Having experienced the difference in taste from wines sourced ex-chateau versus the secondary market, Denis Houles, CEO of 1275 Collections, is on a mission to create a new wine asset class of pristine conditions wines. Denis and Erik Portanger, Head of Strategy at 1275 Collections, tell us about the industry-wide issues around provenance, particularly with transportation and storage, and how 1275 leverages technology and direct chateaux relationships to build a solution to keep the wines as if they never left the chateaux. Detailed Show Notes: Denis’ backgroundHe grew up in the south of France, fell in love with wine in BordeauxMIT engineering grad lived in Rome, got a Stanford MBA, and worked at McKinsey & Company in LondonBelieves in working in what you’re passionate about and founded Claret Club in 2003 - a private members club centered around wine, having chefs crafts food around the wine instead of vice versaErik’s backgroundA financial journalist for the Wall Street Journal in London was about to also write about personal passions, which was wineHe went to 1st Claret Club even in 2003 with Chateau Palmer and had his 1st wine epiphany1275 Collections OverviewFully documented, fully transparent way of collecting pristine wine from chateauxBased in the freeport of Geneva - wines held in bond, no sales taxes until removedPurchase directly from chateaux or negociant, sometimes get back vintages“Internet of Bottles” - NFC chips with credit card grade security, for provenance and monitoring of temperature and humidity, pairs with a mobile appData per bottle and case, only tracked while in 1275’s controlProvenance: issues with storage and transportationProvenance is more than just not being fake, but also how many hands the wine has passed through and storage conditionsFine wine often moved between warehouses in trucks - often unrefrigeratedLVMH launched its own traceability platform called AuraOctavian Vaults in the UK - requests for photos of bottles has increased ~30% each year for the last few years, highlighting the growing consumer awareness of strong provenanceProvenance premiumSome are high, e.g., DRC from Drouhin cellar sold for ~$500k/bottleHistorically, the premium is meager - ~2-3% because most wines are bought and sold by tradersPremium increasing over time - auctions and library wines sold from chateaux selling for higher premiumsTraceability solutionsPure trackingComprehensive - tracking and monitoring (temperature, humidity)eProvenance is a B2B solution for wineries and importers1275 Collections believes a fully traceable stock of wines will come1275 believes wine damage from storage/handling is a more significant issue than counterfeit winesWine StorageThere is minimal research on the impacts of storageThe more researched area is the impact of transportation  - road transportation is worse than cargo shipsLack of transparency and accountability in the industryKey things to track - temperature, temperature fluctuations (change pressure in the bottle), humidity, circulation of air (to prevent mold), lack of contaminants (free of bad smells) - mostly TCA1275 Business ModelEnd-to-end solution for people who want a great wine collection, direct from estates with technology to have full traceabilityCollections start at €25,0002% annual management fee (includes sourcing, transportation, insurance, and storage)For €100,000+ - a one-off advisory fee of €4,000 and lower management fees (1.4-1.8%)~€15M+ under management currently (October 2021) Get access to library episodes Our GDPR privacy policy was updated on August 8, 2022. Visit acast.com/privacy for more information.