NFTs are unique and digital, but are they good for the wine industry?

NFTs are unique and digital, but are they good for the wine industry?
NFTs are unique and digital, but are they good for the wine industry?

For the most part, non-fungible tokens, or NFTs, are just a new medium for existing content. Many of the intellectual property legal issues raised by NFTs are the same issues that content owners face in any medium, and especially the same issues that arise with every new technological innovation.

An NFT is a unique, one-of-a-kind digital resource. An NFT represents something else, in some cases something from the real world, such as artwork, images, music or other objects, and in other cases digital works.

As NFTs began somewhat as part of the wild wild west, many creators focused on the excitement of the new medium, without much regard for the ownership of the underlying content.

But like all new media and distribution channels, whether broadcast TV, cable TV, Internet, digital distribution, audio or digital books, social media and now NFTs, the essence of value lies in the CONTENT being distributed. And someone owns that content.

For brand owners in the wine industry, NFTs present risks and opportunities.

The primary risk is unauthorized persons misappropriating a winery’s trademarks. The early NFT rush saw FT creators taking all kinds of existing content and creating and selling NFTs. This may include trademarks, logos and other identifying content for a vineyard or grape producer. Trademark owners should monitor NFTs while monitoring media to ensure that their trademarks or copyrighted content are not being used in an infringing manner, or to imply an endorsement by another party where none has been given.

The opportunities in NFTs extend to the areas of authentication, brand awareness and additional sources of income.

An NFT can represent a trademark in itself. Because each NFT is unique, and only the owner or licensee of a trademark can legally use it, an NFT can serve as a very useful brand identifier to identify the source of goods and services, and as an authentication tool to combat counterfeiting.

NFT example: Luxury products

Luxury goods manufacturers and retailers can create different numbered NFTs associated with versions of their products and use NFTs to authenticate the goods. NFT can be integrated directly into the physical product through an RFID chip or a QR code. NFT is transferred to the buyer at the same time as the product.

Product manufacturers can provide an NFT Certificate of Authenticity (“COA”) when selling physical products. An art dealer’s NFT authentication certificate provided this:

“Our NFT Certificate of Authentication allows the COA of your physical artwork to live in your blockchain wallet as a non-fungible token, for not only safekeeping and digital permanence, but for the ability to own a smart contract form of COA. By Using revolutionary technology, this non-fungible token records the date of purchase, the artist’s name, the work’s title and medium, an image of the physical work, as well as the year of creation and where it was produced”.

Mondavi Winery collaborated with artist Clay Heaton to create a collection of limited edition wines in porcelain bottles and issued NFTs to authenticate the wine, to act against counterfeits. NFT buyers received a physical bottle of wine when purchasing NFT.

In addition, brands embrace NFTs as desirable assets in their own right that promote the brand and its activities.

NFT example: Taco Bell

Taco Bell created NFT artwork out of its tacos – “NFTacoBells” – which sold out in 30 minutes, some for over $3,000. The brand awareness program included a halo effect: proceeds from sales went to the Taco Bell Foundation and its scholarship programs.

See also  SHŌ Restaurant, San Francisco's first NFT membership-based club, will open in 2023

Dole Foods offered a set of NFTs designed by artist David Datuna. The 5-piece NFT set sold for more than $100,000, with funds going to Boys and Girls Clubs to fight food insecurity.

AMC Theaters issued more than 86,000 Spider Man NFTs to loyalty program members in conjunction with the release of the Spider-Man: No Way Home movie in late 2021. Some of the NFTs were traded for more than $1,000.

Norwegian Cruise Lines released a series of 6 NFTs featuring designs by the artist who designed the hull artwork for two of NCL’s newest ships. The starting bid price was set at $2,500; proceeds were to be donated to Teach For America. The auction winner will also receive a balcony cabin on one of the new ship’s inaugural voyages.

Marriott collaborated with three artists to create three different NFTs based on travel experiences for the Marriott Bonvoy travel loyalty program. They debuted their NFT program at the Art Basel art fair, where NFT winners also received 200,000 Marriot Bonvoy points.

Some brands tout NFTs for their value as a new revenue stream.

NFT example: Budweiser

Budweiser launched its The Heritage Collection NFTs in November 2021, including 1,936 unique digital beer can designs to commemorate the year Budweiser created its first can. 1,900 Core Heritage tokens were priced at $499. The other 36 were Gold Heritage tokens that went for $999 each. Everything was sold out in less than an hour.

Dolce & Gabbana launched an NFT collection during Venice Fashion Week that sold for nearly $5.7 million. Owners of the NFTs also received physical versions of the items represented, plus exclusive access to future D&G events.

See also  CubeMelt's NFT allows holders to unlock frozen assets

Nike acquired RTFKT, a major creator of digital sneakers and collectibles. The digital sneakers can be used in video games, and can also be linked to physical versions of a shoe. The project included a creative element, as virtual shoes could be digitally crossed with other virtual shoes to create original versions that could be turned into real shoes.

Adidas launched an NFT collection called Into the Metaverse, as a collaboration between Adidas Originals, GMoney, Bored Ape Yacht Club and PUNKS Comic. Adidas also bought a Bored Ape named Indigo Herz and dressed it in a custom Adidas-branded tracksuit. The project sold 30,000 NFTs for around 0.2 ETH, or around $765 each. The NFTs sold out within hours and Adidas made $22 million.

Metaverse and NFT provide brand owners, in the wine industry and elsewhere, with opportunities to expand their brand awareness and explore new revenue streams.

Leave a Reply

Your email address will not be published.