NFTs – or non-fungible tokens – dominated headlines in late 2021, commanding ever-higher sums, with some NFTs going for over $60m. Musicians including Grimes and Aphex Twin have helped add to the buzz.
An NFT is a one-of-a-kind digital asset, and can be an image, video, illustration, or animation, existing as a unique digital token living on the Ethereum blockchain. While consumer education of NFTs remains relatively low, brands are steadily entering the market; the likes of Prada, Gucci, D&G and McDonald’s all want in, drawn by NFTs’ edgy image and dedicated following, as well their burgeoning market.
Drinks brands are also increasingly playing in the NFT space. Those that have already made a move include Dictador Rum in partnership with Lalique; Irish whiskey maker Kinsale; Ron Carúpano rum; Penfolds wine, and Bacardí.
“When it comes to alcohol, NFTs so far seem to break down into two main categories: NFTs as a different way of selling physical bottles, and NFTs as a way of selling something intangible, for example, Budweiser’s NFTs of historical can designs,” comments Guy Wolfe, Strategic Insights Manager, IWSR Drinks Market Analysis.
The former use of NFTs likely has the most potential to impact the very high-end of the market, such as for status spirits (spirits sold at US$100 and above). “For brand owners selling NFTs, the actual bottles can remain stored in a cellar in perfect conditions and only shipped to the buyer when they request it,” says Wolfe. “This allows for much easier re-sale, as the rights to the bottle can be sold while the actual product stays exactly where it is – useful for high-value items that need special storage conditions.”
In some cases, NFTs are being released for products that haven’t even been made yet. Pinned to particular harvests, or even individual plants and crops to be harvested at a particular date, many drinks brands are marketing their NFTs on speculative value increases for these products as anticipation of their launch builds. In some cases, brands are able to sell an NFT for a future harvest upfront, realising revenue for a product that is still maturing.
NFT marketplaces specialising in alcohol, such as BlockBar, have started to come to market as well. These specialist sites make it easier for consumers interested in limited collection bottles or status spirits to invest in and trade NFTs. For brand owners, NFT marketplaces can provide additional support in marketing and advertising the products – similar to traditional ecommerce marketplaces or specialist sites, such as Amazon or Vivino.
The latter use case – using NFTs as a way of selling something intangible – has given brand owners a new way to engage with consumers, and in some cases, brand owners are using NFTs as part of product launch campaigns.
Stella Artois, for example, was one of the first drinks brands to embrace NFTs, teaming up with virtual horse-racing game Zed Run in July 2021 to create its ‘Racing in the Life Artois’ NFT campaign. As part of the campaign to celebrate the brand’s long history with horse racing, the brand created 50 auction items in the form of NFTs. Each contained a Stella Artois art piece, one Genesis Racehorse NFT and a Stella Artois First Edition Skin. The racehorse NFT is the equivalent of owning a digital racehorse, which can be raced on the Zed Run site. Multiple bids could be placed for these items, with payment made via cryptocurrency Ethereum. To mark the occasion, Zed Run created a 3D Stella Artois racetrack inspired by The Life Artois.
AB InBev commemorated the launch of their new light beer, Bud Light Next, with the release of an NFT called the Bud Light N3XT Collections, featuring 12,722 unique tokens, each digitally randomised and using colour cues from the pack, aiming to celebrate “the passion points of today’s 21+ consumers”.
Interestingly, some brands are also launching NFTs alongside real-world rewards, such as exclusive bottlings and meet-the-maker experiences.
With the use case for NFTs expanding, these digital assets are introducing more consumers to a new era of the digital world – the metaverse. While still at early stages of development, brands are using the metaverse to experiment with new ways of connecting with consumers. Miller Lite, for example, launched a metaverse-based bar in time for the Super Bowl 2022. Visitors to the Miller Lite Metaverse Bar had exclusive access to the brand’s 2022 Super Bowl ad, which did not air during the televised game. Other perks for visitors included rewards for select virtual patrons and other ways to engage.
As ecommerce sales become an increasingly important part of the drinks industry’s channel & route-to-market strategy, brands are becoming more adept at experimenting with and investing in online spaces. NFTs and the metaverse, although still quite experimental and surrounded by shifting regulations, are an extension of this. If leveraged effectively, they could introduce some brands to new ways of selling, as well as new ways of engaging with consumers.
If you are an IWSR client, more NFT use cases and brand examples are featured in the IWSR Radius Innovation Trend Radar.
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