69 million – now whisky brands are joining the party
  • Gordon & MacPhail’s 72-year-old Glen Grant made US$119,000 at auction at Bonhams Hong Kong together with an NFT artwork by political cartoonist Harry Harrison
Bonham’s first whisky NFT artwork is part of a trend among distillers to sell NFT assets along with physical bottles and casks. Photo: Premier Whisky

Even those with no knowledge of blockchain technology and cryptocurrency have heard the news – NFTs are here to stay. The advent of fully traceable non-fungible tokens has fuelled a dramatic growth in digital art that has changed the creative landscape forevermore. We all heard how Beeple became a multimillionaire overnight, when his The First 5000 Days was sold by Christie’s in May 2021 for a staggering US$69 million, in the first purely digital NFT artwork offered by a major auction house.

That unprecedented sale kick-started a revolution, with artists, houses and digital platforms racing each other for a piece of the blossoming NFT art space – a fast-fattening pie that has grown into a US$10 billion marketplace.

Naturally, other industries were quick to take note – but some manoeuvres make more sense than others. Drinks might seem an odd place to start – after all, many would say they need to be drunk to be enjoyed. But for collectors of rare whisky and other spirits, the NFT sector seems to be one category with huge potential, with the possibility of now owning both a digital and a physical asset, both of which can appreciate value.

Bonhams auctioned a bottle of Gordon & MacPhail’s Glen Grant 72-year-old whisky – complete with Harrison’s artwork – for US$119,000 (HK$937,500). Photo: Gordon & MacPhail
Bonhams auctioned a bottle of Gordon & MacPhail’s Glen Grant 72-year-old whisky – complete with Harrison’s artwork – for US$119,000 (HK$937,500). Photo: Gordon & MacPhail

Recent sales point in a profitable direction. A bottle of Gordon & MacPhail’s 72-year-old Glen Grant broke records earlier this year, fetching US$119,000 (HK$937,500) at auction at Bonhams Hong Kong. The twist? The purchase included an NFT artwork by political cartoonist Harry Harrison celebrating the year 1948 – the whisky’s cask date, or “The Year of the Dram”, as Harrison captioned it.

“Since its inception, The Gordon & MacPhail’s Glen Grant 72-year-old has consistently surpassed our expectations,” said Nicholas Breton, founder of Meta Malts and CEO of Premier Whisky. “The addition of a one-off NFT artwork commemorating 1948, the year the whisky was ‘born’, undoubtedly contributed to the high price reached at auction, as it made an already highly rare and collectible whisky even more collectible.”

BlockBar is another recent entrant to the alcohol NFT space. Created by the Falic Group, the company behind a network of duty-free stores in US airports, BlockBar brings the world’s biggest spirits and wine brands to the NFT market. BlockBar’s first partnership was with the world-renowned Glenfiddich Distillery, and their limited release of 15 bottles sold out in just four seconds.

NFTs exclusive to BlockBar feature an extended limited-edition design for Glenfiddich 21 Year Old Gran Reserva. Photo: BlockBar
NFTs exclusive to BlockBar feature an extended limited-edition design for Glenfiddich 21 Year Old Gran Reserva. Photo: BlockBar

The buyer of the digital NFT also owns the real physical asset, which is stored in BlockBar’s high-end storage facilities. The buyer is free to trade the NFT until the time they choose to redeem it and receive the real physical bottle.

“The success of our first launch with Glenfiddich demonstrates that BlockBar is what consumers are looking for today, bridging the physical and digital worlds of luxury,” said Blockbar CEO Dov Falic.

The company has created a fun and straightforward way to tie spirits to the NFT space, and is rapidly launching new projects.

The aim, said Breton, is “to use the NFT model to fractionalise the asset, thus allowing for multiple investors to benefit from the purchase”.

Trevor Jones’ “The Angel’s Share” NFT was sold alongside a sherry cask from The Macallan for US$2.3 million. Photo: Metacask
Trevor Jones’ “The Angel’s Share” NFT was sold alongside a sherry cask from The Macallan for US$2.3 million. Photo: Metacask

While BlockBar attempts to make drinks in NFTs mainstream, Metacask looks towards the investment side of whisky, with full casks. The concept appears simple – buyers receive a piece of art as well as the physical asset: a whisky cask that is maturing and thus growing in value.

Whisky cask investment has grown over the last decade and become one of the most stable alternative assets. Now, Metacask aims to become the go-to platform for cask NFTs and, according to co-founder Nimantha Siriwardana, “make available a class of physical assets which can be redeemed to something that consumers already love and understand”.

For collectors of rare whisky and other spirits, the NFT sector seems to be one category with huge potential

Working with NFT artist Trevor Jones, Metacask sold its first cask for US$2.3 million. Alongside a 1991 sherry cask from The Macallan, the buyer receives the one-of-a-kind artwork by Jones that holds significant value in itself.

BlockBar and Metacask are banking on the future of the NFT market, and hoping alcohol NFTs become big enough to be traded widely and collected. However, not every story in the NFT space ends in success.

NFT Spirits was the first company to create new products specifically for the NFT market. As with BlockBar, digital images of the bottles were tied to real physical bottles and launched on the NFT platform, Rarible. The company launched a rum, a bourbon, a gin and a vodka. The rum release sold for over U$S1,000, when a similar rum release purely in the real world wouldn’t sell for more than US$100.

NFTs exclusive to BlockBar feature an extended limited-edition design for Glenfiddich 21 Year Old Gran Reserva. Photo: Blockbar
NFTs exclusive to BlockBar feature an extended limited-edition design for Glenfiddich 21 Year Old Gran Reserva. Photo: Blockbar

However, NFT Spirits experienced issues with delivery and importation, and with NFTs – just as in so many other industries – execution is key.

The CryptoWhisky project is an example of an altogether different outcome. The project launched several months ago with a collection of pixelated images depicting famous whisky bottles. No physical assets attached, no entry into a unique community, just the pixelated illustrations. Yet, the entire collection sold for prices ranging from US$100 to US$300 for each image. This shocked the industry, with the artworks fetching higher prices than some physical bottles.

The lesson here: numerous projects will pop up and gain some traction but ultimately, only projects with strong backing and a well-planned road map will survive and thrive.

The NFT market is a new and volatile space, and spirits sold within it are newer still. Some projects have started dynamically enough but then quietly disappeared, while others betting on future growth once NFTs become more mainstream appear to be doing better.

The real question is, will alcohol NFTs be able to create a trading ecosystem or are these launches just one-off projects? Many rare spirits brands and collectors tend to be more traditional and focus on the physical presence of their products. Whether this can translate to digital assets, so we see collectors focusing on digital releases as well as, or even instead of, physical bottles, remains to be seen.

Want more stories like this? Follow STYLE on Facebook, Instagram, YouTube and Twitter.