Ep. 1568 Bridging The Communication Gap | wine2wine Business Forum 2022

Since two thousand and seventeen, the Italian wine podcast has exploded. Recently hitting six million listens support us by buying a copy of Italian wine unplugged two point o or making a small donation. In return, we'll give you the chance to nominate a guest and even win lunch with Steve Kim and Professor Atilio Shenza. Find out more at Italian One podcast dot com. Italian wine podcast is delighted to present the series of highlights from the twenty twenty two White wine business forum, focusing on wine communication and bringing together the most influential speakers in the sectors to discuss the hottest topics facing the wine industry to Don't forget to tune in every Thursday at two pm, Central European time, or visit point to wine dot net for more information. Find wine supply. Here on the stage is Nick Palmer. He's a head of product for the livex livex is the leading, fine wine online trading platform. And, I will be honest with you when, Steve actually asked me to to moderate this, this topic, actually. I was a little bit of, doubt because it's, it sounds like a very narrow and specific topic with a difficult language. But actually when I started to investigate more about what what Nick is doing, then I started to see really the the opportunities and the possible good outcomes for all the one industry, and, or the supplier of the of the wine industry, the supply, one chain. New technologies which offer solution to real life problems, almost in, invisible way, sometimes frequently in a invisible way. We have seen, especially during the pandemics. So, yeah, really attached to this. And, these outcomes can be really important for the supply chain of the wine. The wine industry. More efficiency, more transparency, reducing the mistakes. So, please, Nick, if you can introduce your topic. Patrick, thank you very much. I will try my best not to be too technical and try to make this as kind of applicable as I can. But first of all, thank you very much for wine to wine for inviting us to speak today. My role as Head of Product at LiveX, that may be an odd title for you to think through, but What it means is that my team and I are responsible for the LiveX technology, the systems, and indeed the innovation, that LiveX tries to bring to the sector as a whole. So, I'm very lucky to have a job where I can continue to be a bit of a wine geek but I can also start building out some interesting things that we believe will help everybody. So the topic today is whilst it's about communication and technology and supply chain actually covers what is quite a big process So up on the screen is a sort of a simplified supply chain from producer all the way through to consumer. Now today, I could talk about any one thing in there. I could be talking about warehouses. I might be talking about, I don't know, critics and publications. Possibly foolhardly, I'm going to talk about the whole thing. We'll see where we go. But what I want to do is I want to start at the end and I want, well, bottom end and I want to start with the consumer because I think we're all here ultimately to do business and to make that consumer happy in one way or another. So what I think is interesting particularly since the pandemic, but arguably pre pandemic is digital transformation of wine businesses. I think everyone's realized even in our rather sort of slow moving sector sometimes when it comes to technology that having a good website, having a smart clever delivery system is really not just something, rather sort of exotic, but actually the norm customers, consumers through the likes of Amazon have come to expect that you can find something online you can book a delivery, you can get it, you can track it. Now what that is is a lot of intertwining systems behind the scenes, doing things in a smart sharing manner that's possibly completely invisible to the consumer. But that is where technology has gone. And it's been difficult in the wine trade, not least because often we're quite fragmented across this process behind me to actually bring all those things together. So what I'm going to talk about today is, something that can help us do that. Now there is some good technology out there. I can pick up my phone. I can take a photo of a label on a bottle of wine. I might be able to see how much it costs, where I can buy it, possibly what my friends think of it. And that's a really good example of when this works. Those that have pushed this boundary and have been invested in this kind of technology have done really well, but I still think they're the exception rather than the norm. And having made that investment, and sort of taken that, leader leading position, they're also not necessarily that keen to give it up. They don't necessarily want to share what they've done. It's in their interest to keep that business going forward. And I think that's completely understandable. I think most of us would probably take the same view. At LiveVX, we think a little bit differently. And partly because our business, which I'll speak about a bit more in a minute, is a network of other businesses. For us, sharing some of our technology in the hope that we bring everyone up is actually the way that we're all going to do more business. So what I'm gonna go into now is really what we've done to help achieve that. And this isn't an academic exercise. This isn't something theoretical. This is real. It's already being used. And I would imagine in the last few years, some of you have probably dealt in this system without actually realizing it was that. Just dialing back to wine itself for a little bit, we work in a pretty challenging industry. Lots of products, lots of countries, lots of wines. And of course, it's the reason that we all love it. There's always more to learn. There's always more to taste. And that breadth and diversity is really part of the joy of wine. And indeed how probably each of us have carved out our role possibly carved out a business. But with that complexity comes a lot of challenges and potentially a lot of room for mistakes to give you some examples We had someone wanting to sell some wine on our trading exchange a couple of months ago and they came right. I've got some having on rouge to sell. Great. Having on rouge de Margaux, everyone knows that wine. It surely it's that No. There's a border superior called Chateau Pavingon Rouge. We'd never come across it, but absolutely legitimate. We were glad we didn't make the mistake. And think of that had been a particularly old vintage and then you had to go out to the market to resource it. You're dealing with what could be a pretty expensive mistake. Another interesting fact that we've learned whilst building up, the database I'm going to talk about is Ridge Montebello. So Ridge Montebello has had seven different naming conventions since its first vintage in nineteen sixty two. Now that's fine. If as a wine professional, you see that, you're probably going to know what it is. But if you're someone perhaps in a warehouse or moving the stock onto a truck, you probably haven't got that wine knowledge. And those subtle differences can mean a lot. You may be doing valuations of a private wine cellar perhaps working for an auction house. These small differences, making sure that something is authentic. Is worth knowing about. But to have that expertise and that knowledge to hand to actually get that right is something I was talking to some of, sort of NW and NW students around here earlier, you know, even they admit they're never going to be on top of absolutely every wine in the world. So what we're trying to do here is to bring that knowledge pool, a very basic simple level of that knowledge to the sector as a whole, and they can then get on with doing what they do well better. These mistakes and these difficulties go away. So this very simple idea is an elwin code. And the seven digit number you see sitting underneath each of these blocks above me is a code. Now that code is linked to a database of products that is free, open source, and is licensed under something called Creative Commons, which means in tech circles, it will always be free. Now linked to that code is a modular system that you can then start to use. And this is as tech as I'm gonna go, and I'm gonna I'm gonna come back. This is what Nellwyn code looks like. So the first block is the wine. Paveon Rouge or paveon Rouge that have different different ones, SASakaya, etcetera. The rest of it, you can do with as you please. So four digits for a vintage and then some more digits to specify the pack and the bottle. Literally describes if you so wish and you don't have to have it at this resolution, the physical box of wine. From that, you can start to do lots and lots of things. This doesn't have a price attached to it. Doesn't have a critic score attached to it. But once you've got it, you can start to hook these bits of data onto it depending on what you want. We record a few other things against it. So we record a really nice, clean, unambiguous display name. That's really consistent. We store some legal designations against it, so like doc, docG, etcetera. And possibly biggest of all, because people have tried to do this in the past, we record everything on a vintage level. So your seven different versions of Ridge Montebello are documented through this system, and you can go and see it, and you can check that you're reading the right thing. Let me just flick through. At the moment, we have around about a hundred and sixty thousand wines in this database. Wine to wine business forum. Everything you need to get ahead in the world of wine, supersize your business network. Share business ideas with the biggest voices in the industry. Join us in Verona on November thirteen to fourteen twenty twenty three. Tickets available now at point blind dot net. So that's the the Owin seven bit. If we spin it out with vintages, we're up to about eight hundred thousand. This has been a project going for ten years now. Probably only really surfaced to the wider populous in the last three years, and it's continually growing. And we'll talk a little bit about how that can be contributed to, in a while. I'm going to go back to this slide. I'm just going to talk a little bit more about LiveX and why this coding has become so important to us. And hopefully it gives a flavor, therefore, of what it can do for others, and I'll indeed go into some of those examples. So for those of you who aren't familiar with LiveX, you may have heard of us or seen some of our charts charting or following the performance of the wine market or performance of individual wines. You might have read some of our blogs and some of our research pieces as well. That's one of three main pillars of the business. Now we're a B2B business. We have about six hundred members globally across Europe, UK, Asia, and the US. And our research shows that those six hundred or so customers are responsible for about eighty five percent ninety percent of global fine wine turnover. So we really sit at the core of all the major players big and small right around the world. The first big pillar of what we do is our exchange platform. We're a trading platform, and those six hundred members can look to buy and sell against firm contracts with confidence through our platform. Behind that sits our second pillar, which is a big logistics network, covering the same territories, warehouses, and various shipping partners, who actually then fulfill those trades and get them to the businesses. We back every single one and we make sure that we can deliver it. And then the third and final pillar is our data. So you can imagine that all of that world generates a lot of numbers. Indeed, that's how we then make some of our charts and and and indices and things like that. Those three elements are big entities in their own right. And we need a way to interweave them so they can speak to each other, particularly when we're trying to shave a day off our delivery times. We needed a way for our system to talk to each other and that was why we built Elwyn. And it's road tested every day. It hopefully has some value out to the rest of the industry. And so this is why we've chosen to license it for free and ensure that people can can join in with it Our six hundred members have different needs on any given day. So at present, we have around about twenty thousand active trading markets at any one time. And those can change quite quickly through the day. We have around about quarter of a million prices for benchmarking available at any one time, and we absorb over a million price points every week. Everything stitches together with those coats. If we didn't have it in our system, LiveVX wouldn't be the business it is today. So we hope that that kind of, that solidity behind it shows just what it can be capable of. For us, it removes our errors. We don't have to re key things. Things just flip through the system very, very easily. And when it comes to building up partnerships with our third parties, whether they be warehouses, shippers freight forwarders, publications. This allows us to communicate with them in a really, really clear way. And they like the system, and a lot of them have been adopting it. If we move away from LiveX itself, this wasn't meant to be a direct sales pitch for live experts, but it's always nice to to inform you guys a bit more about what we do. When we do go and speak to third parties, customers, or people that have found us through this database, they almost all say, wow, why hasn't this been done before? It seems obvious. And in a way, I would imagine a lot of you, you possibly have a version of this yourselves in your businesses, but it's either very difficult to update, or you don't have to staff to update it, or you just get on with what you've got. The reason they like this, there's a there's a couple of good ones. First of all, it's a clean set of data. So in their system, they finally got nice information to use. One person also to me, it's great. My buyers finally have to start spelling things the same way between them. And and even just that was something that was incredibly useful to have got through. But if we think about the digital side of things, they've got clean and good data on their websites, which is then giving them a much better search experience for their customers One member in the U. S. Said, as soon as I had introduced Elwin into my website, my Google search rankings jumped a couple of pages. No spend, no extra work with Google, just simply having something that was uniform and well understood immediately gave their business a boost. So again, having this well thought out well structured bit of information actually has these sort of small knock on effects that that are incredibly helpful. In the last couple of months, wine searcher has fully adopted Elwyn. Now they've done this for a couple of reasons, and their reasons actually are of benefit to producers as well. So they've done it for listing accuracy. People send them lots and lots of data. It's a mess by bringing everything in and under Elwyn. They had a version of this before, but because this is already in so many merchants and and other systems, it's actually allowed them to start doing their work faster and better. And on the flip side, their results pages are now much more accurate with listings with more accuracy going to the right vendors. So if you're a producer and you're trying to get better control as to where your wines are appearing, make sure your wines are appearing in a in a clean way. And that could be on restaurant listings as much as going out to private clients or indeed to businesses themselves. This is a really simple way to get those things done at a higher quality. And you may you may know your wines. But if you can simply adjoin this code to the information you're sending out, you're helping everybody else down the track, be it someone who's putting it on a boat or a plane or putting it up into their system. The data set has been a boon for students. We have lots and lots of students from universities around the world downloading it because quite simply there's not this world of wine ready ready to be seen. And if they then want to do some studies on a particular country or particular wines for a particular country. They can cut straight through to that data and then begin to start attaching their research to how it works. On a similar vein, it's allowing people to monetize what they do better. We partner with a number of critics for Venice probably being the most high profile. For them, attaching Elwyn codes meant that they could distribute this data around to our six hundred members very, very quickly and easily, and they could monetize it. They could bring in a commercial pricing tier. And they now know that their scores can be on, K and L wines in the U. S. On the web pages or Berry Brothers in the UK. Your data is up on the screen. We're seeing more critics, including critics that perhaps are working just for themselves, and maybe don't have a tech budget or a lot of resource or want to spend money on this, doing things with Alvin because suddenly they can harness the LiveX network. So actually make this into a viable stream of income. Another interesting one, which is still to sort of come to fruition, is, some chemists doing gas chromatography. So using lasers through the glass bottles to analyze the profile of the wine. Couple of uses there. One is to study the aging process, which I think is, you know, is a great thing, and I think there's a few people that have been looking at this in the last decade, but also it's about authentication. You can start to bring up a footprint, sorry, a fingerprint of all these wines. You suddenly got an incredible resource, and they are hooking this onto Elwind because they know once they're ready to come to market, they can speak the language of the auction houses of the warehouses of the merchants all at once. Something that probably was a bit of a barrier for entry to the market is solved, and they can do what they're doing well. There's a couple of wider long term industry benefits that Elman's also helping, and I'll just mention a couple of them. The first is a database of ABV values. So alcohol values. If you're shipping, for instance, in and out of Singapore, you'll know just how important it is to have that information to hand. And if you're wrong, your shipment may be blocked, it may be sent back, you may be fined. We have a growing database of alcohol values linked to this, which is available right now for for all LiveX members which will give them this information in a couple of clicks. Some smarter people than me have also gone one step further with that, and they've linked it up to the exciting world of commodity codes, HS codes, tariff codes, something that some of you may have to deal with, but not in a joyful way. It can take fifteen, twenty minutes for people to discern what these codes should be. It's a very arcane set of rules and regulations to put these onto your international shipping invoices. We've gone from asking people to do that to an algorithm hooked up to a system on our side that gives you that code in a couple of seconds. We use it internally at LiveX to to run hundreds and hundreds of pages of documentation every day to allow our business to keep moving. Again, that's something that's freely available for LiveX members, and it's just part of our offering that we give to them. So these are things that we, you know, are keen to bring out to the market for the benefit of all And it's gone of the attention of some governments as well. So we're also now speaking to various, I think the terminology is single window or single trade window systems. The various international governments are running. To allow basically the automation of a huge amount of of, of trading paperwork. And these are the things where Elwyn, I think, is really going to, to really make an impact on the industry. Rather bizarrely, the goal is for it to be invisible. If we can get it into such a level where it just runs behind the scenes, we pretty much achieve what we want to do. But we need, and we are really, really keen to help people come on board to use it, to get the information in there that they'd like, to help this move forward. So final part of the presentation really is just a quick word on that. You can come and speak to us and we'll help you get involved with Owen. If you want your products in there, you feel there's a value. Fantastic. If you're an agent or a representative of a wine in a certain region. Great come on board. We want to understand to get those in. We've got a really good team internally that does this. So we have a fantastic intern program with students from the likes of Keds business school in Bordeaux, Guysenheim in Germany, UC Davies in the U. S. And Plumpton closer to home, for us at least, in the UK who are coming in to contribute to this. And when they finished their internship with us, they're taking this knowledge into their wine businesses that they're moving on to. So we've got this sort of younger generation now who are helping put this together, build it out for the future. But the really the key thing is If you want to help the people up and down the supply chain from you by ensuring that this code is in there, we can basically help the industry as a whole work quicker. So just a final thing, this is Italy, in elwyn as we look at it today. So we've been adding wines this year at quite a pace. We obviously had some wines that are in there. And what you can see from some of the geographic information that we actually store within each wine is sort of the subdivision of things like regions and subregions, classifications, etcetera. Imagine that against every single wine producing country in the world. And that includes Croatia, Slovakia, Switzerland's Canada. It's wherever there is a wine where we see it being regularly seen on price lists. Not necessarily traded on the secondary market, just a wine that's out there and in the public. You're gonna see interesting things like this. And this is a kind of kind of view, you know, that we do see some of these research students coming in to look at. And it's a really nice visualization of of of what we put together. So a brief summary. So all of this is available through APIs and technology systems. That's really a given in this day and age. But what it fundamentally is is about a common language, a universal language, and it's about people not getting mixed up. Getting confused, selling their chateau pavalierge when they should have had a nice second wine from Margaux. I hope that won't make sense. So thank you. Thank you, Nick, for this clear and, informative presentation on such an intriguing topic, new, but at least also very basic and easy to to understand. So, before to ask some, the audience, if they have any question, one question, a few questions to, to ask you before. So first of all, you say that, elgin was adopted by many important wine institutions such as BBR, Antonio Galloni, wine searcher, but also I read about London City bound. So that mean, the credibility, the consistency of the system. But, which are the main challenges for this system, which is an open source and easy to get. So which are the true challenges nowadays for the spread of this system, which can help the one industry. The hardest thing is to get everyone in it for the first time. So we've all got our our weird and wonderful naming conventions and your your lafitte in your system is someone else that's shadow lafitte high from the rothschild, and simply getting everyone's naming systems to mesh together is is a task. Thankfully, we have, we again have some algorithm based systems that can help people do that. So we've had to do this ourselves with the data we assimilate every every week. And that very same system that, again, we've somewhat battle tested, we actually allow our customers to use There's no denying that particularly for a slightly sort of stubborn winds, there will be a little bit of initial lifting. But once you've done that first sort of matching, I guess, process or mapping process, you're basically ready to go. Thank you. And the second, part of my question was, it shouldn't be in in with regard with the authenticity. I was thinking on a new blockchain system and the blockchain development. How can they, fit together with the Halloween? Or they are completely, opposite things? How can one industry? You can manage this? Right. They're they're they are actually one on the same thing. We have some we have some partner companies who are coming up with their various blockchain solutions already, and that elven identifier is key. If that supply chain I showed you, is to work properly as a blockchain. You can't have a translation step at each point of, well, this is product a, but I call it product b. So some businesses have have been very thankful for us for bringing this to market because it means that some of their concepts around bringing together a blockchain have actually become realized. They finally got that piece where each of the participants can understand what then comes out from that rather sort of, ambiguous blockchain piece, and it comes back into a real product that they can then go and handle. So, we would actively encourage people developing those kind of systems to come and speak to us. We'd love to help them develop their system because it's a bit of a wild west at the moment with, some of these decentralized systems. One of them eventually, I think will will come out on top, but I think it's very hard at this moment in time. Particularly with some of the upheavals in the tech sector to really make a decent call as to who that's going to be. But these fundamental pieces that everyone can come and see is really the only way that that some of those systems I feel will actually ground themselves and gain the adoption they need to. So thank you, Nick, for this presentation. And thank you for to the audience. Listen to the Italian wine podcast wherever you get your podcasts. We're on SoundCloud, Apple Podcasts, Spotify, email ifm, and more. Don't forget to subscribe and break the show. If you enjoy listening, please consider donating through Italian wine podcast dot com. Any amount helps cover equipment and publication costs. Until next time.