Dictador Rum, the Colombian-based rum producer, was among the first beverage companies to integrate NFTs (Non-Fungible Tokens) into their spirit offerings.
NFTs are interchangeable units of data stored on a blockchain or digital ledger. NFTs can be used to store and transmit digital files of material that can be readily digitized like photos, videos, visual works of art or audio files. They can also be used to document the chain of title associated with a particular item.
Recently, Dictador Rum announced that it is launching the first “closed community of high-net-worth individuals, investors and like-minded luxury consumers which is powered by NFTs.”
According to the company:
The entry pass to this unique and pioneering Treasury Club is via unusual and unique works of art created by the world-famous contemporary street-art artist Mariusz Waras aka M-city (his artistic pseudonym) in cooperation with Dictador.
We have collaborated in the preparation of 20,000 exceptional NFTs, which depict maps of cities and districts all around the world each on the surface of a Dictador bottle. The project shows the topography of these places in a way that reflects the individual style and fascination for the urbanism of Waras.
Each NFT is unique and collectible as a work of art, but it also authorizes investors to profit from the benefits of the Treasure Club. It is a great opportunity for HNWI, tech-savvy, spirits interested and art interested individuals and enthusiasts who are looking for distinctive and unique projects and collectible initiatives.
Starting on May 30, 2022, Dictador will allow consumers “to join one of the world’s first-ever luxury spirit organizations, ArtHouse Spirits DAO – a decentralized autonomous organization, where all members have an impact on the DAO community.”
Joining this Treasury club will allow consumers to acquire:
An exceptional city NFTs, a welcome gift pack worth $300, access to networking and tutorial events, treasury participation in the form of fractional ownership of unique rum inventory and other yet unspecified benefits from the brand.
According to Dictador, a total of 20,000 membership NFTs will be sold for a one-time membership fee of $1,000/person. Once these are sold, no further memberships will be made available. Members will have the opportunity to be part of a closed community on Discord, where they can exchange ideas and their NFTs, meet at real-life events, be educated about interesting investment opportunities, and network with world-class experts, VIPs, and CEOs.
Are NFT-based “clubs” the next evolution of how beverage companies will use NFTs? To find out I sat down with Ken Greer, (KG) formerly Brand Director and later Creative Director of The Macallan Distillers, and currently a consultant to Dictador Rum, one of Colombia’s oldest rum brands.
JM: NFTs have become an important way of authenticating the chain of title of rare and collectible spirits. This chain of title, however, is only preserved while the spirit is in the hands of an independent third-party storage facility. What will it take for the chain of title to permanently attach to a bottle regardless of where that bottle is kept?
KG: This is a longer-term issue. We feel that Dictador with BlockBar has been a leader in this field. The reason that it is important that the authorized bottle NFT, supplied directly by Dictador to BlockBar, is linked to a real bottle in a secure facility is to entirely preserve the integrity of the offering. Without the product being in BlockBar’s warehouse they cannot guarantee its authenticity.
Whilst blockchain will help to some degree in identifying the chain purchasers and we equip the bottles with anti-counterfeit labeling and closure features, both overt and covert, this still doesn’t 100% get around the issue of someone potentially consuming the liquid and then infilling with counterfeit liquid if the bottle is allowed to reside outside our secure facility.
JM: NFTs of unique digital art associated with spirits brands have become a common feature of spirit-related NFT offerings. How popular are such offerings among consumers? Is there any evidence that the NFT will have long-term economic value if the addition of an NFT enhances the value of the spirit associated with it?
KG: By observing the industry and engaging with clients and high-end spirits collectors, we know that a traditional, non-digital offering is simply not enough to compete in today’s world. We are answering a market need and staying ahead of the curve. We are living in a dynamic reality – technology shifts by the minute and we want to make sure that as the world moves forward, we are positively leading change.
This strategy also lends itself perfectly to the growth and increase in popularity of the metaverse. We are putting a product into the physical world that is also adaptable to the digital world. As consumers more frequently wish to partake in a free arena where they can interact with others, enjoy astounding new experiences, and sample the privileges of an enhanced second life, we are ensuring that we have a stake in that space too.
Dictador has supporting evidence for the potential increase in value of NFTs, albeit this segment is in its infancy. As the leading art house spirit, we have achieved record sales prices for collectible rum by tying in an aesthetically beautiful offering with our products.
The Dictador Generations in Lalique decanters were selling for 15k € a bottle but combined with the digital art piece as an NFT they were achieving a price of $25k and on resale were hitting prices of up to $36k, within days.
Similarly, one of the Richard Orlinski hand-painted bottles with digital art NFT achieved a price of $100k at Art Basel last year, setting a new world record for the price of a bottle of rum.
This will only become more important given the growing importance of digital art collecting, particularly within the Generation X and Z consumer segments as they become more affluent. The relentless growth of interest in and value of the cryptocurrency market will also encourage many individuals to crystallize gains via investment in NFT opportunities, particularly art or art + physical items.
JM: Adding ongoing releases of NFTs to consumer clubs sponsored by distilleries and wineries is becoming more popular. Is this the next evolution of how the spirits industry uses NFTs to promote sales? What is Dictador planning in this regard?
KG: We’ve been laying the groundwork for our NFT collaboration for some time now so when the NFT trend increased in popularity, this was our moment to connect with the most tech-savvy and aligned partner, BlockBar. Together we are at the leading edge of creating a new category and pioneering an untapped market where spirits and technology are one.
Dictador was one of the first brands to offer access to a tangible asset with an NFT investment. We did this by storing the physical bottle that corresponds to the NFT in a warehouse in Singapore. Access to a physical asset backing up an NFT investment offers a much more secure proposition than most conventional NFTs.
We believe that the NFT market from now on will become an important market channel as the metaverse plays an increasing role in consumers’ lives in the future. Dictador is intrinsically bonded to this space as we continue to craft our incredibly collectible rums for collectors and investors. We look forward to continuing to build relationships with renowned, global artists and collaborating to offer something special, including carefully tailored offerings targeted at art lovers, rum collectors, and tech-savvy consumers.
JM: How are you planning to integrate NFTs with your existing client base, especially those interested in rare and collectible/investment grade rums?
KG: Our upcoming project offers DAO membership. Effectively this is an internet community, enabled by Dictador, which pulls capital together in the form of Treasury club stock comprising unique Dictador investment-grade bottles and casks.
To access this club, consumers pay $1,000 and for this, they get an extraordinary and beautiful one of a kind NFT digital artwork of a bottle relief depicting a city/city district (executed in line with an idea by famous street artist M-City) e.g., a Paris arrondissement, a New York borough or even a whole city like Cannes, which has the potential to increase in value in its own right.
In addition, they will be granted c. $300 of extra value benefits (all or part in liquid or product value) and potentially privileged access for a chance to buy special editions to unique education and networking groups hosted by investment-grade spirits, NFT and crypto experts.
On top of this is fractional ownership of the DAO Treasury which contains a fabulous array of investable Dictador limited edition bottles and rare rum casks, which again has the possibility of growing in value through time. The NFT and treasury ownership are intrinsically linked to the membership.
This offers a unique opportunity to access this incredible world of new possibilities, proving that this traditional, often conservative and hermetic world of high-end, rare, extra old, dark spirits, can successfully merge with new technology with great success.
JM: NFTs are predominantly visual or auditory. How practical are they, beyond serving as a blockchain-enabled means of authenticating a chain of title, for selling a consumable like a spirit?
KG: They are highly practical as they give real access to purchases in the crypto space but also we are happy to direct consumers towards trading platforms that enable them to benefit from our NFT offers. This may also allow a broader range of consumers to engage with cryptocurrency and the digital artwork collecting space. As cryptocurrency becomes more commonly used globally and as the digital art market grows this can only be a benefit to the spirits, art and crypto markets.
JM: Any chance that Dictador will offer a digital audio NFT associated with the rum brand? What form might an audio NFT take?
KG: It’s not in our current plans to do this but never say never as the ability to commission a specific piece or to present a segment or complete composition as an artifact could be something for the future.
JM: Thank you.