Liquor Brands Serve Up NFTs
Liquor has entered the crypto chat.
The spirits industry is not always first when it comes to adopting new technologies, in large part because of legal restrictions and a hesitancy to deploy tools that could be used by under-age drinkers. But the crypto wave has finally come for the spirits world, as brands experiment with digital tokens and other web3 tools.
While it’s far from widespread, more brands are releasing special bottlings linked with non-fungible tokens.
When it comes to liquor NFTs, a digital token linked to a physical, valuable bottle makes a lot more sense to consumers than digital art whose value is based on speculation and hype. Experts predict that as more consumers understand the “physical product equals a token” proposition, NFTs will take off within spirits fans and eventually hit the mainstream.
A variety of NFT use-cases, deployed within products or experiences that consumers are already familiar with, will help this space grow.
For example, single malt Scotch brand The Glenrothes released a limited-edition bottling that came with an NFT and digital art. The NFT serves as proof of ownership, which is useful (and increasingly necessary) in the secondary market, given the prevalence of forged spirits. That said, the Glenrothes NFT also represents a new take on the community rewards card; owners of this NFT are offered in-person exclusive experiences, as well as the opportunity to visit the distillery, which is closed to the public.
Special access, insider-only events, and limited-release art such as Lalique bottles and hand-made cases have long been part of the high-end spirits collector world. So while the NFT represents a new form of technology, what it offers is not really a new idea at all. As more collectors warm up to the idea of blockchain-enabled access, brands will get more bold and inventive with their digital offerings.
Brands such as Penfolds, Patron, Glenfiddich and The Dalmore have all recently released NFT-backed bottles that pair authentication with bottles. Typically, the distillery or an NFT-spirits exchange, like BlockBar, stores the bottle, which provides some protection for authentication claims.
If the bottle’s owner wants to drink the spirit, however, the NFT (and all of its assets and perks) are burned. Burning a bottle NFT is not necessarily a bad thing, as it increases the scarcity of the remaining bottles and it records the final price at which a particular bottle sold.
Some brands are using NFTs to sell intangible assets, as well as physical bottles. Budweiser, for example, is offering a three tier-NFT collection, where the most rare tokens allow users to attend a basketball game in-person with NBA star Dwayne Wade and receive autographed sneakers. Budweiser also launched “The Budverse Heritage Collection,” which like other popular digital art collections, features multiple kinds of Bud cans sporting variations of digital art. The digital collection of 1,936 cans is a nod to 1936, the year the Budweiser can debuted. “Each NFT is one of a kind and generated using archived photos, ads and designs from throughout Budweiser’s storied history,” the brand’s offering on OpenSea says.
Additionally, more brands are embracing crypto payments.
French wine merchants such as Vin Malin and upstart BTC Wine saw success by exchanging prized bottles for bitcoin last year. Selling premium liquid pegged to bitcoin prices presents a risk, to be sure, given crypto’s volatility. (It’s unclear how these experiments have fared or will be adjusted following this year’s multiple crypto crashes but BTC Wine is still offering bottles of Dom Perignon, Krug and other fine wines in exchange for crypto.)
Even as the crypto world wrestles with sell-offs and a tidal wave of negative press this year, some true believers, especially among established brands, remain. How the future of NFTs will play out remains to be seen, but as more marquee names, in spirits, fashion and consumer goods, launch digital assets, it’s likely that the space will start to get less choppy.
As drinks analytics firm IWSR notes, liquor’s embrace of e-commerce helped the industry during the pandemic lockdown phase. NFTs, in a way, represent a new version of e-commerce, and one that offers direct engagement with consumers. “NFTs and the metaverse, although still quite experimental and surrounded by shifting regulations, are an extension of [e-commerce],” IWSR notes. “If leveraged effectively, they could introduce some brands to new ways of selling, as well as new ways of engaging with consumers.”
