CruTrade CEO: ‘Every time a bottle moves, it dies a little bit’
In an exclusive interview with db, CruTrade CEO Devon Ferreira reveals why the fine wine trading platform, launched on Tuesday, brings producers “back into the value loop”.
Sleep is low on the priority list for Devon Ferreira this week, having publicly launched new fine wine platform CruTrade yesterday (Tuesday 7 October).
CruTrade allows collectors to trade wine without moving the bottle. The platform has partnered with Crurated, a digital members’ club offering access to fine wines sourced directly from producers. CruTrade gives its customers access to the club’s inventory.
“We are the only marketplace where Crurated collectors can get liquidity and buy and sell in ones and twos,” CruTrade CEO Devon Ferreira tells db on launch day. “Similarly, they’re the only repository of collector-owned wines that we’re servicing today.”
Ferreira explains that while Crurated’s mission is “about solving access and direct connections between producers and collectors”, the vision for CruTrade is to “pick up where they leave off”.
He describes CruTrade as “the only real fine wine marketplace that really considers the producer”, adding: “We like to say we built it for the collector, but with the producer in mind”.
CruTrade has been developed in part to help producers trace their wines post-release.
“Producers really get the short end of the stick, especially when it comes to the resale market,” Ferreira says.
“They watch their wine roll off their driveway and they never see it again – they don’t know where it’s going. They could follow along as an observer of the market and try to get some indication of whether it’s being consumed, but the reality is that a lot of these wines just end up gathering dust in warehouses. People take whatever allocations they can get and then there’s no real way to keep in touch with their wine. They lose connection with the people that they made it for.”
CruTrade aims to solve this problem. “We wanted to make sure that we really were mindful of the producer. At the end of the day, they are the reason that we get to enjoy these delicious things, and we want to make sure that their concerns are also addressed.”
The trading platform has been launched to tackle challenges in the fine wine market – namely fees, spoilage and a lack of access.
“The producer gets the blame” when wines are damaged or spoiled – “the drinker never really looks at the merchant and says, oh that was poorly handled,” Ferreira says. “We don’t think that’s cool.”
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CruTrade has been designed to ensure that wines are protected until the point of consumption. Bottles are held in temperature and humidity-controlled storage while digital ownership transfers on-chain, verified by RFID (radio-frequency identification) and recorded securely on the blockchain with an immutable record of provenance and custody.
Ferreira explains: “We allow the owners of those bottles to list them on our marketplace in the form of an NFT (non-fungible token), and that NFT can trade between collectors as many times as they like without actually moving the bottle.”
Sparing bottles from spoilage is something the CruTrade CEO feels strongly about. “Every time the bottle moves, it dies a little bit,” he says.
Keeping bottles in one place prior to being shipped for consumption also gives producers more visibility.
Beyond access to information, CruTrade also plans to bring producers “back into the value loop”.
“Today, a producer might sell a bottle for €100, and that bottle could go on to fetch four figures in the secondary market. Not only do the producers take the blame, lose the visibility, but they don’t get to participate in any of that value creation,” he says.
CruTrade plans to charge a 5% fee on the buyer’s side and 2% on the seller’s side, although both are currently paying 0% on the platform for launch. The platform is committed to returning 25% of its fee revenue back to the producer “in some way”, Ferreira says, “so that they can start to also enjoy the fruits of their labour post-first release”.
“Of course, it means giving up some top line revenue,” Ferreira adds, “but there are other ways that we’re creating value in the market.”
CruTrade is powered by blockchain platform Avalanche.
The platform plans to expand collector-to-collector transfers across bonded warehouses worldwide and power a hospitality service that lets restaurants offer rare bottles via venue-branded digital menus.
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