Warren Porter sits down with Nick Martin of Wine Owners and a bottle of 2004 Latour for IronGate.Wine’s interview series, Behind Fine Wine. In this episode Warren and Nick discuss organizing one’s wine collecting and long term wine storage options, the secondary wine market along with selling your wine and buying options, how technology is assisting wine collectors today, and how Wine Owners leverages data from LiveEx, Wine-Searcher, Robert Parker, Jancis Robinson and other sources to help you organize and manage your wine collection.
Good afternoon it’s Warren Porter. I’m going to be your host for this afternoon. I am the president of Irongate wine. We sell private collections of Canadian sellers to the rest of the world and the podcast is called Behind Fine Wine and what we want to do in this podcast is interview people that are behind the world of fine wine while at the same time having a great bottle of wine. Today we’re going to be having the 2004 Latour with my friend Nick from Wine Owners from London UK so thank you for watching all the way over here not just to do this but certainly for the for the wine and we’re going to be having some great discussions this week and we hope to be doing some good business with Wine Owners. So now first off before we get started might as well be civilized about this and try a little bit of this yes. So, this is a 04 Latour which is obviously quite young I opened it up last night at about 10 p.m. it’s now 4:00 in the afternoon. This has been double decanted using the Riedel Eve which is one of my favorite decanters so this beautiful piece of glass is what we’ve double decanted this in and I think it’s showing very well
Well it’s gorgeous it’s got great minerality, there’s a real sort of stain to the fruit and that climate classic cassis infusion and iodine, absolutely.Beautiful wine, a really great wine but we’re not here to talk about wine we’re here to talk about wine owners and I had been introduced to Wine Owners I believe as I was literally out looking for the answer to a problem; which is always what you kind of want to have somebody here. So maybe where we could start for our viewer base is to get let’s start with a very high level of how you would explain Wine Owners almost to your mom to understand from a from a macro perspective what Wine Owners is and what they do.
Okay so Wine Owners is a platform for collectors and enthusiasts who are into wine and it’s a platform that provides a means to be able to organize and catalog wine collections. To find out more about wines that you either own or aspire to own and provides an easy direct route into the secondary market so it makes it easy for people to buy and sell between each other.
Okay perfect so when you and I were talking before one of the things that I one of the in one of the things that I thought about Wine Owners, that was particularly interesting and extremely unique, was that there’s cellar organization categorization, the secondary market as you say which is the trading selling buying and selling between people on the market, and the understanding of the value in the end the pulling of data in from outside sources so that you know you’re not serving a 2004 Latour to your mother-in-law because you don’t know exactly how much you paid for that 2004 Latour you can make that she gets the stuff that’s perfect for her.
And what it’s worth today.
And what it’s worth today exactly. so, when we were talking about Wine Owners a little bit before I said okay well then, this section looks a little bit like Cellar Tracker but then there’s so much more to than that so why don’t we dig deep a little bit into how an average customer. First not a corporation not a wine storage facility because we’ll talk about that too would subscribe to Wine Owners and what they would use it for and what they’re going to get the most out of it so let’s think about it from a just from a user perspective.
So, as you say it’s not just one thing we’re not just a point solution for people who want a set up management tool or somebody who wants to sell their wine. It’s a platform that’s designed to make it as easy as possible for time pour wine collectors to essentially live their life in wine through an online platform so if you look at if you look at the collection management side of what we do. Yes, there are lots of people who do lots of things around organizing our wine collection like Cellar Tracker who do it absolutely brilliantly there are lots of sources of data to help you understand.
Robert Parker, Jancis Robinson, pricing data, maturity data.
Tasting data, drinking window data, schools of course and pricing data yes. So, there’s lots of that around and one of the frustrating things I think that collectors often experience is that it’s incredibly time consuming to pull that whole picture of a particular wine that you either owner and considering what to do with drink it now or keep it and lay it down for longer or a wine that you’re interested in buying. It’s incredibly time-consuming bounce around half a dozen websites to kind of figure out the whole story so one of the goals was to make it easy to do that to take away that that effort in kind of doing online research and creating something that was a platform through which you could get organized figure out what you own or figure out the wines that you’re interested in owning, learn all about them through what the critics and reviewers have to say. It understands what the relationship is between the cost of the wine and what its market value is today understanding where that may be going from a kind of performance over time defective and all of that and that’s of course you know the that the precondition of figuring out what to do with it is his price discovery.
Because the market is going to be certainly on a significant recovery from it what it did a few years ago so people are really looking at I’ve heard more often in the last couple of months, I really like the idea of drinking this wine but I mean the prices I cannot justify that so, it’s great to have that at your fingertips to be able to see that.
It is and to figure out you know which wines you may want to sell low on and all you have to either fund more wine purchases. Well whatever else you want to do with it and which wines actually you really do want to drink and feel that you can justify drinking and this is a great wine important I say you know 2004 is, I think, a hugely underestimated vintage the wines are as you say still incredibly young and there’s enormous depth to them and yet you know you could you can pick up a Latour for you know half the price or in the case of Latour perhaps even a third to a quarter of the price of something like Latour 2010. So why wouldn’t you enjoy this wine or a case or two of this wine over the next 30 years
Well it’s funny you say that because I get so many collectors who say what do you think about I’m looking at buying a bunch of 09 and 10 Bordeaux and I went “not for nothing but you’re sixty-five years old so why don’t we pick up 82, 86 and 95 so you can drink and still have a lot of life left in them because of 2010 I’m going to be a very long time”. I’ll wind it back a little bit because let’s talk about the practicality of I have a is a potential customer client has a very large cellar it’s disorganized I don’t know what I have I don’t know where anything goes so I take a look at Wine Owners from a level and hear what you say and go okay so, this will help me manage my collection. Help me understand what to drink wine it’s values all the things that you mentioned what do I do because I’ve got a whole bunch of wine that is disorganized and usually the hardest the most the heaviest lifting is out of the gate to get it in all. So how would one do that or hire some because I know we do that for clients all the time but what is it like for Wine Owners.
So, it looks like sending spreadsheets over to us for large collections typically it’s multiple spreadsheets because wines are often stored in different places. It depends what your interest is of course we have one or two members on the platform with enormous collections and we saw that they were busy using our online wizards to add those wines in and it’s quick to do that but we call them up and said look what why don’t we help you send your lists over to us and we’ll do an upload for you and we do that you know within a couple of days.
And one of them said no Nick this is part of the process okay this is part of me reacting myself to the last 20 years of wine purchasing because I really don’t have a clue of how much I bought in totality and this is my this is my stock take process, So it just depends it’s fair to say the majority of our users of our collector members if you like use us to get started to upload their wines and that’s either on a download out of something else that they’re using or it’s requesting spreadsheets okay from their storage of services.
Okay so now I’ve got all of my collection it’s uploaded in and I’m there’s all the typical ways that you are you know sorting and mixing and matching and playing around with them and that’s terrific and it is pulling date, it’s pulling pricing data in from where Nick?
So, the principle source is wide searcher okay so retail pricing its retail pricing its we’re processing around about 120 million price points a year.
Wow okay average Wine-Searcher pricing?
No so what we’re aiming to do is try and provide a guideline of the price at which if you wanted to sell your wine tomorrow pre-commissions you’d be able to you be able to achieve.
It’s kind of this so it’s not you know I mean there’s never going to be an exact you’ve got auction numbers in Asia auction numbers in North America retail price and consignment pricing so a lot of bottles of wine it can be….
I mean it’s working on the it’s working on the simple principle that if there’s a cluster of market prices from reputable sources at all around the market low then it is around that market low that the market are his games who is going to sell first.
So, when you’re looking at so using that example when you’re looking at wine search or you’re looking around the market low because I know when we price ours for the wines that we take from Canadian wine collectors and put them on wine-searcher one of my standard principles is need to be one of the bottom two or three least expensive in all of the United States anyway for us such that those wines turn. So, what’s a guy selling it for in Beverly Hills in a store it’s quite irrelevant which impacts the average price so you’re taking it more down towards the bottom.
We are we’re trying to identify point of market liquidity which is realistic that you might want to sell your wine there’s no point pretending that the markets something other than it is the market is the market and very small differences in pricing can have a profound effect on the speed or slowness with which or your market sells or doesn’t. We’re really very focused on of course it varies so if you’re looking at selling relatively more recent vintages of Bordeaux wine classified growths then there’s much more data in the market and we’re much more predisposed towards being able to find a very accurate price point for that eyesore around that market low cluster. If on the other hand you’re talking about an older vintage of say a Grand Cru Burgundy wine where there’s an awful lot less data available in the market then the pricing will tend to move away from the market Latour much more towards the market mid so reflecting supply reflecting scarcity reflecting relative demands as well of course
Now the other thing that brings up another point because judging from your accent you’re not from here.
I’m not from here.
So therefore, pricing information as you know is fluid but it’s also it is tax importation tax wine held in bond which is specific to the UK your wine that comes in with no tax applied such as Hong Kong and wine which is heavily taxed to pay for our magnificent healthcare system tends in Canada. So, when you when you look at that pricing data does one say just show me the pricing data germane to North America or the United States or Canada correct or how does that work because they can as you know be wildly different.
So, our pricing regions are A) Europe and B) North America okay and we’ve been collecting North American data for as long as we’ve been collecting.
So, I turn that switch and say show me North American doing it.
In fact, when you write up an account you determine what currency and what pricing base how you wish to set as your base currency and pricing dataset and because you’re curious. You can then pivot between different data sets and different currencies if you’re interested in doing that as.
Well we do that a fair bit here because a lot of the wine that we will sell will be into Asia so it’s important to understand what the market is looking like in Asia so that we are not under selling you’re overselling on behalf of us of our clients then the that’s on the pricing.
And the purchasing size of the Asian market we find is quite dependent upon European pricing data whereas the amount of the amount of available pricing data out of Asia isn’t nearly as great and there it’s far more difficult to be able to judge pricing levels based on based on those geographies.
And then when I look at maturity windows I often will look at the people that I follow whether it is a Parker or a spectator or a Robinson or whatever and so am I pulling in the feeds from the places that I subscribe to or are you pushing on to me a particular feed to say this is supposed to be from this time to this time.
So, in terms of drinking windows yes why particularly you you’re presented with drinking windows that everybody’s drinking.
Okay so it’s the wisdom of the masses as they say.
It’s the wisdom of the masses. So, if on the other hand you’re interested in seeing your Parker reviews or Venice media so the low near Parker or Jancis Robinson then as subscribers to those services you will be able to then see the same content on the Wine Owners platform. The other subscribers have Ennis media or Robert Parker audiences and then you’ll obviously be able to see their individual drinking windows as well okay of course, there are many wines we’re drinking windows don’t exist from a critic source. On a like basis we create those drinking windows so we have we have we have some maths that essentially applies drinking windows to wines which haven’t been given a drinking window by a wine reviewer based on the similarity of that wine with a cohort of wines with similar that do have those drinking.
Okay that’s interesting the one thing that that also brings up another point the one thing that I’ve always found inside of Cellar Tracker as an example is an inventory control system is the community data and I can see your data and you can see my data and it was one of the reasons that the Parker data and the Robinson data had to be kept private because otherwise you’re taking their proprietary content and you’re putting it out for the world. So is there is there the community aspect or in inside of the Wine Owners platform management platform or is it more about you and the things you subscribe to.
So today it’s about you and the things that you subscribe to and going forward that that’s that community element is going to grow okay for now if your view of Latour 2004 is that the drinking window that was.
We’ve got another half of risers that’s.
Exactly was too great too young too likely too conservative then you can put your own drinking windows in and those drinking windows then I override the system drinking windows so you can personalize drinking windows to your own palate.
Gotcha now. One of the things that I thought was very different and really piqued my interest about Wine Owners is the concept of trading within the community that you’ve built and being able to put it out now iron gate takes collections from Canada and sells them in the United States for a regulatory reason in the UK. Of course you are more free to trade within and outside a bond and in the United States it’s an it’s in between where you have the ability of consigning to a retailer selling to an auction house so explain to me how the platform works with respect to somebody saying ‘look on seventy-five years old they’ve got ten thousand bottles of wine I Should at least put some of these up to possibly make a sale so what would that look like and where is that feasible to do today’. Is it mostly UK-based?
So, to do it’s feasible to do in in many geographies it’s not feasible to do in North America as a North America consumer that’s something that we’re working on and could well be elaborating on need so that we work within the regulatory frameworks that exists that prohibit private individuals to sell to other private interview card for direct. But that doesn’t mean that a two-sided market can’t exist and counterparties be in background in order to facilitate the exchange or the sale of wine through the exchange. Okay if you look at if you look at the European market any European market is easy to sell wine direct as is in Asia but there is typical reality is that most Asian purse purchases are made outside of Asia. You know there’s very little wine trading that goes on within Hong Kong for example. So, if you’re a British consumer or a French consumer you can you can offer your wine directly for sale on the platform you go into you into your cellar into your online collection and go straight into a process that makes it easy for you to offer your wine the sale way. You can see in context the price for wine price history the relative value of that wine against other wines other wines of the same vintage or other vintages of the same wine other words it gives you plenty of scope to be able to do your own research before deciding what you want to sell what you want to keep and then at what price you.
But you’re facilitating that I mean this is not like trading a currency it’s not like I mean this is trading a physical good so that that needs to be facilitated. So, I assume that one of the main things that you’re doing is saying look this wine that is now offered up for sale exists it’s real so we’ve authenticated it we know the seller and we know that it will be made available when the purchaser wants to purchase it so it so should I assume that that’s a significant part of your process.
So, our role is that our role as platform is to facilitate and to provide the logistic support and the oversight and to ensure that the counterparties the buyer and the seller are participating in an assured environment. And to that end we make that when wine is off for sale and traded that the seller is protected in the buyer is protected equally and there’s and that’s done through a sequence of steps that make that the wine is moved to us that it’s inspected upon request of the buyer that the buyer’s money is already held in essentially an escrow account on their behalf and as they can move to the cellar once the wine the trust for the dirty party so we’re the trusted third party
Terrific the other thing that I wanted to ask you about is one of the things that we’re discussing for the improvement of the customer experience for our own collectors yes is the possible integration of the Wine Owners platform on a commercial level such that when they store or sell wine with us or have it in a combination of an our seller and in their home that they’re seeing that data so is your platform your data and your services it just is accessible on a commercial level to another storage facility such as ours yes and or retailers
So today about 60% of our revenues come from just that model.
I didn’t know that okay.
So, we provide a technology platform the you configure that’s configurable to your business requirements and to the needs of your customers.
Okay that’s your brand that’s your platform.
And we provide an immersive interface for your clients to see and explore the wines that they have stored with you as well as you say the wines that they have stored at home in that country how.
I see it as a holistic 360; my cottage, my home, my storage facility.
I mean it’s a 360-degree view because wine is very rarely stores in all the same place and that enables them to do that at the same time. There’s a huge back office if you like that provides a complete infrastructure for a wine business from pre-advising of wine that’s due for arrival to the landing of wine to the allocation of wine to space in the warehouse to the movement of wine within the warehouse to reconciliation and stocktaking. And to obviously the wine being called off or requested for delivery. And we cover all of that along with APIs for pushing wine that is then requested to be sold through into an e-commerce platform or the like such as such as Iron Gate Wine has in Buffalo or into anything else that the wine data needs to be pushed into so we provide a complete environment.
Well I’ll tell you this it would have been very nice for us to have had something like that when we started 14 years ago because there was absolutely nothing on the market so we had to build it from scratch and so we’ve kind of built up what we’ve had. So, I’m excited to see the possibilities of things we might be able to do as I said for our customers with Wine Owners. II don’t want to keep you much longer because we’re going to go and enjoy some more this wine but before I go I always like to find out I meet very few people who start in wine they come from a completely different background typically and there’s a catalyst that says ‘I’m going to go into something else’. So, you’ve been with wine owners for I think you said five years so your founder of the company you started.
We started the company we founded it in 2011 we spent most of 2011 figuring out what we were going to do how are we going to do it and then we started coding the platform so he started spending money in January 2012.
And what would possess you to start off a wine management or how you leaked apps of a wine inventory management and a platform from what you were doing before.
Especially if you go to being never been in the wine trade.
And so, my background had been a in information management and customer relationship management and b in tech.
But you had an interest in wine so with the pairing of something that you really liked was something that you knew.
So, I know like so many people who might consider themselves wine collectors or wine enthusiasts I probably be on a very similar journey of them is which is having a having a special moment where I realized that spending a little bit more money on the bottle of wine got me a lot more enjoyment. And as I started to have more discretionary income to spend to I started to build my wine collection out so all the challenges that people who may be listening to this so this video may have experienced themselves in terms of being on top of their collection and knowing where they are with their wines given that their start point was one of passion rather than perhaps investment. I went through that same journey and became increasingly frustrated at the lack of platforms that were out there that would provide a complete solution to my issues there were lots of as we said earlier there were lots of things that did one thing or another but nothing that enabled me to organize my entire life and wine in one place and that’s what I needed.
And the one of the most important things on that is I found that most of my collectors are not interested in the technology per se. They want the ease of use I don’t want a remote control with 250 buttons on it I want something that makes it easy using technology not technology for the sake of Technology and I think that was the one thing that I was struck by when I was going through your platform and looking that I could see it through the eyes of my clients and see that it was informative yet relatively simple so I don’t have to be a you know a software engineer to understand how this works.
And that was a standing point we I’m not I’m not I’m not technical I am a wine collector I understand technology and we were able to put ourselves in the shoes of our target market and that’s been the focus ever since.
Perfect well listen I very much appreciate our time here today. So, cheers to that again thank you for coming to Toronto and so I’m going to wrap up our time here with Nick Martin from Wine Owners and that we look forward to seeing some business that we might be able to do together. And I look forward to presenting another industry insider behind the world of fine wine in our next show so with that I say cheers thank you very much.
And again, thank you.