What can NFTs and cryptocurrency do for restaurants?
NFTs and cryptocurrency can do a lot for restaurants. They can help with marketing, loyalty programs, and even payments.
Introduction
You must have been hearing the buzzwords - NFTs (non-fungible tokens), cryptocurrency and blockchain for a while now. And the fever seems to have caught the restaurant and food service industry as well with giants like McDonalds and Papa Johns announcing their NFTs and entry into the Metaverse. So is it just a fad that is soon to fade out or is it something that's here to stay?
Well, it has clearly gone beyond the fad stage. From photographs of apes being sold for millions to the first-ever tweet going up for $2.9 million, NFTs have been generating massive headlines everyday that has constantly raised the interest. Now, several restaurant businesses, too, have started offering NFT-based experiences to their customers not only to ride the tide but also to attract younger customers. From McDonalds to Panera Bread, Taco Bell to Pizza Hut, several big league food chains have already hopped on the bandwagon. Should you too? Let us dig deeper.
What are NFTs and how do they work?
Non-fungible tokens are basically digital tokens, something that are not replaceable and are absolutely unique. These digital tokens can be of anything, from paintings to photographs, milestone moments to unique clips of a cooking technique or distinctive food experiences. You can get an NFT of an original work and be the sole owner of it. While there can be a number of copies, reprints and downloads of a recipe or an artwork, the original will still remain with you if you are the owner of that NFT. In non-NFT terms, if you have Napolean's soup bowl lying in your collection, you have all rights over it, no matter how many copies are being bought and sold in the market.
And how does the system work? Well, NFTs use the Ethereum blockchain. Ethereum is one of the most popular cryptocurrencies in the world much like Bitcoin. However, the Ethereum blockchain is now also being used for NFTs and most such tokens are being sold, bought and held through the Ethereum blockchain. The blockchain will act as a reserve of all the data related to your NFT purchase and ownership and keep it secured. This cannot be accessed by anyone else other than the owner. Although other users may view it as an asset that belongs to you, they cannot access it or tamper with it.
Who all are playing the NFT game in restaurant business?
All big brands are already into the NFT game in a bid to save themselves from the scope of copyright infringement and loss of trademark in the Metaverse where everything is on the blockchain, transactions will be through cryptocurrency and things will get a lot more complex over time. A Coca-Cola or a Starbucks wouldn't want to lose out their brand name in the Metaverse to a fake Coca-Cola that has already set shop using these popular names.
Apart from the security factor, another key driving force behind the NFT wave is the FOMO element. When hundreds of people line up outside the Apple stores for the launch of a new phone or when thousands of kids across the world squat outside bookstores for the new Harry Potter book, it is a massive promotional drive for the sellers. The same works for NFTs. Those on the outside want a piece of this new tech-driven asset while those already on the inside are going big on flexing.
From NFT-led food halls to investors using NFTs to buy shares of a restaurant brand, the game is only getting bigger and diverse with time. In March 2022, Papa Johns launched a series of NFTs as a marketing campaign for their new cheddar range of products. Chick'nCone, another fast food chain, launched its Chick'nCone coins, which is an NFT-driven royalties system. One can earn royalty points and franchise fee benefits with these coins to open new outlets of the chain, ultimately aiding Chick'nCone in expanding their business.
Moreover, brands are looking at the buzz around NFTs and Metaverse as an opportunity to do something unique and build brand awareness around that. Restaurateurs Spike Mendelsohn and Tom Colicchio recently launched their NFT project named CHFTY Pizzas. Their NFTs are images of pizza slices that had an initial pricing of 0.07 Ethereum. The company's website says its aim is to bridge the gap between the food and beverage community and the Metaverse. They launched a total of 2,777 NFTs at the start. Owners of these NFTs get exclusive rights to watch cooking demos with world famous chefs, events, buy kitchenware and more.
While this is the just the tip of the world of NFTs and Metaverse, we are nowhere near the guessing game of what all can be part of the NFT collection of the future.
Why should restaurant industry care about NFTs and crypto?
Going into the future, you as a business establishment, would want to have a presence in the Metaverse to sell virtual experiences, products and services or set up a virtual shop. You wouldn't want your restaurant name to already have an existence in the Metaverse. Thus, apart from the big players, small-time restaurants are now also looking to dip their toe in the NFT pool and get the early-bird upperhand.
Let's take the example of the food truck at the corner of your street, let us call it Mac's Truck, who makes amazing burgers and wraps and you are a frequent customer. They must be knowing you by your name and you could also be on their loyalty program, availing discounts and offers. Now, Mac's Truck has come up with 100 NFTs of their bestseller products and are giving these out as freebies to their patrons. However, there are only 100 of these. This will not only create a demand for these digital assets but also help your restaurant with sales while your loyal customers can hold onto to something that stands a chance to grow in value in the future.
What's to look forward?
Metaverse and Web3 are the new buzzwords in the tech sector and these will be gamechangers to watch out for. Every brand is already registering its presence in the Metaverse, which will be an immersive, virtual world full of new and engaging scope. It is being seen as the future that will define how we function in day-to-day lives. And if your business believes in futurism and having a social connection with an immersive, virtual reality-based experience at its core, you should start thinking about what can be your business's NFT!
