August 16, 2022 — After the initial craze for non-fungible tokens (NFTs) during the 2021 cryptocurrency bull market, food companies are now experimenting with the opportunities offered by this internet-based technology.
FoodIngredientsFirst looks at the growing trend of using NFTs – financial security consisting of digital data stored in a blockchain, a form of distributed ledger – and how they are currently being applied in the international food scene.
One of the creative ways to use NFTs is to offer exclusive discounts to customers. For example, companies can use them to extend their marketing to existing metaverses – different Internet virtual spaces.
An NFT cannot be interchangeable because it is unique. To establish this uniqueness, all NFTs are recorded in the blockchain, with their owners also recorded in a sort of digital receipt.
Non-fungible tokens are usually still images (because it’s cheaper to create and mint them initially on the blockchain), but can be gifs or even videos.
Starbucks on the Web3
During August’s third quarter fiscal 2022 earnings call, Starbucks interim CEO Howard Schultz opened the door for Starbucks NFT collectibles to reach the company’s rewards programs in September. .
“We believe this new Web3-enabled digital initiative will allow us to build on Starbucks Rewards’ current engagement model with its powerful approach to spending to earn stars while introducing new methods of emotional customer engagement, expanding our third-party digital community and offering a broader set of rewards, integrating our Starbucks Rewards digital ecosystem with Starbucks-branded digital collectibles as both a reward and a community-building element,” says Schultz.
The coffee chain claims that Web3 is an umbrella term for concepts such as decentralization, blockchain technologies and tokenomics – token-based economy.
“Many people see NFTs as a new form of digital art ownership, often traded in a highly speculative way. While this was true on some level in the early space, we are fascinated by how NFTs allow people to own a programmable and customizable digital asset that doubles as an access pass,” the company explains.
“We believe NFTs have broad potential to create an expanded shared ownership model for loyalty, delivering unique experiences, building communities, storytelling and customer engagement,” the company points out.
Starbucks has revealed that he is not married to any of the many blockchains available. Still, he signaled that sustainability is a priority, which would leave out tokens based on proof-of-work technology (bannered by Bitcoin) and involve using energy to “mine” new tokens.
“We plan to take a phased approach here, ready to move fast, experiment, learn and collaborate. We plan to start with our first NFT collection, membership and community later this year, based on coffee art and storytelling,” the company points out.
Wendy’s pioneer in space
The Wendyverse is the name the fast food brand has given to its virtual space located in Meta’s – Facebook’s parent company – the “Horizon Worlds” metaverse. In April, the company initially launched a normal-looking digital restaurant in the space — excluding the indoor basketball court — where it offered discounts to VR users who performed certain simple tasks.
In June, activity doubled, building a Wendy’s Castle in the metaverse, with visitors encouraged to “reach the top of Wendy’s Breakfast Castle as tottering bacon bridges and flying cookies await”, a describes Wendy’s.
To attract customers, the fast food chain offered a free breakfast sandwich to VR visitors.
Similarly, on Halloween last year, Chipotle gave away 30,000 free burritos to visitors to its digital customers in the Roblox video game.
Additionally, Wendy’s has applied to branded virtual goods and services, tokens, collectibles (including NFTs), digital art, and cards. Similar trademark registrations have been filed by other major food chains such as McDonald’s, KFC, Taco Bell, Panera Bread and Panda Express.
Taco Bell, early adopter
In March 2021, Taco Bell released five NFTs selling them as collectibles in a set of five (NFTs are unique, but some have multiple copies). All proceeds were donated to the Taco Bell Foundation, which earmarked the money “to enable young people to discover and pursue their careers and educational journeys,” according to the company.
The company used Rarible, a marketplace for NFTs, where it sold all of its tokens within 30 minutes. Taco Bell sold each NFT for less than $2, but continues to profit from the token sale, as it gets 0.01% of the proceeds each time the NFT changes hands.
Although the amount of transactions was generally small, some of them reached just under 20,000 USD, as verified in the blockchain by FoodIngredientsFirst.
Taco Bell said it “could drop a second one [set of NFTs] in the future”, however, more than a year has passed and the company has not delved into the capabilities of NFTs.
McDonald’s, Burger King, Pizza Hut follow
During the NFT boom of 2021, McDonald’s Burger King and Pizza Hut jumped on the bandwagon, releasing their own NFTs.
So far, McDonald’s hasn’t delved into NFTs after the initial release, but some local branches like McDonald’s Italy have collaborated with digital artists to release sets of NFTs.
Burger King chose to follow a rewards-based NFT strategy, where customers had to scan QR codes in their meal boxes to find a digital collectible; once four collectibles were found, he gave customers an NFT tied to prize rewards like free meals.
Pizza Hut Canada created its NFTs, which included pizza recipes. This year, the pizzeria launched a new set of NFTs that offered exclusive access to an AR-enabled comic book.
Exclusivity is another NFT trend. To cite an example, Yes Plz, a coffee chain in Los Angeles, offers a coffee subscription to its members with an NFT; for each NFT, you can get a bag of coffee periodically.
NFTs encoded with food recipes are also trending as a marketplace for chefs selling their recipes and earning royalties when resold has emerged on multiple websites and is based on different crypto tokens.
Gaming culture is also tied to the Metaverse, with Coca-Cola unveiling “the first-ever Metaverse-born Coca-Cola flavor in April.” Hosting immersive experiences on the Fortnite video game, the brand has also created its own AR mini-game and has its own sets of NFTs.
By Marc Cervera
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