Flat Is The New Up | Episode 16

30:30Do we feel like those big high production wines are going to really struggle moving forward? what are people looking not just at like top level, but they looking for like niche, lower production stuff now as, as almost as much as for quality, but also for protection and price.

30:47Jonathan Stevenson:Without sitting on a fence, not answer the question. I think it's, I think it's difficult because it really depends on the wine. Cause you, you look at a brand like Opus One or TNL, and obviously we just talked about Super Tuscans. Part of their success has been the volume. Like part of TNL's success is that they make 30, 40 ,000 cases a year. Right. So they've got that distribution. You go to any duty-free airport in the world, there'll be T &O available. You go to an airline and business class will be available. Everything we just mentioned. Same with Opus One. It has high volume, which really supports the brand distribution.

31:20Jonathan Stevenson:So I think if you're a brand that has really well-established international recognition, the volume is really important. I think that will always be a positive for those brands. I think if you flip it on the other end, to your point, like the wines that have that high volume but haven't got maybe that same level of brand reputation of course it's going to be a problem because you're going to end up with oversupply and with oversupply either the winery's got to release less to artificially control supply onto the market or if they've already released it and it's in the secondary market we've seen this with some wines right where in the last couple of years where there's more sellers in the market than there are buyers a lot of collectors investors are overstocked who are looking to now liquidate or sell through their collections it's the wines that have the big volumes that are struggling the most because everyone's got Ponte Canet in their collection, right?

32:05Jonathan Stevenson:So when every collector and every investor goes to sell their wine, you can pretty much guarantee that there's going to be one or two, three, four cases of Ponte Canet coming onto the market and that puts downwards pressure on the supply side. So without avoiding the question, I think it really depends on the type of wine. But to your other point around what the wine buyers go after, I think the current market we're in is being dominated by the drinkers, the collectors, the people that have got deep pockets. and we know generally the people that are at that top end of the pyramid, they're not excited about, sounds harsh, I'm not saying Ponte Cane is a bad wine or Tiano is not a bad wine, but a big collector who we all know the types of people we're talking about, they don't get excited to open a bottle of Ponte Cane or Tiano, right?

32:49Jonathan Stevenson:And at the moment, I'd say in a downturn on the market, those have been the ever-present buyers in the market. They have been the kind of bellwethers of the market. And these guys are more excited to buy the rarer wines, the more artisanal wines the up-and-coming wines that no one's heard of the wines you can't get hold of you know the wines like a medio pepe that you might bring to the table none of your friends have heard of so you if you think about the market structure if they're kind of the dominant presence right now then i think it lends itself to what you said around the wines that are the most in demand right now are the more rarer more collectible more cult shall we say wines and labels because that's the kind of persona of buyer that we have in the market right now I'll tell you something interesting though, and this is at a slightly lower level in terms of pricing, but I think for me it's been the most interesting question that I've posed to myself this week.

33:39And I noticed this with, I mean, effectively this has been sold as a retail wine, but the Clenenden family estate in California produce a fantastic Pinot and a fantastic Chardonnay. And they recently, it was quite unique, they turned up here, Their back vintage is 13 and 18. And they were priced around. Well, Ibonkama or under the Clennenden family estate. And I mean, they are fabulous wines. And they're retailing about£62 a bottle. That stock has all gone and it's been replaced by the 22s at£75 a bottle. And that's a 20 % markup in the matter of three months. And the question is, you know, obviously there's demand.

34:25So although this is at a lower level, I think it's quite interesting how the retail market can absorb a 20 % markup and all the stock's gone. If it's marketed well, yeah. And obviously the wine's very good as well, yeah. No, I think you're right. I do think there's definitely, as I was mentioning with the US stuff, I do think there's going to be more to come in terms of, because I think it's important to make sure that is noted, given what we're talking about in half one of this year, which is amongst all of what's been going on in the wider, you know, the macro picture, which has been pretty, you know, turmoil is, you know, I think this makes this even more encouraging.

35:02I think if you consider that from an import perspective, the US have been massively off the table given the current hiatus with tariffs. Although I do think that might be why Italian wines are starting to move forward, because I was reading that it started to close now that the tariff prices have been almost like baked in in terms of the interchange of wines at auction in the US. Auction prices have started to rise. People are now actually needing that new supply. And I think obviously Italian wines are massive in the US. But I do think that's just worth noting that I think that the impact of that shouldn't be overlooked in terms of in the background to everything else.

35:40I think there has been a big player in the US that have been largely not importing wines and almost just kind of busy in the market with what they have already in play over there. So I think there's definitely potential for that to have a bigger impact going forward into the back end of the year.

35:55Jonathan Stevenson:Yeah. Well, look, I mean, for everyone listening at home, the report is available for free to access on the website. Wineinvesting.com will put a link in the podcast description on whichever platform you're watching or listening to us. So I'd recommend diving into the data. And as Joe likes to say, really trudge through some of the findings in there. I'm enjoying the trudge. Yeah. It's a bit more of a lighthearted trudge. Yeah. We're more like skimming the surface. I can get the laptops out if you guys prefer again. I feel a bit naked about my laptop. Tom. And the glasses. Yeah, yeah.

36:31Okay, right. Now we are going to play somewhat of a game, as we always do, but this one is going to be hopefully a little bit more nitty gritty. so the read for H2 is that the recovery stays narrow before it broadens maturity scarcity top grades and rotating regions first the broad middle later a stock pickers market so quick fire one call each I'm going to read out a few prompts and you guys are going to give me your fingers on your buzzers fingers on your buzzers fingers on your trudgers so Joe you first in the in the so-called hot seat so one region you'd be backing leading into H2 Burgundy interesting and why so I think that the first half of the year we've already seen signs that the demand is coming back for the top end of the market bid offers above one the case above five thousand pounds are driving that the forever squeeze middle when it comes to Burgundy has been a bit slower but those buyers buy at that level as well so I think that it's just a supply thing and I think that region is going to break out in the second half of this year.

37:50Yeah and obviously some new releases in November, December as well.

37:53Jonathan Stevenson:Tom? I'm going to go with Bordeaux. There you go. Back in Bordeaux. Back in Bordeaux. Any particular part of it? Yeah I think it's the same thing we've said on a lot of these podcasts. It's a huge amount of Bordeaux that offers a massive amount of value and I think value seekers will identify that as a good opportunity it's still pretty liquid yeah I just think it's just we've seen the right signs it's just a moment in time look I think if the market does bounce and starts to recover and starts moving the right way we always know Bordeaux is going to be a key part of that just because of the liquidity and the value that it provides so Bordeaux for me Philip did you have something to add?

38:29yeah thanks so it's B is it and you've just taken the obvious two so I'm going Bulgaria so No, I think from an economic perspective and what is going on in the States, I think the US market is going to be very interesting because I think it will put pressure on high-quality production out of the obvious regions. And I think that within the US, I think we'll see price rise and pressure on supply. Yeah, I think we've seen that a little bit. And if I was to answer as well, although I'm the host, I was going to sort of say rest of the world in terms of the releases we see throughout September, October, Chile, Argentina, Spain, Rhone.

39:14So by doing that, we've covered every single region between us. But I do think there has been some interesting points out of the H1 report where, you know, some labels from Argentina, Chile that we followed that have started to actually, and whether that's impacted by the fact they're not being tariffed into the US, who knows. right next up does the recovery broaden out or stay narrow into year end Joe I think it will broaden out slightly but I still think it's a discerner's discerning market discerning buyers market quality people want bottles that are ready to go there's wines that's lots of supply of maybe there's a reason why there's lots of supply at the moment so I don't think it's quite ready to shift to this kind of broad all encompassing market growth cycle personally.

40:03Jonathan Stevenson:Yeah, I think I'd say it's going to stay narrow for kind of the same reasons. I think that I think if it yeah, I think I think in this type of market you know when it starts to broaden out is when people are starting to seek value because some parts of the market become overheated. You think back to when the market was really rising fast and suddenly champagne looks expensive, Bordeaux looks expensive, Burdeny looks expensive, everything has gone up so much. You start going, Where else is their value? Where else can I go and find it? And that's where it starts to really broaden out. And I just don't think we're at that stage at all yet.

40:37Jonathan Stevenson:And I think it really is going to stay narrower for me. And I think it's the deepest correction we've seen since inception, really. So I think it's almost accentuated by the fact when you have a narrower focus, when all those wines are still representing value, they're still going to keep people buying them until they probably get closer to within maybe 10%, 20 % of their previous market peak. so I'd be going narrow too so the one wine producer or watch list you'd flag so really yeah your sort of your hot tip as far as a wine or a focus goes if someone's out there now just saying I really want to buy some wine this last quarter of the year what are you recommending?

41:22I mean look based on what we've said it's narrow, buyers are being discerning I'd love to be able to get Crystal Ball out and pick a new producer that's going to perform really well but that's very very difficult to see in the market now I think that quality, scarcity are at the top of the bill and I think Soldera hits a lot of those metrics still performing really well throughout the whole market correction cycle and it continues to do so So buyers are still hitting the market price for these wines. And they're very, very difficult to find, particularly the older vintages. For those that don't know much about Sold Era?

42:07Yeah, so Tuscan Estate, really kind of iconic cult status, moved away from the classification system a long time ago, did his own thing. and has probably created the most singular Tuscan or Brunello that's out there that I know of. All the kind of burgundy junkies that I know are deeply passionate about the wine and that maybe tells you something about the style. I actually wrote quite an extensive blog piece on this producer on our website. Which you can find on wineinvestment.com. We'll put that in the show notes. Yeah, if you struggle with sleeping, that's a good one. to end the day. Well, I mean, I only produce soporific content.

42:52Tom? This is the car map, isn't it?

42:57Jonathan Stevenson:So yeah, I'll probably answer this two ways. I think, first of all, producer-wise, I think Jean-Marc Bouley out of Burgundy obviously got the three stars in the Michelin Guide. Not that we necessarily think that's the most influential set of listings, but I think where it is going to be influential is the names that probably people didn't know about appearing. Like Sean Mark Bulley is someone that we've been aware of over the last couple of years. Phil and I was actually in Burgundy and when we were at Souffle, we tried the red, if you remember. And yeah, it was really good, really impressive.

43:28Jonathan Stevenson:And obviously it had recently received 100 points from William Kelly and we started to get a bit more kind of notoriety. So it feels like a bit of a crescendo for that producer over the last 18 months of building understanding. So I think wines like that, when they suddenly get a light Sean on them, there's undoubtedly going to be more demand in the market prices are going to start to increase and again i think on the same vein you know do get p was included in there i think do get p is a much more established name obviously got the chambertan which is quite an expensive wine but i think that was still a bit of surprise for a lot of people to see do get p with the three stars and the michelin guide and again i think that will influence wine collectors the people at the top of the market the wine nerds who maybe haven't as much exposure to that name and thought oh actually it's interesting i'm gonna go out and acquire that and source it and to be fair some of the more recent vintages under Luak Luak Dugit P who's taken over the last few years I think have really driven towards kind of this low yield biodynamic organics farming and producing some really good stuff so they're the two names that I think will benefit the most from that listing and then outside of that I think I'm still a strong believer in if you're a long term collector or investor in the wine market we talked about the downturn we've just seen over the last few years, we talked about the kind of parallels and similarities to 2014 and 2016.

44:41Jonathan Stevenson:If I'm building a collection or building a cellar for the next 10 years, I just think there's so much value still under 50, 60 pounds per bottle that have got high scores that have got a few years bottle age. And I just think to myself, where's the downside in that? You know, again, you look at places like Bordeaux, for example, where maybe you're picking up like an 18, 19, you know, 2019 Bordeaux, like vintage looks so undervalued for such a high quality vintage, you know, five years of bottle age now. And, you know, Let's say you get like, I don't know, it could be like a right-back, like Le Geffelier 2019, right?

45:13Jonathan Stevenson:And you're probably paying the best part of like£40 a bottle in bond. If you have that in your collection, thinking about the next 10 years, I don't see how you're making a mistake with that type of purchase because one, at£40 a bottle, that's going to be incredible value for your seller to drink over the next five to 10 years. And it's obviously from a high-quality vintage, a high-quality producer, well-scored. But then the flip side of that, Choplon Mondo 19, I think it's still trading at like£300 a six-pack. That's incredible value. like classified Saint-Sémi-Lion Grand Cru great ownership great quality wine high scores unbelievably cheap and in the context of older vintage of Tropo Mondo which can trade at£100 a bottle so I just again I think long-term collectors long-term investors have a long view of the market building up a collection I just think there's just a plethora of wines in the market that kind of£250,£300,£400 per six pack that I think you could buy all day long at the moment in the market and probably even get a discount on market price and you'd end up with a brilliant collection of wines that I can't see falling in value more from this point on because they're already priced so attractively and if you can drink 97 98 point wines in 5-6 years time with that 10 year bottle age and you paid 40 quid for it I think you're going to be laughing you're going to be going well that's brilliant and I can flip it if I want to so I think it just gives you the best of both worlds and that's from a wine nerd can I add one more you can go first I just want to mention Claude Lombre just because I think there is a focus on tradable names you look at the most liquid wines in the market they're performing well they're trading a lot more than they were last year and Claude Lombre always consistently provides value for the quality of wine that it is there's enough supply that you're not always chasing around older vintages it's got a really strong name certainly for vintages pre-2022 LMA is really significantly increased prices um they're like 400 500 anything from anything from kind of if you can get your hands on older stock i think you get a 16 for like 250 yeah great value best value grand crew red in burgundy probably um there's probably other there's probably other other candidates for that but there's a there's a there's a nice comparison with uh bono de matre caught on charlemagne which is a similar story similar similar kind of brand standing that's been flying this and that's been in very liquid wine producing really decent quantity that's been performing exceptionally well um and i think there's quite a few parallels with with clode lombra so i'd also say if you can get your hands on decent volume of clode lombra at good prices you should go for it at this level domain do genie as well another one of those real more recent vintages like the quality scale a little bit yeah yeah yeah when they first look over i mean it does feel like it has been a good like a good period for the kind of bigger conglomerates that own multiple estates across different regions to really get their teeth into like how they're showcasing their wines distributing them i mean you know cheval de zandies we're just organizing for for someone to go and taste there in a couple of months and um i think they've got it nailed really haven't they you know going back to what we said around people trusting to know trusting brand yeah when you've got that reach yeah part of the lvmh as they have that reach and that ability to kind of package things up and sell things you know comfort from the brand yeah i think that's an interesting point to make um i think that question is interesting though in that if you pose it you know we've just been you know talking in depth and it's been numbers based so i'm sort of split in the middle on one side the answer to the question if i'm talking to an investor is numbers driven and i think the danger is you get your head into the wines personal preferences start coming in wines you like, wines you see value in, at the end of the day, the numbers will drive it and you've got to step away and then maybe impose some consideration in terms of their overall performance history.

49:08But I think that's not an excuse not to come up with a wine, but it's very difficult because otherwise I'm just going to give you wines I like and that's not the answer.

49:20Jonathan Stevenson:Well, look, another way to phrase it is if you go for the category of numbers driven as wines, then you know on Coltex which obviously we'll come on to you know we've just launched a lot of new features over the last few months I think it's the most data extensive platform anywhere in the world on fine wine I mean it's number one feedback we get from users is they love the platform because it's almost like a Bloomberg terminal for them they can get everything in one place but I think to kind of dovetail and segue into our next section from what you said you know on our on our Coltex platform now we have vintage analysis table we have a vintage screener a wine screener page where you can actually delve into data across 50 ,000 wines where you say, okay, show me vintages from 2000 to 2020.

49:59Jonathan Stevenson:I only want to see wines of a certain liquidity. So, okay, maybe I want to look at wines that trade a minimum of, you know, 50 times a year as per data. Then I want to look at wines that are undervalued on the fair value scale. So, you know, a mathematical model that looks at all vintages of a wine and estimates based on the quality of the wine, the age of the wine, where it should land on the price scale, you know, which wines are undervalued. So, you know, you could go in and go, right, if I'm being really numbers driven, in the current market to your point show me wines of a certain quality of a certain liquidity of a certain okay if you want to go in particular region or you want to go all regions certain price point okay i want to spend 100 pounds a bottle max and then there straight away you're probably gonna have 50 to 100 different wines that are going to be straight in your face or you know another way to look at it is stuff that i think is also really interesting where you go okay show me really high quality wines really liquid wines and i like that i like that because high quality in terms of critic scores and liquidity because we know it trades often.

50:54Jonathan Stevenson:But I want to see the wines that have fallen the most in value because you've got a really high-scoring wine that trades a lot, that's fallen a lot since its peak. I think that's interesting as well because it's almost like a stock market approach to finding value because you're going, okay, well, I know this wine three or four years ago traded at£3 ,000 per case, let's say, and since then it's dropped 40 % in value. So now it's trading at£1 ,800, right? But it's a 98-point wine and we know it's one of the most traded wines on the market. That's another really interesting vignette to look at. But for every individual user, if they're being data-driven, there's so many different ways you can skin that particular cat.

51:27Jonathan Stevenson:To our point around the trends, if we're thinking, well, actually, I want to focus maybe more mature wines, you can cut off that filter and say, actually, just show me everything pre-2016. Pre-2016, meet certain criteria, bang, you're going to have probably a plethora of opportunities there to go and place bids and have opportunities and bets. Go and place some bets on the market based upon your own philosophy your own mindset and i think we're the only platform in the world where colex is the only platform that exists in wine that enables people to be able to place those bets to do the research to have the data available to them in all one place to have their own philosophy and then follow that and i think to caveat philip's point were with with almost what tom said i think you can apply both to both a little bit now i think you know having all of that ability to actually weigh up exactly which vintage to buy, even if it's for your drinking, you still want to get the right value for money in the bottle, right?

52:23So I think you can actually apply a lot of that to what you're buying for drinking as well.

52:33Welcome to the hot seat, Phil Gearing. I know Jay's been in the hot seat, but it's feeling very tepid at the moment, so we'll see if he can raise that temperature.

52:42Jonathan Stevenson:Jay's still got a mic in his hands, so he can come back to that easy. Yeah, we're going to be talking Cult X. Tom's going to, well, Tom and Joe and Jay will be, I think, taking the direction of, well, once again, it's a numbers-based game as you'll get to hear, but I think I'm going to come in and also talk about what we plan to do with Cult X as we have a very exciting project upcoming and also just talk about Cult X after we've been through the numeric values of being a member into just the lifestyle. It's a lifestyle opportunity, and I think that's what we need to focus on and hopefully will excite you to the extent that you'll feel, you know, pushed to register and become a cult ex-player.

53:33Jonathan Stevenson:Yeah, look, I think, you know, it's good to give it a context to our regular listeners. Obviously, this podcast, you know, we try and take people behind the scenes. We talk a lot about our guests and the work that they do whether they're winemakers or journalists or different people within the industry. But I think, you know, we haven't really talked a lot about some of the stuff that we've done. I think that when we talk about wine market and going behind the scenes of the wine market, it's important, I think, sometimes just to talk about some of the stuff that we're building, which I think is revolutionary in the fine wine market.

54:01Jonathan Stevenson:You know, there's stuff that we've launched and built in the last few weeks and months that, you know, does not exist or has never existed in the fine wine market. So we just want to add an opportunity just to kind of reflect, you know, because we are doing a bit of a reflective episode, kind of looking at the first half of the year, looking at, you know, predictions going forward, but also looking at how much this marketplace has come forward. I think we had the vision of creating a stock market for Fine Wine when we launched Colt X. And, you know, some of the recent functions and features and functionality that's come out, I think, are, you know, really going to add a huge amount of value to collectors and investors that are out there in the market.

54:35Jonathan Stevenson:and sometimes it's weird for us because obviously a lot I mean everyone in this room everyone has been on this pod you know it's been working this industry for 10 to 15 years and I think if you'd have taken the time machine and gone back 10 years ago when you first started in 2014 or or Jay when you started even early in that and said imagine if there was a platform where you could trade 24 7 live you know 10 000 different in-stock wines where you could buy and trade off individuals like you where you're having all the transactional data all the pricing data you'd have all the critic schools, all the tasting notes in one place.

55:07Jonathan Stevenson:You could place bids, you could offer, you could request delivery to five, six different countries around the world and get delivered the wine next day. These are the types of features and the functionality. And back then when you'd have just been like, that sounds unbelievable. That doesn't even sound like it would ever be possible. But we sit here today with the most advanced pricing algorithm historically and current for over 50 ,000 different wines. We sit here with more than 300 million pounds worth of transactional data, free to use, free for anyone to register and get access to. We have 600 ,000 drinking windows on the platform.

55:47Jonathan Stevenson:You know, if you're a collector who just, all you care about is drinking your wines, you import your cellar into the platform. And immediately, if you've got two, 300 wines, you're going to have every single critic score and tasting note that exists for those wines immediately available on every single wine. and you're also going to have the drinking window for your whole seller, and it's going to tell you wines that maybe pass its peak, wines you should be drinking soon, wines that maybe you should think about selling because of the drinking window. You know, just little bits of insights like this, and of course with the evolution of AI we've seen over the last few years, the insights that we're able to provide users using AI connected to this data that's a unique data set to us through our proprietary platform is really creating some unbelievable opportunities.

56:27Jonathan Stevenson:And again, I think for people with big sellers, it kind of takes all the hard work out of it. And, you know, we talk a lot about this thing about the hummingbird effect, you know, when we first started researching the market and the hummingbird effect was, you know, to make one decision, you have to go to so many different places. You have to go to Wine Search. You have to go to Venice Media. You have to go to, you know, different websites and platforms to kind of get all that information to make one decision. Well, we're giving everything to you in one place in a Bloomberg-like terminal with the best user experience and available on app and online.

56:53And I just think it's been such an incredible journey.

56:57Jonathan Stevenson:But I think where we are today with the functionality i you know sometimes i just have to take a step back and go i can't believe this even exists like to think that this exists today versus 10 15 years ago is actually quite mind-blowing um so yeah i mean it's a good opportunity for us to talk about cult x and i think for anyone at home who's listening you hasn't had a chance to look at the platform then you know there's lots of stuff that you can kind of access and get used to for free and play around with and we'd love people's feedback on the platform as well just a from a kind of personal experience you know talking about kind of 10 15 years ago and and even just being in industry and every day and having to have all that information you know you get kind of tab fatigue on the computer right yeah you know you've got wine search open you've got the critic scores open you've got livex open you've got all this all this information that you have to toggle between between each of them so that's from someone who's at the kind of at the coalface has been at the coalface for the best part 15 years and you know it's uh now it's all centralized in one place it's just it's almost serene when you're when you're when you're looking looking through things and how quick it is to try and find the information and the answers that you want when now we're talking about 15 years now if we go back even further in time phil who's sitting here as a guest 25 years ago 25 years ago set up a platform called financial wines which i think you know try to solve some of the some of the things that we have a platform for today so is it surreal for you kind of 25 years later to look at what we have today versus what you were trying to build that oh absolutely and i as you were talking then i was smiling to myself thinking that when we launched financialwines.com in 2001 you know we were concerned that we were offering uh price spread data in what was a very simplistic form and we got criticism because it was too complex for wine buyers.

58:48And so when you now look at Colt X as an example, it can be mind-blowing in terms of the information and the data that's there. But I think what's important to really throw in here is that, yes, if you're a trader, if you love analytical data before you make a decision, and maybe you know your wines as well, then you'll just waste your weekend on this, because it is just, you know, the perfect tool. But I would like to say, because I think this is very important, that this was also positioned as a lifestyle tool because it immediately removes, it makes life easy to buy wine. You don't have to be a wine expert.

59:32You can, you know, you can get guidance on it. But the ability just to place bids, secure a wine, you know, if you're sitting in New York, it's 14 days, it arrives on your doorstep and it's got guaranteed provenance, which interestingly enough, brings into play the existing fine wine auction market, which, you know, has the inherent problem that the wines you're buying haven't got guaranteed providence and there's no comeback. So, you know, I think whilst, you know, we're not positioning as a direct attack on the fine wine auction market, you know, this tool is retail, it's fine wine auction, it's investor, it covers all angles.

1:00:14and it really doesn't take much to get going. The best thing to do is just register and start playing around. And I guarantee you, you know, when you start on Saturday morning, you'll suddenly find it's Sunday afternoon and you suddenly own 10 cases of wine. And that's where you want to be.

1:00:32Jonathan Stevenson:Just going back to when you did financial wines, I mean, obviously you came from a kind of financial markets background. I mean, what was the challenge that you saw that you wanted to try and solve? I mean, and we presented it in what we thought was a very simplistic, because we were still dealing with the same issues. You know, suppliers with the same wines, and we're talking price spreads that quite on average were 25 % and way above. So there was a real need for clarity. And it was presented in a very simplistic form. You chose your wine, it brought up the spread, and then you had to pay to go to the second level where you got a list of suppliers and their prices.

1:01:10I mean, for us, it was an obvious decision if you were buying wine. But we found from feedback that this was the early days, obviously, of this type of model, that people found it too complex, which maybe said something about our fine wine buyers at the time. but it doesn't say that now because we're dealing with a totally different market across a much wider age group and a different social environment as well.

1:01:41Jonathan Stevenson:Yeah, it's interesting you say that because I feel like the modern day equivalent of what you're trying to solve for back then which I'm not saying it was more of a simple challenge but I think back then people didn't even know back in 2001 people didn't know that if you wanted to buy Chateau Mouton Rochelle 2005 there was 10 people selling it for 10 different prices. I mean that's how simplistic it was then that was the challenge that you were trying to solve for which is let's just tell people that there's these 10 people selling this wine this is the price and make it easy and simple and do that across a whole library you know tens of thousands of wines whereas i think today obviously the market has moved on but the challenge we have is kind of a similar one which is you know you have a bit like you said about the auction houses and like you know you've got livex which is a b2b platform you've got the auction house you've got the different mine merchants and brokers whatever and you've got all these different kind of closed off pools of liquidity and what you have is you have like customers or collectors who kind of especially in the downturn bounce around from one merchant or platform to the other because oh I'm not happy because I can't sell my wine at a good price or it doesn't sell quickly enough there's not liquidity so I'm going to go to someone else and the grass isn't greener you go to another small player and they're undercutting everyone else in the market and they still can't sell the wine and they come back to you and they kind of bounce around we're seeing that a lot and realistically the solution is just the solution is just piling all of the liquidity all the buyers all the sellers into one single location and that's what we're trying to do and I think what is interesting what you said there is kind of what we've tried to do with our order book and if you go onto the order book of any wine on Coltex, you can now see any Coltex members or users that are offering the wine.

1:03:05Jonathan Stevenson:You can see the LiveX API feed that shows you all the LiveX data who's bidding. We're going to have the Border Index exchange on there, which is the second largest liquidity pool in the world for wine. So two largest liquidity pools for wine, LiveX and Border Index, are both going to be fully integrated, fully transparent. You're going to see the bids, the order book. And then on the other side, you've got the members and the platforms. We're also going to have all the merchant data, which is kind of like what you were doing with financial wines. But you've also got external verified sellers. So anyone now with a bonded warehouse you can verify their own their their stock holding can provide their inventory that we can verify for an api and through our technology they're now going to be able to offer those wines as well so you know really for us it's like well if we get everyone together into one single venue it just makes it better for everyone because it's more easier to sell more easier to buy more easier to price more liquidity more transparency quicker faster better experience all around and i think that's yeah you know that's kind of like the new challenge which i think is kind of like a two three step evolution from where you were that we're trying to you know kind of create within cult x yeah and we talk about it we talk about cult x and you know we refer to our client base as as individuals you know because it is you know very private private client if you want to call that use that term based but this has much wider benefits i mean if you're a if you're a wine director if you're a director of purchasing for a restaurant group if you're a sommelier that's that has the difficulties of finding the right wines at the right prices, they can sit at the bar, have a glass of wine, use the app.

1:04:37They're based in New York, and I'm referring to New York and I'll explain wine in a minute. Within 14 days, the stock arrives and it's guaranteed provenance. I mean, this covers the entire multi-tiered arena of fine wine buying. It doesn't matter who you are, you need to be on Colt X. And if you're not, you're losing an opportunity. The one thing I would say is that the wine market has quite a large breadth of different types of buyers, different motivations, different objectives, different experience with wine. And I think, you know, for us, the kind of genesis of Coltex was like, OK, we work with our private customers.

1:05:22we advise them on portfolios it's very much a kind of white glove you know advisory type of service um and i think that throughout the years you know i think we'd all agree that there's been lots of people we've spoken to that maybe didn't quite fit that mold you know it was almost a square peg in a round hole uh they like to do it themselves they buy from auction which is obviously absolutely no issue because wine is something that people are very passionate about and you know part going on the journey and building your collection is is is you know where the joy is and i think that you know building cold text not the only reason but one of the reasons is why okay we need to probably make maybe a slightly different solution for those for those types of types of buyers at the same time we want to improve liquidity for our existing customers and the entire market as tom says try and capture as much of that liquidity as possible in one place to to to improve the whole pie almost.

1:06:18But what's interesting for me and how things have evolved in how the adoption of AI and how that's helped us improve the features that are available, the increase of data that we have, is that now someone who isn't self-direct, isn't necessarily one of those people that I mentioned previously that likes to do it themselves and likes to have all the information to hand, you know, you don't even need to be experienced to use Coltex. everything is there at your fingertips. You can just create an account and all the information is there. So it really is a kind of an environment that suits every type of approach to the market.

1:06:57And I think that for me is pretty exciting because I think one of the issues that wine market has is the fragmented nature of the liquidity across the whole spectrum. Wine's bought in restaurants, wine's bought from wine merchants, wine's bought from exchanges. All fine in their individual pockets, but that's not the same as more traditional markets and more sophisticated markets. You have bourses that capture a lot of that liquidity, a lot of that trading, and in turn that helps things move properly. So I think there's quite an exciting development. How the platform has evolved is it's become a lot more accessible to everyone, which I think is quite interesting.

1:07:35Jonathan Stevenson:And you mentioned obviously New York. Obviously, we launched into the US a month or two ago just before the summer break, now shipping to more than 30 states in the US within a 14-day period across 10 ,000 different wines. Obviously, Jonathan used to head up our New York office, but obviously it's something that we're looking to expand into. I mean, maybe you can just talk a little bit around the US market and how we think Colt-Ex can serve a different type of user over there. Yeah, I think it will serve, obviously, our traditional market and we'll provide those clients with, I think, a significantly upgraded service in that it empowers them to become the decision maker.

1:08:20you know those clients that are existing clients particularly of jays they'll still come back and talk to them about what they're you know what they may be thinking and so on but also at the same time it gives them you know the ability particularly if we're talking about clients that are buying you know uh you know let's just say you know one to three hundred uh pounds a bottle drinking wines you know that becomes quite exciting for them in the way that the app provides that but i think because i mentioned the lifestyle part of it uh the launch uh as we say the formal launch in October is really designed around we've got a program running at the moment providing awareness and we've got a lot of focus on us from the media in terms of this particular app and its functionality and the excitement is actually coming towards us in waves rather than us having to sell it.

1:09:13So we're managing that and in a way that we want to, you know, relaunch it in the US with particularly with the end to end delivery service, which is absolutely crucial, you know, in our mind. So, you know, I think that, you know, we see we see particularly, you know, as we're launching in New York, we see the Manhattan market is providing us with all of those areas that we want to tunnel into with Colt X. and we're pretty confident it's going to be an exciting time for wine buyers in North America.

1:09:47Jonathan Stevenson:It's interesting because obviously, Jonathan, you were there for a number of years. Obviously, whilst we're kind of building this concept and idea out and I feel like you always were quite a big proponent for it being a good fit in the US. And we've had some pretty good traction really early on with some of our kind of highly engaged early adopters over in the US. I mean, what's your view? Yeah, I mean, definitely. I think what we've found, I guess, timing wise and having been in New York for four years or so at the back end of COVID, I think it was very much a case where we were engaging with the right people.

1:10:18There's obviously a massively sort of decorated wine collectors space there. And I think from my perspective, the one thing we were kind of lacking at the time a little bit was that immediacy of being able to roll out deliveries. I think the nature of investing in wine as well versus just simply collecting it. I do think they're in some ways a little bit more like some of the collectors Joe would work with out in Asia, whereby they prefer to have, you know, hand to bottle. They want tangibility. They want the wines in their cellar at home, which is completely fair enough. And I think with Colt X, obviously, we can now really build that out in a much more structured manner.

1:10:58And I think, you know, from looking at all of the stuff we have in terms of, to Phil's point, auction market prices have been moving up in the US, weekly auctions, buying per bottle auctions. I think what we're aiming to try and do is provide what we hope to be a little bit of better access really simply into the in-bonded and provenanced market that currently exists across the UK, across EMEA, into Asia. And it seems a lot less well serviced into the US for what is a massive market there. So I think, you know, currently we're in that window with the tariffs, which we do anticipate to hopefully come off at some point.

1:11:42But I think, you know, even with that in mind, the, you know, the prices and the bids you're able to match at the moment in Coltex, given where the market is, are incredibly attractive. So I think, yeah, purely from a price and an access point alone, Coltex really should hit the ground running over there.

1:11:58Jonathan Stevenson:Look, thank you very much, everyone, for joining us. I think it's been a really interesting podcast and you know good opportunity to reflect on the first half of the year great to have Joe back on the hot seat after a few episodes away and for Phil making his debut on Corks the Colt Wines podcast thank you very much for coming in and thanks chaps yeah adding a bit of gravitas to the data trudge that we wanted to go through but look thank you much for joining this was episode 16 we really value and appreciate you following for you liking uh for you leaving comments contacting us um you know this podcast really uh is built for our audience you know we want to take you behind the scenes we want to give you information we want to tell you more about the inside of the market and we hope we're doing that and hope you're providing some really good content so if we are you know we need to do you need to like you need to subscribe and comment but on behalf of the uncorked team thank you much for listening and we look forward to seeing you again or speaking to you again on episode 17 take care A testament feedback through this Что's Test of Thoughts