NFTs Enter the Wine and Spirits Marketplace
Photo by Kelsey Knight on Unsplash
The new “flex” is no longer a Birkin or an expensive luxury car. It takes the form of digital assets, which usually feature cartoonish depictions of animals. A Non-Fungible Token (NFT) is a non-interchangeable unit of data recorded on a digital ledger based on blockchain technology. An NFT can represent any digitisable item - products like photos, digital art, movies, and audio recordings have all been sold as an NFT.
Last year, it was estimated the NFT market had generated over $23 billion in trading volume, which means the market is no longer considered niche – it’s certainly mainstream. NFTs are now seen as a marketing opportunity; first we saw the high-end consumer brands like Dolce & Gabbana capitalise on the commercial opportunities, and then bigger household names like Taco Bell and Coca-Cola started to dip their toes in this relatively new market. Now, are we ready to welcome spirits and wine into the Ethereum phenomenon?
A Digital Marketplace
Wine giant, Penfolds, and spirits brand Glenfiddich have taken bold steps to join the world of NFTs. Both brands launched their editions of NFTs with the first NFT luxury spirits marketplace, BlockBar. Often only a limited number of bottles are produced with rare releases, so the high-end liquor market has always been exclusive, where the primary method of purchase was through an auction house. When a collector buys a bottle of liquor or wine, they must consider transportation and storage, both of which, like art storage, must be regulated to preserve the liquid in good condition.
BlockBar helps to make the rare spirits industry more approachable to users. When users purchase through the platform, the physical bottle will be kept in a secure location in Singapore, while the NFT will be held in the blockchain space. The buyer can get the bottle delivered directly to them within a week or have it stored in a location of their choice. On BlockBar, customers will have their own virtual bar and a digital wallet that tracks the performance of their portfolio.
Endless Possibilities
NFTs can now serve as proof of authenticity, verification of ownership, and right to redeem, allowing alcohol collectors and connoisseurs to build their own collections through NFTs. Investors can buy and sell NFTs of collectible spirits without ever owning or storing the bottles. The NFTs can also be split among investors, as happened with a barrel of Penfolds Magill Cellar 3 wine from vintage 2021 that was sold to a select group of investors for $130,000 in 12 seconds.
The NFTs can also provide various unique experiences, such as venue tours, special video content, and more. Brands can create more value with these digital tokens, and more individuals can engage with a spirits brand’s rare portfolio.
An example of this creativity would be Top Shelf International (TSI) which introduced their Australian Agave NFT. This unique opportunity offers each owner a membership to an exclusive program around the TSI Australian Agave project. Each NFT sold will be allocated ten plants, and as they mature, NFT owners will receive special updates on the progress of their plants through the use of industry-leading drone technology and personalised content.
What’s Next?
The hospitality industry was upended by the pandemic, but NFTs are changing the way we facilitate consumer experience across the board, allowing more users to engage with brands in unexpected ways.
We can anticipate that more spirits brands will look into weaving blockchain technology into their sales processes, but this has yet to be the tip of the iceberg. NFTs could allow more venues like bars to make their signature drinks and spirits accessible to a world impacted by the lack of travel and provide experiences to consumers unable to travel to their venues yet.
As the technology continues to develop, there will be more ways to show how spirits brands and even venues can utilise the technology in the future.
Accela Communications specialises in lifestyle clients, working with many brands in the wine and spirits space in all aspects of the marketing mix. Need help with an upcoming campaign? Let’s chat: [email protected].