2022 TRENDSETTERS
Talking tech : How NFTs can influence FMCG
Many wonder about the practical purposes of the ubertrendy non-fungible tokens but some say they will soon prove invaluable .
Last year saw the rise of Non- Fungible Tokens ( NFTs ), unique digital assets that first gained traction in the art and music worlds but soon made their way to retail and FMCG . The NFT market is now worth more than US $ 7 billion ($ 9.9 billion ), JPMorgan says .
In November , premium wine brand Penfolds partnered with an NFT marketplace for luxury alcohol products , BlockBar , to launch its first limited-edition NFT product , tied to an upcoming Magill Cellar 3 vintage .
New Zealand sauce and chutney business F . Whitlock & Sons collaborated with artist and social media star Campbell Walker , AKA Struthless , to create an NFT digital artwork inspired by the brand ’ s creative campaign , Whitlock ’ s Tales of Delicious Demise .
Australian non-dairy milk brand Inside Out also got in on the action , commissioning seven pieces of artwork ( two pictured ) by artists Sandra Cipriotti and Eryn Leggatt , that will be minted into a limited number of exclusive NFTs .
Inside Out founder Anthony Tuong said it was a personal interest in tech and blockchain technology that prompted the move .
“ The evolution of the mobile internet into Web 3.0 is a fascinating topic to me because I really think we ’ re at this inflexion point where technology is being conceptualised , adopted , and implemented at such a rapid pace and fits so seamlessly into our lives . I just want to do my best to get ahead of the curve ,” Tuong told Inside FMCG .
“ With NFTs specifically , they are viewed as these gimmicky JPEGS or GIFs but this is a misconception of its actual utility . Just as we have progressed our tech from clunky computers , to the dial up internet , to wifi , to the smartphone and mobile internet , there ’ s something around the corner that is going to be integrated and weaved into our lives without even really knowing how it happened .”
Tuong is using NFTs to help the brand remain relevant and future-facing , and is hopeful that the artwork can help express business ’ personality and values .
“ We commissioned local artists who understood the fabric of Inside Out and we asked them to create pieces that showed a different aspect of Inside Out ’ s personality and values . Once we are happy with the message that is being conveyed with the image , we mint them on the blockchain , and from that point the authenticity is impregnable and cannot be challenged . If someone tried to replicate or steal anything we ’ ve done , you would be able to see that the original source was us ,” he said .
While Tuong is reluctant to get involved in selling NFTs , he believes they offer strong potential in the promotional and supply-chain activities of FMCG products .
“ I believe the role NFTs or blockchain can play in the supply chain is seismic ,” he said . “ With this technology , there is the ability to trace every little transaction along the supply chain with the end consumer knowing , without any doubt , the origin and source of their food .
“ If we use almond milk as an example , it is very possible that one day you will be able to scan the bottle you are drinking and see exactly how it got to you , when and where those almonds were harvested , what type of almonds they are , when they were turned into milk , which retailer ordered and bought it , and how it finally got into your fridge or pantry .”
Premium brands benefit most Business futurist Gihan Perera described the consumers of NFTs as “ collectors ” and said they value “ ownership , authenticity , and the status and prestige of the brands they buy ”.
He expects premium brands , like Penfolds , to benefit the most from NFTs .
“ Somebody buying a Fendi , Cartier , or
Tiffany is buying more than the product – they are buying the status and prestige that goes with the brand . They won ’ t even buy the Bali knock-off version because they would know they don ’ t have the real thing ,” he said .
There are some concerns around the environmental aspect of NFTs , Perera said .
“ One of the biggest criticisms of NFTs is about their carbon footprint , because they rely on blockchain technology , which requires huge amounts of electricity ,” he explained . “ On the other hand , you could argue high-end luxury brands ( and their customers ) already have a disproportionately high carbon footprint .”
While he said NFTs are “ novel and quirky ” right now , and that alone is driving consumer interest , it ’ s still early days .
“ Even those who have started using them don ’ t know their long-term value ,” he said .
Tuong ’ s advice for FMCG brands is to “ have fun with it and be prepared if or when it becomes central to how our industries function ”.
“ We need to keep an open mind as the adoption of tech in the world around us will not and does not wait for us to catch up ,” he said . t