Blockchain is going to do more than manage your finances. It’s can also save money on drinks. It’s time to get familiar with Hooch, a subscription-based app for iPhone and Android. For $9.99 a month, users enjoy a free drink every night of the week from participating bars and restaurants, who can update their offerings in real time at their discretion.
That averages out to about 33 cents per drink. Not a bad deal, but Hooch offers even more ways to save money.
A new feature, Tap by Hooch, is a universal rewards program. Anytime you spend on your credit card, you’ll earn back cryptocurrency tokens that can be used at more than 100,000 businesses and experiences worldwide, ranging from Coachella to a showing of Hamilton on Broadway.
A blockchain infrastructure allows users to retain privacy while both controlling and monetizing their purchase data. In return, brands can directly engage with the consumer in micro-campaigns. Users get paid in Tap Coin, which can then be redeemed later.
“The companies, with of course your permission, accrue data, such as your credit card purchase history, so they can understand what you like why — and use their products and experiences to market to you directly,” says Hooch Vice President of Business Development Kevin Spector.
Or in simple terms: consumers will receive information and promotions for products and services that might actually have value and legitimately capture their interest. “We cut out the publisher and middleman and have a one-to-one advertising market,” Spector explains.
Hooch is currently available in 10 cities, including New York, Austin and Los Angeles with Hong Hong the first international market. The service is rapidly expanding throughout the United States and will reach Europe, South America and other parts of Asia by the first quarter of 2020.
Since the data is all based in blockchain, both sides of the equation are protected. It’s a new model that disrupts traditional advertising methods.
“Right now, when companies put an ad on Facebook, there’s a one-in-one-thousand click-through rate, which is extremely low,” explains Spector. “If you have a brick-and-mortar store and a thousand people walk in it — and 999 walk out — you’d be out of business. However, with blockchain, in our small case studies, we’ve found you can target so succinctly, there’s a 60 percent conversion rate. You’re targeting people based on their preferences and actual purchase history.”
The concept of Hooch as a company began with the realization that millennials drive an access-driven economy. “Things have changed,” says Spector. “It’s not about getting away from it all. It’s about getting into it all. How can you enable access and aspiration? That’s the universal language that millennials speak now.”
Drinks served at bars, restaurants and hotels are high markup products with low costs, making the food and beverage industry a natural fit for Hooch to get its feet wet.
In simple terms, the service is a gateway experience that can ease a user into the world of blockchain and cryptocurrency, which can often be confusing and complicated to the average person.
“A lot of cryptos are trying to replace the dollar. We’re not trying to do that,” says Spector. “Even if it does happen, it won’t be overnight. We want you to spend on your credit card. This is a rewards-based blockchain program and we want to associate with the way you currently live your life. It just happens to be blockchain based.”
If you want to take advantage of the rewards program, a credit card is required, which may not appeal to hardcore blockchain supporters who envision a new decentralized global economy that doesn’t use currency dependent on government regulation. But Hooch is a model that not only works in today’s economy, but can be adapted for any changes the future might bring.
“Because the crypto market got flooded with a lot of questionable investments and companies, we focus on the Hooch platform itself accruing a significant number of users throughout the United States and the world. So we actually have a true existing platform to use this digital token on.”
The established forms of credit and commerce serve as an entry ramp to the cryptocurrency world. It’s a natural easy step for both customers and businesses. The bars, restaurants and other vendors selling drinks via Hooch don’t need to understand blockchain. They just need to understand brand loyalty and incentivizing.
“I can explain this to my mom and she gets it,” says Spector.
Hooch has grown quickly since it was first launched in 2015. Led by CEO Lin Dai, the company won the Anheuser-Busch/InBev startup competition at South by Southwest and was a finalist in Richard Branson’s Extreme Tech Challenge.
Hooch now has more than 200,000 users to take advantage of those 100,000 business and experience partners around the world. Over the course of time, investors started taking notice. Warner Music Group has a stake in the company. Celebrity partners include Shaun White and Rosario Dawson.
The success of Hooch represents just a taste of how blockchain can be incorporated into the food and beverage world. David Klemt of nightclub.com is an industry observer who wouldn’t be surprised to eventually see bitcoin and cryptocurrency widely accepted at bars and restaurants.
“From what I understand, the average fee for processing on the merchant side is one percent or less,” he says. “So it’s already more attractive than American Express or Visa.”
The food and beverage industry can also set an example and be a model for how a blockchain system can work in the mainstream economy. “There is a future,” Klemt continues. “But it’s not going to be much of a future if restaurants, nightclubs and bar hoppers decide they’re not going to do this. If the vast majority turn their back on crypto, it’s not going to kill crypto, but it’s not going to be the next big thing.”
While Hooch uses blockchain technology to work within the current system, Spector doesn’t rule out a future version of the app that will offer rewards based on cryptocurrency spending.
“Clearly. of course, as we all believe, that’s the direction things are going,” says Spector. “We just don’t see a need to replace that yet. If it happens, it happens. Without a doubt we’ll be going in that direction as people become more and more comfortable with it.”