The industry’s first dive into the nascent digital ecosystem

(Credit: Wendy

August 16, 2022 — After the initial craze of non-fungible tokens (NFTs) during the cryptocurrency bull market of 2021, food companies are now experimenting with the possibilities that this internet-based technology presents.

Food Ingredients First looks at the growing trend of using NFTs – a financial security made up of digital data stored on a blockchain, a form of distributed ledger – and how they are currently being used in the international food scene.

One of the creative ways NFTs are used is to offer exclusive discounts to customers. For example, companies can use them to extend their marketing to the existing metaverses – different virtual internet spaces.

An NFT cannot be exchanged as it is unique. To establish this uniqueness, all NFTs are recorded in the blockchain, with their owners also recorded in a digital receipt of sorts.

Non-fungible tokens are usually still images (as it is initially cheaper to create and mint them on the blockchain), but can be gifs or even videos.

Starbucks into the web3
During the Q3 2022 earnings call in August, Starbucks interim CEO Howard Schultz opened the door for Starbucks NFT collectibles to hit the company’s rewards programs in September.

“We believe this new digital Web3-enabled initiative will allow us to build on the current Starbucks Rewards engagement model with its powerful approach to earning stars, while introducing new ways to emotionally engage customers, expand our digital third-place community and offer a broader set of rewards, integrating our digital Starbucks Rewards ecosystem with Starbucks-branded digital collectibles as both a reward and a community-building element,” says Schultz.

The coffee chain says Web3 is an umbrella term for concepts such as decentralization, blockchain technologies and tokenomics – token-based economy.

“Many see NFTs as a new form of ownership of digital art, often traded in a highly speculative manner. While that has been true on some level in the early days of the space, we are fascinated by how NFT- is allows people to own a programmable, wearable digital asset, which also acts as an access pass,” the company explains.

“We believe NFTs have broad potential to create an extended, shared ownership model for loyalty, offering unique experiences, community building, storytelling and customer engagement,” the business highlights.

Starbucks revealed that it is not wedded to any blockchain of the many available. Still, it flagged that sustainability is a priority, which would leave out tokens based on proof-of-work technology (the banner of Bitcoin) and involves using energy to “mine” new tokens.

“We plan to take a step-by-step approach here, willing to move quickly, experiment, learn and collaborate. We plan to launch our first NFT gathering, membership and community later this year, based on coffee art and storytelling,” the business emphasizes.

Wendy’s pioneer in space
Wendyverse is what the fast food brand has called its virtual space set in Meta’s — the parent company of Facebook — metaverse “Horizon Worlds.” In April, the company initially launched a normal-looking digital restaurant in the space — except for the indoor basketball court — where it offered discounts to VR users who completed a few simple tasks.

In June, the business doubled down, building a Wendy’s Castle in the metaverse with visitors encouraged to “reach the top of Wendy’s Breakfast Castle while wobbly bacon bridges and flying biscuits await,” Wendy’s described.

To attract customers, the fast food chain offered a free breakfast sandwich to VR visitors.

Similarly, on Halloween last year, Chipotle offered 30,000 free burritos to visitors to its digital customers in the Roblox video game.

In addition, Wendy’s filed to trademark virtual products and services, tokens, collectibles (including NFTs), digital art and cards. Similar trademark registrations have been registered 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 profits were donated to the Taco Bell Foundation, which provided the money “to empower youth to discover and pursue their career and educational paths,” according to the company.

The company used Rarible, a market for NFTs, where it sold all its tokens in 30 minutes. Taco Bell sold each NFT for less than US$2, but continues to profit from the sale of tokens as it receives 0.01% of the revenue each time the NFT changes hands.

Although the number of transactions has generally been low, some of them reached just under USD 20,000, as confirmed in the blockchain by Food Ingredients First.

Taco Bell expressed that it “may release a second [set of NFTs] in the future”, however, over a year has passed and the business has not delved further into the possibilities 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 and issued their own NFTs.

So far, McDonald’s hasn’t delved much further into NFTs after the initial release, but some local divisions such as McDonald’s Italy have partnered with digital artists to launch sets of NFTs.

Burger King chose to follow a reward-based NFT strategy, where customers had to scan QR codes in their meal boxes to find a digital collectible; When four collectibles were found, it gave customers an NFT linked to prize rewards such as free meals.

Pizza Hut Canada created its NFTs, which included pizza recipes. This year, the pizza company launched a new set of NFTs that gave exclusive access to an AR-enabled cartoon.

Exclusivity is another trend for NFTs. To cite an example, Yes Plz, a coffee chain in Los Angeles, offers a coffee subscription to its members with an NFT; for every NFT you can get a bag of coffee at regular intervals.

NFTs coded with food recipes are also trendy, as a market for chefs who sell their recipes and earn royalties when they are resold has appeared on several websites and is based on various crypto-tokens.

Gaming culture is also connected to the metaverse, and Coca-Cola reveals “the first ever Coca-Cola flavor born in the metaverse in April”. With immersive experiences on the video game Fortnite, the brand also created its own AR mini-game and has its own sets of NFTs.

By Marc Cervera

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