Food and beverage industry bites into NFTs, but is it late to the party?

Nestle is also doling out NFTs, as are restaurants, cafes and alcohol brands, but will people dip into this growing digital platter?

On June 1, 2023, Nestle formally announced its entry into the world of NFTs, or non-fungible tokens. Through its brand Maggi, it launched three of its products – Maggi noodles, Maggi masala-ae-magic, and hot and sour sauce – on the metaverse for a gamified version wherein people in their virtual avatars can compete to win the “Golden Maggi NFT”.

The FMCG giant tied up with OneRare, a Delhi-based blockchain start-up that specialises in creating NFTs for the food and beverage (F&B) industry through collaborations with restaurants, celebrity chefs and food brands. Through its NFTs, Nestlé expects to bite into Web 3.0 to build loyalty, traction and a strong community of younger consumers. As a pre-launch campaign in March, the company ran a contest on the metaverse, which drew over 100,000 impressions on the OneRare website.

“Web 3.0 will increasingly become a natural extension of F&B brands’ marketing and outreach strategies,” says Supreet Raju, co-founder, OneRare. “In the next 8-10 years, F&B brands will announce their respective NFTs to reach out to their target consumer.”

Raju’s company is now firming up the launch of chef-entrepreneur Zorawar Kalra’s Farzi Café to release an NFT via a gamified version. People will be able to trade this NFT for a digital dish or in the offline world, for discounts on meals, exclusive access to the restaurant’s kitchen, or exclusive diner experience that would include sampling dishes that are in the testing phase.

OneRare, which received $2 million in seed funding in 2021 from angel investors and investment funds, currently caters to brands such as Cornitos, Papa John’s, Urban Platter, Massive Restaurants, and chefs like Reynold Poernomo, Jaimie van Heiji, Anthony Sarpong and Vicky Ratnani.

Though digital collectible card games are not a new trend, having been around since the 1990s, NFT gamification has picked up in the last two years, offering “play-to-earn opportunity for gamers” particularly in the areas of entertainment, art and fashion. Now, the F&B industry is also making inroads in this space.

“It’s time to look beyond Instagram and other forms of social media,” says Kalra, founder and managing director, Massive Restaurants.

Besides helping to build a loyalty base among consumers and target a younger audience, NFTs can also help the F&B industry to create online events that can be leveraged in the offline world. Plus, NFTs can be monetised.

According to a report by Polaris Market Research published in April 2023, the global F&B NFT market, currently valued at $538.58 million, is expected to grow at a compound annual growth rate (CAGR) of 16.5 per cent and generate revenue of $2,134.04 million by 2032.

In the last two years, brands such as Starbucks, McDonald’s, Burger King, Pizza Hut, KFC, Taco Bell and Coca-Cola have launched their NFTs. Taco Bell made news when it sold all its tokens in 30 minutes flat on Rarible, an NFT aggregator platform, on its debut in 2021. It reportedly sold each NFT for under $2 but continues to profit from the sale of the tokens since it gets a commission every time the NFT changes hands. It also doled out perks in the form of gift cards worth $500 each for the original owners of the NFTs.

Alcohol brands such as Glenfiddich, Hennessy and Bacardi, too, have NFTs that allow customers exclusive perks such as private distillery tours, wine-tasting events and discounts.

Things are clearly moving, but is the F&B sector late to the NFT party?

Reports have suggested that the initial rush of the NFT market has slowed down significantly since the last quarter of 2022 due to a slump in the crypto market and the global economy. NFT global sales, which stood upwards of $4.62 billion in January 2022, plunged to $1.21 billion in April 2022, shows CryptoSlam, an NFT data aggregator.

Two months ago, less than a year after dipping into NFTs, Meta’s Mark Zuckerberg announced that the company was “winding down digital collectibles (NFTs) for now to focus on other ways to support creators, people, and businesses”.

There are sceptical voices in India as well. Chef-entrepreneur Tarun Sibal, who runs Titlie, one of the more successful restaurants in Goa, says, “NFT is a new territory and I’m not sure how it will pan out for my industry.” He says until he’s sure about it, he’ll stick to building new brands the way he knows it – “table after table, drink after drink, plate after plate, and interaction after interaction”. Just two weeks ago, he launched KHI KHI, a bar, in Delhi, and intends to open a restaurant in Bengaluru before the end of the year.

Nestlé isn’t worried. The company says its debut into Web 3.0 gaming and blockchain technology is a strategic move. “Just like OTT platforms have seasons for some of their series, for us at Nestlé Web 3.0 is a series,” says Rajat Jain, head of Foods Business, Nestlé India. “In the first season, we bring the consumers together; in the second, we enhance the experience; and in the subsequent seasons, we continue to build a stronger community of our consumers from whom we take feedback and suggestions.” He adds that even the packaging of some of the products will undergo a change to include details of NFTs, etc.

Chef Saransh Goila agrees: “Brands have to stay invested in the long term and think of NFTs as a way of building customer loyalty and use it as a marketing vehicle. The monetisation will follow.” He adds that in the next two years, food brands will be able to make anywhere between $5,000 and $6,000 through NFTs. His NFT is planned to coincide with the launch of 100 Goila Butter Chicken outlets across India by the end of 2023 (currently, there are 6o).

The big question though is: Will the patrons also dip into the NFT platter?