The concept of having access to marketing funds that support a well-developed beverage program is not new. For years, large national chains have worked with beverage alcohol suppliers to form partnerships that promote, educate, and optimize their beverage program. It has been that many smaller brands and independent operators are unaware of these opportunities and have not had a platform that allows them to implement a supplier-funded beverage program. But now that has changed.
What is a Beverage Marketing Program?
For many restaurants, beverage sales make up 25 to 30 percent of overall sales. According to Restaurant Informer, that percentage can rise to 40 to 50 percent in establishments with a beverage manager who “creates magic on the cocktail menu, cultivates a following in the community, builds a wine list that elevates the chef’s menu to new heights, and trains staff constantly on how to sell.” For instance, did you know that selling premium wine-by-the-glass can more than double wine profits—offering margins as high as 300 percent? Many restaurants are pouring 30 percent more than they did just 5 years ago.
So, just how do beverage marketing funds fit into this equation?
Beverage suppliers can activate marketing funds that are used for creating and promoting menus, training staff on products that elevate the experience and drive revenue, and many other ways that can bring new customers in the door and turn them into long term regulars. Once you’ve developed a beverage program to be proud of, it’s time to promote it.
How are Beverage Marketing Funds regulated?
Beverage marketing funds are not “free money.” Being a highly regulated industry, there are federal and state laws that play a part in how beverage marketing funds can be used and many of these regulations vary from state to state. In 2019, Congress provided $5 million in special funding to the Alcohol and Tobacco Tax and Trade Bureau (TTB) to increase enforcement and address the “lawless practices” in the alcohol industry. Together with state alcohol regulators, they investigate and penalize producers or distributors that offer illegal enticements as well as those that accept them.
According to Beverage Law, TTB is targeting small businesses such as family-owned companies that have been around for generations. This information illustrates the importance of knowing your state’s laws. By working with a third party agency that understands these laws, operators can maintain legal compliance while optimizing the use of beverage marketing funds.
Who is Eligible for Beverage Marketing Funds?
Beverage marketing funds are voluntary investments by alcohol suppliers to support the marketing, merchandising, and training of their brands in your restaurants. Working with PayBev and Tipzyy, that specializes in managing beverage marketing funds and staff education initiatives, can help find and develop these partnerships. If you’re just starting, having a professional on your side can help navigate the legal waters of beverage marketing funding and guide you to maximizing your beverage program’s potential.