As the only fine wine end-to-end solution in the US, Vinfolio has recently launched its wine investment service, leveraging its deep expertise in the fine wine arena. Don St. Pierre, Executive Chairman, and Adam Lapierre MW, President, tell us about Vinfolio's history, how the marketplace, storage solution, and VinCellar work together, as well as get into their recent foray into wine investment. A must-listen for those intrigued with wine investment and for fine wine lovers in general. Detailed Show Notes: Don St. Pierre's background1996 - founded ASC Fine Wines w/ his father, a wine importer in China 2010 - sold ASC to Suntory, stayed with the company until 20142015 - got connected with Vinfolio and bought 33% of business with a friendAdam Lapierre's backgroundMainly on the supply side (worked at a winery in the Finger Lakes, at an importer)Became an MW in 2013 and moved to the buying side, working for Lidl, a major retailer of wineJoined Vinfolio in 2018, became President in 2020Vinfolio's historyStarted by Steve Backman, a software entrepreneur, and wine collector, in 2004 - he wanted to create a cellar management tool and marketplace to store and sell wineBuilt VinCellar - cellar management tool, started at a similar time to Cellar Tracker (Eric Levine), the difference is Steve wanted a more end-to-end solution for collectors vs. a more utility tool for Cellar TrackerBuilt VinFolio - marketplace and warehouse storage business2009 - Vinfolio went bankrupt in Global Financial Crisis, clients came in and took over the business Vinfolio is an end-to-end solution for wine collectors - buying, storing, and selling wine, focusing on the niche of fine wine coupled with technologySimilar business model to some UK businesses (e.g., Berry Bros & Rudd, Farr Vintners)Most people hear about Vinfolio through retail/e-commerce today, but that may shift as VinCellar is re-built and re-launchedVinfolio MarketplaceA fixed price auction modelUses proprietary tools that determine recommended market price for collectors to sell atStorage clients use VinCellar to put wines for sale, or others can use the full-service option w/ the cellar acquisition team (every bottle on the marketplace has been inspected with it being rare for wines to be sent back)Wine sourcingCollector Marketplace (⅓ of wine sales) - from individual collectorsProducer Marketplace (⅔ of wine sales) - from a global network of merchants (e.g., negociants), direct from producers, and US importers/distributors (~15-20% of sourcing)Try to clearly differentiate between the sourcing typesAdvantages of the Vinfolio marketplaceFor Buyers - the breadth of wine at their fingertips, more clarity around the asking price vs. other auctionsFor Sellers - realized prices often higher than live auctions (except for very rare wines)Wine StorageA vital part of the business is to create ready supply for the marketplaceIt makes VinCellar an essential part of the businessConvenience for clients to get deliveryA premium servicePricing ~$5/case/monthInventory is cataloged and received at the bottle levelClients can take delivery or sell wines at the bottle levelWine Investment ServiceIt started because Vinfolio got unsolicited inquiries around wine as an asset class for investmentRetail marketplace helps Vinfolio understand where market demand isInvestment customers are mainly new customers vs. traditional clients that are more passionate wine collectorsVinfolio investment processMin investment size = $25,000 - in order to have a diversified portfolioPurchase in original wood cases (OWC) mostlyUnderstand client's interestsFocus mainly on blue-chip / investment grade wines, the foundation of every portfolio is Bordeaux"Stock picking" - look at buying opportunities and allocate portfolio across current and mature vintagesPut wines in storage - mainly in the UK under bond (as it's easier to sell)Key benefits of Vinfolio wine investmentBuying side - acquire below market (charge landed cost (which includes