The US company bringing fine wine investment ‘kicking into the 21st century’
Fine wine investment is often perceived to be out of the reach of the majority of people, however US fine wine company Vint claims to be democratising the process, shaking up the sector and “bringing it kicking and screaming into the 21st century”.
Speaking to db recently, co-founder and CEO Nick King argued that the $300 billion wine industry is plagued by opacity, inefficiencies, and exclusivity, with prerequisites that prohibit most investors from accessing the stable, proven returns of wines.
He argues that the way Vint does things – offering shares in SEC-qualified securities of wine and spirit collections for as little as $25, all without any annual fees – is a good way to address these problems. For example in November it launched its 11th collection, which featured a $137K curated collection of Domaine de la Romanée-Conti wines with a $25 buy-in investment option, an “exceedingly accessible investment entry point”, King points out.
King and his co-founder Patrick Sanders founded Vint in 2019 after experiencing the lack of options for wine investment on the market. It was, he says a case of “invest $25,000 and 3 week later you’d get a list of wine”.
“But that’s not how we invest in any other asset class and the minimums of $25,000 are, in our opinion, inaccessible for most people,” he explains. “The chances are, people aren’t putting 100% of their portfolio into wine or just one asset class. And when you’re investing in anything – whether stocks or wine – you want to be diversified across different regions and vintage as possible, and Vint allows for a very low barrier to entry to do this.”
Primarily it is registered securities that people are investing in and “once on the platform, they expect to make money,” King points out. An added benefit is that because it is SEC qualified, investors are able to add their Vint portfolio to their individual retirement accounts (IRAs).
“We are the only wine platform that can really allow you to invest in wine through you IRA,” King says – a big USP for the company.
Since launching, the company has already invested $1m in wine futures, whisky and casks, all of which is backed up and qualified on the SEC. The online platform launched in May 2021, and the company recently raised more than £1.7m of funding to grow its base and to launch a secondary marketplace platform.
As well as targeting wine lovers with expansive wine knowledge, the team are attracting a broad range of investors, from high net worth clients to millennial micro-investors. “One common theme of all those people is that they are financial literate, bordering on financial savvy as they’re interested in alternative asset,” King explains.
So how does it work?
The process starts with the wine investment committee identifying themes that might be interesting based on data, insight, analysis and news, before the wine team, headed by its head of wine, certified sommelier Billy Galanko, goes to its network of suppliers.
“We’ve sourced direct from producer, through merchants, through exchanges, so we have partners in the UK and US and we will go them saying this is the theme we want to list on the platform. Once the wines have been sourced, we file the paperwork with the SEC and list the collection on the platform. About 85% of the wines are stored in the UK with the remaining 15% split between Napa and Washington DC,” Galanko explains.
The collections can vary from blue chip names, different regions and vintages, spirit casks and bottlings to catalyst opportunities. “It’s very transparent, you can see the data, our thesis, you can see the underlying assets before you make an investment,” King adds.
After that, it takes “maybe two minutes” to go through the process to invest in anything from DRC to cult Napa wine.
“We’re trying to solve the problems and bring a more transparent and accessible way to be involved in this great asset class,” King says.
“Innovation is core to our mantra, our point of view is that the wine industry is archaic, it’s been slowly modernising, but it’s our duty to bring it kicking and screaming not the 21st century,” Galanko adds.
Data, insight and technology plays a big part of determining the collections. The team has started to work with Saturnalia, which uses satellites to look at wine regions and monitor rainfall, temperature, and diurnal shift over time.
“They can get to different plots, even single vineyards in Bordeaux and you can see how certain patches of vines have fared during the year,” Galanko says. “This data, when combined with Live-Ex, can be used to create vintage scores and other readings. So we’re going to be using data like that to inform our decisions on what vintages to buy, what to push forward with. We’re constantly looking at different data points to give us a unique perspective on the market that maybe others aren’t taking.”
He points to the inclusion of Figeac and Ponsot in recent collections as examples of ‘catalyst’ opportunities, identified by the data. “With Figeac, there is the potential that it will be promoted to Grand Cru class A, and we had a wine from the new project that Ponsot winemaker Lauren Ponsot is working on with his son Clement.”
One of the big advantages, King says, comes from “looking at the industry as a blank slate” rather than accepting that “it’s always been done this way, because it’s always been done this way”.
“It allows us to come up with creative solutions to these different problems. Whether that’s taking ideas from finance, marketing or general business practises, we can combine all of that into creating the best solution for problems out there,” he says.
The team are currently working on a secondary trading market to make it possible for people to trade their shares on the Vint platform, which is hoped to be operational by the end of the year.
“Sometimes if you’re just trading bottles, it’s too fragmented to really create liquidity, but with our model and the ATS structure, we think we will be able to have one of the most liquid markets for investment in wine,” King explains.
The idea is that investors hold their shares in the wines for 3-7 years, after which time they can be sold and the investors receive their pro rata distribution of the proceeds.
The team are also keen to create wine experiences as part of some of its collections – a recent Napa collection tied together a wine box that was exclusive to Vint investors enabling people to buy a box of “comparable wines” King explains.
Another aspect they say has proved popular is the focus on education – the team have a weekly podcast in which they explore topics from what’s going on with the wine world, to potential wines for dinner, to developments in the company itself, boosting its virality on the internet.
However, personal touch has been the most important aspect, Galanko says. “We’re trying to make ourselves available and as much accessibility as possible. So far we’ve gotten a great response from that.”