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Daily news and analysis about the food tech revolution

NFT

As Bored & Hungry Shuts Its Doors, It’s Worth Looking at State of Web3 and Food


In March 2022, NFT and crypto investor Andy Nguyen purchased Bored Ape #6184 along with three Mutant Apes and soon decided to establish a Bored Ape-themed restaurant named Bored & Hungry. The restaurant opened its doors on April 9, and by the end of its first day, it had served 1,500 burgers and had lines stretching around the block.

Two years later, Bored & Hungry has closed.

Last week, Nguyen announced on Instagram that the restaurant’s original location in Long Beach, California, was closing. He shared that they had sold the concept to a franchising company from Asia known as HUNGRY Dao.

From his post:

“Happy 2 year anniversary @JustBorednHungry!Today we say goodbye to the original Bored & Hungry location in Long Beach, CA. We also want to congratulate our partner’s from Asia, Hungry Dao – a branding and franchising company who has acquired the brand from us. It’s been an insane 2 years, that was originally supposed to just be a 3 month pop up experiment.”

While Bored & Hungry was perhaps the most high-profile effort to bring the world of Web3 to food, it was far from alone. Since the NFT trend burst into public consciousness in 2021, numerous early-adopting restaurant operators, crypto-curious chefs, and FOMO-driven corporations have launched initiatives to connect their food businesses with Web3 elements. Nowadays, most of these ventures—like Bored & Hungry’s U.S. location—have either shut down or scaled back.

A few examples:

Starbucks recently announced that it’s shutting down its Web3 loyalty program, Odyssey. According to an FAQ about the program’s transition, Starbucks said the community would close the Odyssey beta on March 31, 2024, and users had until March 25, 2024, to complete any remaining Journeys. The lead for Odyssey, Steve Kaczynski, was let go as part of the move.

In March 2022, celebrity chefs Tom Colicchio and Spike Mendelsohn launched the CHFTY Pizza NFT project, promising holders access to virtual and in-person events, classes, kitchen accessories, and more. Today, the CHFTY website is inactive, and the project’s Discord channel has been quiet for the past year.

Even some housewares brands dipped their toes into this trend, though their efforts were minor and did not gain traction. Old-school home appliance brand Crockpot released an NFT commemorating its 50th anniversary. The NFT, still available on Opensea, has not received any offers.

Web3 initiatives like Dinner Dao and Burger Dao have largely been abandoned. At the same time, FriesDAO, a group that raised $5 million via an NFT offering, suffered a lethal blow when hackers made away with most of the group’s cash.

Yet, not all Web3 food ventures have failed. The coffee subscription site Bored Breakfast Club continues to operate. Flyfish, a high-profile NFT membership dining club, is set to open this summer, albeit offering a traditional non-NFT membership option. Additionally, Blackbird, the NFT loyalty program started by Eater and Resy founder Ben Leventhal, recently launched a breakfast club and sold out within hours.

So, with the dust of the first Web3 wave now settled, where does that leave us? Was the enthusiasm for food & Web3 more hype than substance? Or is the persistence of a hearty few continuing to march forward a sign of long-term viability for this space?

At this point, it’s too early to tell. Those who realized early on that Web3 and blockchain were a means to an end to enhance consumer-side benefits may have staying power. The same goes for those who realized they can’t require significant behavior change on the part of consumers regarding onboarding. Blackbird is a good example of both here. Others, like Flyfish, have demonstrated that they can make the necessary pivots to survive.

But big brands like Starbucks? They may take a while to come back. The Seattle-based coffee company arguably still has the leading loyalty program in the food business, and the fact company management decided they didn’t need to push any further into Web3 is a pretty good indication of whether they believe it’s required to unlock significant consumer value. Clearly, at this point, they don’t.

Some, however, like Wow Bao, realize this is a long-term waiting game. As company CEO Geoff Alexander told me this week, describing his company’s entry into the Metaverse, “Anything that you do new and technology takes time for adoption.”

He’s right that things take time. And if he’s right about the Metaverse, companies like his that stick it out for the long haul might benefit most.

At this point, though, nothing is a sure thing when it comes to Web3 and food.

With a Summer Opening In Sight, Flyfish Club Now Letting New Members Join in the Old-School Non-NFT Way

Remember Flyfish Club, the Gary Vaynerchuck-affiliated dining club that made news when it announced it was planning to build the world’s first NFT restaurant?

While you may not, the restaurant industry sure does. After the group raised an impressive $14 million in just weeks by selling tiered memberships via NFT, it seemed everyone started wondering, ‘Could it really be this easy?’ (Editor spoiler: For others, it was not that easy. Copycats proliferated, but none matched the success of Flyfish).

Since the group’s launch over two years ago, Flyfish has been mostly quiet, holding the occasional get-together and trickling out updates. Because of this relative quiet, members were naturally excited last week when Flyfish teased on its Discord that an announcement would be coming on April 5th. And, as it turns out, it was a pretty big announcement.

The group showed off what Gary Vaynerchuk described as a first look at the restaurant, calling the images photos even though some of the images—including the sushi chef—were clearly computer renderings. The renderings looked a lot like almost every Vegas restaurant or lounge I’ve ever been in.

More importantly, though, the announcement provided many more details about membership specifics, some of which the early members found frustrating.

One of those details, which can be seen in this Q&A PDF, is the group has made a fairly significant shift in its approach by letting folks purchase memberships in an old-school, non-Blockchain way. According to Flyfish, prospective members can purchase memberships by paying a one-time entrance fee of $1,500 (no crypto needed) and an annual membership fee of $3,500 ($4,000 if you want membership for yourself and a partner).

Another detail that caused some to bristle was the annual membership fee of $500 for “Blockchain” members (meaning members who entered through buying an NFT). As one Twitter user complained, “The mint was ~$8k in eth at the time, +2yrs of waiting and now we have to pay $500/year to get comp’d $500 in expensive food/drinks. Should be 2-3x that per year to make early backers feel whole.”

My guess is the group decided to become more flexible with membership options because the cost of constructing and operating a restaurant in New York City, as well as paying operating salaries to what is essentially a startup in the Flyfish Club team, is incredibly expensive. It’s also a recognition that while NFT membership is a cool idea that no doubt appeals to the Gary V community, most high-rollers in NYC who usually would pay for a dining club are probably not big NFT enthusiasts. While this will undoubtedly take some of the shine of exclusivity that appealed to the crypto in-crowd when it was first announced, I’m guessing that keeping the restaurant solvent is probably a good long-term thing.

Not all the new details were bummers. One new benefit Flyfish announced is partners are now included. While initially, the blockchain memberships meant only the holder was a member, now they say spouses or partners are also included as members. The group also detailed how membership gave members priority reservation access to other VCR Group (the holding group for Flyfish Club) restaurants.

Of course, none of this actually includes food if you are a non-Blockchain member. After these members pay their dues, no food is included. In other words, it’s pretty much the same as every other dining or country club. It’s mostly the same for blockchain members, though Flyfish will apply their $500 membership as a credit towards meals purchased at the club. Beyond that, though, they’re paying for every meal.

We’ll be in NYC this summer, so hopefully, we’ll be able to get a sneak peek. If one of our readers gets a chance to visit the Flyfish Club, drop us a line (with actual photos) and let us know what you think.

The Food Tech News Show: Behold, The Humanoid Kitchen Robot is Here

This week, the Spoon crew got together to discuss some of the big stories of the week on a new weekly video news show we’re launching called The Food Tech News Show.

The stories Carlos Rodela and I discuss include:

You can watch the full show below, on YouTube, or listen to it on the Spoon podcast.

And, if you’d like to watch next week’s Food Tech News Show, join us on March 22nd at 1 Pacific on Streamyard, Twitter, or on our YouTube channel.

Cordless Kitchens? - FTNS

Not Surprisingly, Starbucks Is Shutting Down Its NFT Program

Perhaps not all that surprising given the downturn in interest in Web3 and NFTs among big brands, Starbucks announced today that it’s shutting down its Web3 loyalty program Odyssey.

The Odyssey program allowed members to gain benefits through playing games and participating in activities called Journeys. When they completed Journeys, members earned points and received NFTs (called Journey Stamps) that gave them access to exclusive benefits. Members could also purchase limited edition NFTs, which provided them with additional Odyssey points and unique artwork.

According to an FAQ about the program’s transition, Starbucks says they will close the Odyssey beta on March 31, 2024, and users will have until March 25, 2024, to complete any remaining Journeys. The company says it will transition the Odyssey marketplace to the Nifty NFT marketplace, where users can buy, sell, and transfer Odyssey stamps. As part of the move, the company said they are also shutting down the Odyssey discord server on March 18.

The effort was shepherded by the former Starbucks chief digital officer Adam Brotman through his company Forum3. Like many Web3 startups in the past 12 months, Brotman and his cofounder Andy Sacks have made a hard pivot from Web3 to generative AI as their primary focus, with their new tagline being “Where AI Meets Digital Transformation.”

Some crypto sites have asked whether the program will return, and while Starbucks left the door open in its FAQ with a bland stay-tuned message – “While the Starbucks Odyssey Beta program is ending, we are excited for you to see what comes next and are grateful for your consistent engagement and feedback” – my guess is the company likely will de-emphasize things like tradeable NFTs even if it looks to use some form of underlying blockchain architecture in the future.

Cow NFT Platform CattlePay Paves the Way for Direct Sales With Heartland Deal

The last time we checked in with Rob Jennings of CattleProof, he was getting his cattle NFT platform off the ground. The idea was to create a permanent record of the life of a cow that followed it along the supply chain so that current and prospective owners all the way to a restaurant down the line that purchased beef would have a record of age, genetics, ranch of origin and more.

The idea is an interesting one, not only because it helps create better transparency into the history of a head of cattle, but also because it opens the door to more efficient way for prospective buyers and sellers to do business. Nowadays, if someone wants to buy a head of cattle, a sales transaction typically involves using a sale barn, an auction marketplace that facilitates the sale between buyer and seller. All well and good, except the resulting transactoin can take a week to ten days to process and often involves marketplace fees and commissions that can reach up to 10% of the total transaction.

Instead of using this slow and costly process, Jennings wants to make buying and selling cows as seamless (and low-fee) as buying or selling a stock – or NFT – through a digital marketplace. To that end, his company CattleProof has done an integration with Heartland, a payment processing company to launch CattlePay, an electronic payment system that allows cattle owners to buy and sell cattle via credit and debit cards and ACH payments.

“The idea is how do you create a more direct buyer to consumer payment system, minus all the fees and blockchain payments?” said Jennings in a interview with The Spoon. “And then, how do you inch your way towards getting real time settlement? Because that’s the other big thing: how do I get my money now?”

According to Jennings, the bigger vision of not only creating a lower-cost way to buy and sell cattle, but to create a friction-free way for buyers and sellers to connect. This means creating something akin to an Openseas for cattle, but without the complexity of having crypto wallets and all of the other blockchain related tech that often intimidates and turns off the uninitiated and non-crypto-pilled among us. To get there, CattleProof system will handle all of the web3 in the background, and offering the benefits of a blockchain proof of record and transaction system to the cattle buyers.

“Our goal is to in order to get cattle producers to participate, there’s got to be a return on investment,” Jennings told The Spoon in a recent interview. “And part of that return on investment is trying to find them ways to reduce these middleman fees.”

Jennings says he expects that the CattleProof system to launch in the first quarter of 2024.

Ben Leventhal Discusses Raising $24M for Web3 Restaurant Loyalty Platform, Blackbird

This week, Blackbird, a startup building a Web3-powered restaurant loyalty platform, announced it had raised a $24 million Series A funding round led by a16z’s crypto team with participation from Amex Ventures and Bolt by QED, among others.

With the news, the company lifted the curtain around its platform and how it works. When customers arrive at a restaurant, they initiate membership by tapping their smartphone on Blackbird’s NFC reader. From there, Blackbird issues an NFT, which acts as an identity card that keeps track of the customer’s relationship with the restaurant. When a customer returns and taps with the NFC reader, it acts as a digital handshake that sends info associated with a customer’s membership to the restaurant, such as first and last name, address, and dining history.

In short, the platform is designed to work without burdening the customer or the restaurant with technical know-how. The Web3 technology works in the background, creating a wallet for customers to hold their NFTs and the $FLY tokens earned over time.

It’s clear from the announcement that the company is not leaning too heavily in branding itself as a Web3 company but instead emphasizing what founder Ben Leventhal sees as a friction-free, next-generation loyalty platform that helps smaller operators who may not have a significant technical staff or internal resources.

“Blackbird works very well if you couldn’t possibly care less about the blockchain,” Leventhal told The Spoon. “That’s crucial because the adoption of blockchain and the passion around the blockchain is rather specific and limited right now. And we need to create magic for all guests, regardless of how they think about tech, or if they think about tech at all.”

Still, while Leventhal and Blackbird aren’t emphasizing the platform’s Web3 underpinnings, there’s no doubt that much of the buzz around the company and the reason it was able to raise money from blue chips like Andreessen Horowitz in a challenging environment is precisely because it’s a web3 company; there’s a sense among investors and early partners that the company’s technology could, in some way, upend the traditional restaurant loyalty technology market.

I asked Leventhal how he thinks his company’s Web3 tech differentiates itself from what’s out there today. He pointed to a campaign his early trial partners ran this summer in partnership with Coinbase called the Summer Sweet Pass as part of Coinbase’s OnChain Summer.

“If you’re somebody who likes dessert, you have a sweet tooth, and you’re in New York in August, we curated eight restaurant desserts for you that you could, by virtue of having this pass in your Blackbird wallet, enjoy. I think that there are potentially several layers of community and connectivity that we can power for restaurants.”

It became clear during our conversation that Leventhal thinks his company can appeal to the passionate – but relatively small – community that wants to leverage blockchain and Web3 today to tap into experiences in the physical world while also helping restaurants build loyalty platforms that have more headroom to grow in the future while not putting any significant technical burden on their small staffs or the customer.

According to Leventhal, a low technical burden is especially crucial for smaller independent operators, the type of customer that Blackbird is targeting.

“We’re trying to focus on independent restaurants to help them level the playing field against some of these, you know, very, very serious competitors,” said Leventhal. “The average independent coffee shop is competing with Starbucks for their customers. The average independent restaurant competes with Sweetgreen and PF Chang’s for their customers. So they’re going to need some tools to do that effectively.”

This is Leventhal’s third restaurant industry startup. He founded the food media company Eater nearly two decades ago before selling it to Vox and started reservation tech company Resy in 2013 before selling it to American Express in 2019.

I asked Leventhal how things compare today to those previous eras.

“Twenty years ago, and the average restaurant is making ten to twelve percent margin,” said Leventhal. “Today, it’s three to four. So, we need to continue to think about what the future for restaurants looks like. And to me, a big part of the problem is not around the kind of reservations technology – that is now a pretty mature and robust area of technology – I think it’s about core connectivity to restaurants and guests and giving restaurants to make the most of their most loyal customers.”

Forum3 Announces $10M Seed Round On Heels of Launch of Starbucks’ Web3 Loyalty Beta

Today Forum3, a Seattle-based startup that helps companies build Web3-enabled loyalty programs, has announced it has raised a $10 million seed funding round. The company, co-founded by former Starbucks loyalty lead Adam Brotman and Seattle-based VC and ex-Microsoft exec Andy Sack, raised funding from Decasonic and included participation by Bloccelerate, Liberty City Ventures, and Arca, along with strategic investments from Polygon Ventures and Valor Siren Ventures.

The news comes a day after Starbucks launched the beta for Odyssey, the Web3-powered component of the Starbucks Rewards loyalty program. Odyssey allows members to gain benefits through playing games and participating in activities called Journeys. When they complete Journeys, members will earn points and get NFTs (called Journey Stamps) that give them access to exclusive benefits. In addition, members can purchase limited edition NFTs, which will provide them with additional Odyssey points and unique artwork. Some benefits that Odyssey members will have access to include exclusive events and early access to merchandise.

With the Starbucks deal, Forum3 co-CEO Brotman continues his long relationship with his former employer and fully embraces what has become his passion in Web3. Before founding Forum3, the coffee giant’s former Chief Digital Officer was hand-picked to be the CEO of Brightloom, a company that was re-spun as a digital loyalty platform company with a cash infusion from Starbucks. Over the past year plus, however, Brotman had made clear he was all-in on Web3, doing the rounds on podcasts, advising Starbucks on its entry into Web3, and forming a Web3 consultancy at Brightloom before starting his new company.

And to be honest, what Forum3 is now doing sounds a lot like what Brotman had started to build at Brightloom. Earlier this year, Brightloom had begun to put together its entry into the Web3 advisory services business but delayed the announcement until last month. According to Brightloom and Brotman’s Linkedin, he is still part-time chairman at Brightloom, or at least was until this week. My guess is Brotman saw the opportunity to leverage his relationship with Starbucks and make their interest in building a Web3 loyalty program the launch point for a new startup.

Interestingly, this news comes a week after Brightloom launched a new Web3 spinout called Thred, which calls itself a search and discovery platform for NFTs. Thred is led by Ben Straley, former president and chief product officer of Brightloom.

These moves come when NFTs and the broader Web3 space have come down to earth during a general crypto downturn. Despite all of the recent pessimism, it appears that investors still have an appetite for new loyalty and discovery platforms built on top of blockchain technology.

Restaurant Tech News Pod: Web3 Restaurants, Sweetgreen Robots, Subway Smart Fridge

Last week I caught up with Expedite’s Kristen Hawley to talk about some of the recent happenings in the world of restaurant tech.

Some of the stories we talked about on this episode include:

And more! You can listen to the podcast below or find it on Apple Podcasts or wherever you get your podcasts.

Founder of Eater & Resy Launches Blackbird, a Web3 Loyalty Platform for Hospitality

Ben Leventhal is at it again.

The founder of Eater and Resy’s new startup is called Blackbird, which he describes as “a new loyalty, membership, and payments technology company.”

The company will work on building software products “that establishes and enhances connectivity between individual restaurants and their guests.” The company says they will use “a mix of web2 and web3 inventions to make it all work.”

The move by Leventhal isn’t all that surprising, in part because he’s struck gold twice already with good timing: first by recognizing the opportunity for hyperlocal food media and later through building a mobile-forward, Airbnb-integrated restaurant reservation platform in Resy.

As we wrote in August, the efforts by some to onboard restaurants onto web3 were having mixed results. The most high-profile web3 meets restaurant effort so far has been from that of Leventhal’s former Resy cofounder Gary Vaynerchuk, who generated lots of buzz early this year with its NFT restaurant concept. Vaynerchuk, not surprisingly, is participating in Blackbird’s just announced $11 million seed round.

Leventhal’s hint Blackbird will use both web3 and web2 technologies sounds like he doesn’t have any designs to be hard-core crypto purist (part of the problem for some of the earlier efforts), and instead recognizes the need to provide an approachable onramp to most in the industry. And to be sure, the best near-term bet for restaurants to baby-step into Web3 is through enhanced loyalty programs, particularly programs that reward restaurants’ true fans with utility-driven rewards that encourage even more business.

As we discussed last March with Brightloom’s Adam Brotman, it’s not just chains that could benefit; non-chain restaurants also could use an easy-to-use platform that gives them a modern way to build community and make their best customers feel special. For his part, Brotman and Brightloom are probably Blackbird’s most direct competition as a web3 loyalty platform products company, given Brightloom’s already been working with clients like WowBao to develop their web3 products, have been hiring web3 developers, and Brotman’s fascination with the topic himself.

Web3 & Bubble Tea: FriesDAO Closing In On First Restaurant Acquisition

FriesDAO is closing in on its first restaurant purchase.

The group, which managed to raise over $5 million via an initial token offering in the spring of 2022, has identified a boba tea/frozen yogurt store in New York City that it describes as an “absentee store (no daily owner operation needed).” The group says the location is currently profitable.

To make the deal even more interesting, the FriesDAO team says “a very popular NFT collection” has offered to give the group full support with possible partnership implications if the DAO chooses to brand a store with the NFT. In a post on Snapshot, FriesDAO explains that partnering up with the NFT collection (which they do not name) is attractive because, in part, any commercial revenue restrictions from the NFT license would be removed.

“This would potentially allow us to own the store directly, explore and set our own policies, increase community engagement through creative endeavors, and possibly start our own franchise.”

Over the past six months, the group has been sifting through various proposals with mixed success. In a previous announcement, FriesDAO disclosed they had been in discussions with an operator of a Jersey Mike’s franchise to buy its location, but the deal fell through once the operator backed out.

The DAO now looks like it’s found a purchase target. After getting nearly unanimous consent from backers via an online poll, the DAO is planning to send a Letter of Intent (LOI) today, FriesDAO advisor Bill Lee told The Spoon.

If the deal (which will cost about $165 thousand) goes through, I’ll be curious to learn which NFT collection the group has been in discussions with. The success of Bored & Hungry has shown that branding a restaurant with a popular NFT can add buzz and drive customer visits.

The group’s choice of a boba tea spot makes sense, since spin-up costs for new locations are likely to be much lower than that of a traditional fast food joint. Lower capex costs could help accelerate expansion should the DAO move forward with an NFT-branded franchise model.

SimulATE Spring Video Sessions: The Food Web3 Summit

Earlier this month, SimulATE Spring convened the leaders pioneering in food & web3. Now you can watch all the sessions here!

The second installment of the SimulATE event series, we explore how the world of web3 will impact restaurants, CPG, ag, community building, and more.

Subscribers to Spoon Plus can get access to all of the sessions below.

Fatburger Dropping 500 NFTs Good for a Free Burger on National Hamburger Day

Another burger joint has joined the NFT boom.

This time it’s Fatburger, who has partnered up with Supper Club, a Web3 focused food club, to create the burger chain’s first NFT drop.

Unlike some of the early moves by fast-food chains into NFTs, Fatburger is making it worth your while by adding some real-world utility to their token. Those who sign up early enough to get one of the 500 limited edition NFTs will get a coupon to redeem for a free Fatburger.

Unfortunately, however, to get access to the NFT and coupon they have to jump through a few technical hoops. From the release: Guests can access their specialty NFTs through their Solana blockchain wallet and will be able to redeem a coupon for a free Original Fatburger on their online purchase, starting June 1 through the end of the month. Once a user links their wallet to their browser, the Fatburger online ordering website will register if a user has an NFT in their Solana wallet and the coupon can be applied. Coupons will be redeemable once per NFT owner and will not include add-ons.

Maybe it’s no big deal for anyone who’s already fluent in NFTs and web3. I’m also sure there are enough Fatburger fanboys out there who will spend the time venturing into the world of web3 for the first time to learn how to install a wallet plugin on their browser, save their recovery phrase, and then connect to the Fatburger website to redeem the coupon.

But like we’ve said before (and others like Adam Brotman have been evangelizing), the consumer user experience needs to be much easier than it is now when it comes to using NFTs. My guess is it will get there- someday – where it will be as easy as tapping your phone or scanning a QR code to buy and use NFTs. Unfortunately, that point is definitely not now.

If you’d like to scoop up a Fatburger NFT on National Burger day, head on over to the Fatburger mint page early on May 28th.