Enliven Beverage Deal Podcast Episode #11
Adopting your first pouring rights agreement means converting your property to the winning beverage company’s equipment, products, signage, account teams, ordering and delivery processes, and more. If you are not prepared, it can be a challenge to keep all of the pieces straight.
Listen as Michael Kuhn, Enliven’s Director of Account Services, shares three insights to help you navigate the conversion stage and handle the process with ease.
Listen on Your Favorite Podcast Player:
Related Resources:
How Beverage Deals Help Small Businesses & Concessionaires
3 Reasons Beverage Companies Want to Partner with Airports
Philadelphia International Airport Thanks Essential Workers – Enabled by Pouring Rights
Transcript:
Tim Harms:
Welcome to the Enliven Beverage Deal Podcast, where we’re all about saving and making you money by taking both the guesswork and the legwork out of your beverage partnership, and by leveling the playing field when it comes to negotiating your beverage contracts. I’m your host, Tim Harms. We’ve got a great show for you today. Stay tuned.
Tim Harms:
Well, today we have Michael Kuhn on the podcast. He is Enliven’s Director of Account Services. He’s just a great addition to our team, brings the energy every day. I’m so excited that he’s on. Michael, how are you?
Michael Kuhn:
I’m doing great. How are you, Tim?
Tim Harms:
Doing well. Hey, I got a question for you. Why are you famous?
Michael Kuhn:
I think I know what you’re getting at there. And this is not the only podcast that I appear on, so maybe you’re referring to the podcast that I run with my brothers all about the Cleveland Browns and the awful association I have had for my entire life as a fan of that team. We share in our misery together on a podcast just about every week during the football season.
Tim Harms:
That was not what I was referring to, but that is amazing as well. Everyone listening in should tune in. It’s called Sins of Our Fathers, right?
Michael Kuhn:
Yep.
Tim Harms:
And you actually, my favorite part, it’s you and your two brothers, and then every week, you invite in your grandfather to give his take on the major events.
Michael Kuhn:
He’s the star of this show. It’s really, the whole platform is an excuse to get our grandfather recorded and shared with the entire world. It’s a joy.
Tim Harms:
Well, I was referring to, actually, we have a past together.
Michael Kuhn:
Oh, oh. I do know what you’re referring to. We were both famous employees of Famous Dave’s Barbecue in Franklin, Tennessee.
Tim Harms:
That’s right. That’s actually how we first encountered each other. We were waiters together at the barbecue restaurant, and we had a little name tag that says, “Ask me why I’m famous.” And we had to come up with a reason why we were famous. So I guess now you can say that you are the award-winning star of the Sins of Our Father podcast.
Tim Harms:
But there’s actually another reason why you’re famous. You’ve come on as our Director of Account Services, serving all of our clients. But it occurred to me a little bit ago that there’s probably no one else in the world that has converted more airport accounts to a strategic beverage partnership, an agreement with one of the primary soft drink beverage providers. Probably no one who’s had more experience on the face of this earth than you in that endeavor. And we thought we would invite you on to walk us through a little bit of the process. I know it’s a complex process. We wanted to talk through maybe just a few tips, a few tricks, maybe some pitfalls that airport executives listening in could know to avoid or just know going into, here are some tips and tricks to help the airport conversion process when you’re adopting your first pouring rights beverage deal program. How do you get through it? What do you want to avoid? How do you make sure the process goes flawlessly?
Michael Kuhn:
Yeah, that’s a good point. There’s a lot of different moving parts and there’s a lot of things to think through and a lot of things to manage. So happy to dive in and provide a little bit of insight from what we’ve learned from the airports that we’ve had the pleasure of working with so far.
Tim Harms:
So you have, I think, identified three tips or tricks or just things to be aware of. Things that, candidly, if you don’t cover them, could blow up on you when it comes to converting an airport. Can you tell us about the first one?
Michael Kuhn:
Yeah. I would say the most important thing, as with almost anything, is communication. And to me, the communication with the tenant is very, very important when you’re doing an airport beverage conversion. There’s a lot of moving parts. And honestly, we get better with this every single airport conversion that we do. The last one we did was better than the one before and we start to figure it out a little bit more each time. But there’s a lot of different elements because this is a huge change for a lot of concessionaires or tenants at the airport that are serving beverages. Because the airport, if they have a new deal, they’re coming in and they’re asking the tenants to convert to whatever beverage company wins the RFP, and then they have a whole process that they’ve never gone through before.
Michael Kuhn:
It’s incumbent upon the airport to communicate very, very clearly about what to expect. This is when you all expect to see a rep coming in, this is the kind of service level you should expect. And there’s so many benefits to the concessionaires in these deals. But if you don’t communicate them properly, they don’t even know. So it’s really, really vital on so many levels to make sure that the communication is clear and understood by everyone.
Michael Kuhn:
And just for an example, let’s say that the company that won the RFP is Coca-Cola. So the airport is converting to Coca-Cola, and a certain tenant has been a Pepsi shop for a while, and so they currently have Pepsi products. Waters, juices, everything. They have a store of all of their Pepsi products. They might have a fountain that has… They have a bunch of bags in the box that they just paid a few hundred dollars for. They’ve got all of their bottles, waters, and carbonated soft drinks.
Michael Kuhn:
With this new deal, does that mean that they just have to throw all that out? Well, no. We want to make sure, in any deal that we do, that there is very little noise and very little pain for any of the concessionaires throughout the conversion. But it’s important to communicate you’re allowed to sell down and sell out of all of the existing inventory that you have, and then all new orders just have to be Coke. That’s the way that we manage these agreements. We want the transition to be as smooth as possible, and the only way to do that is to make sure that the communication is top-notch.
Tim Harms:
Yeah. And even I know some of the recent airports that we’ve done, we’ve coordinated a tenant conversion fair where the beverage company comes in and can even let the tenant sample those products. They bring in some fun activation assets that they can use in future promotions, et cetera. How important is just even communicating the excitement, not just on the paper and the policies, but even showing up in person, letting them meet their rep, letting them taste the products, et cetera?
Michael Kuhn:
It’s so important on a few levels, I think that what we’ve seen and what we’ve heard from the concessionaires that are operating within the airports, within these agreements, is that the level of service that they’ve had is so far different than anything that they’ve ever experienced before. And that starts with some of the fun things and just getting to know who’s going to be there. When a beverage company wins an RFP at an airport, they have a lot of business there. And so they can dedicate an entire rep to the airport, and that’s somebody that you’re going to be on a first-name basis with, that you’re going to see if there’s a problem. You have a cell phone number that you can text or call. The relationship is huge.
Michael Kuhn:
And you mentioned those tenant fairs. Another huge reason we do those and have done them at some of our airports is to just communicate the broad array of products that the beverage company actually offers. You think Coke or Pepsi; you think either the red can or the blue can. But in reality, in airports, you’re selling 60% water. And so the water products are there. There’s even kombuchas now or the bottled coffees. There are many, many products in these portfolios, and it’s good to communicate those and get everybody excited about them.
Tim Harms:
Excellent. So the first pitfall to avoid is communicating poorly with their tenants. What’s the next thing that airport executives should do to ensure a smooth process converting to a pouring rights agreement?
Michael Kuhn:
I think of this as the nuts and bolts of the conversion. If you’re talking about conversion, you’re actually thinking about the physical equipment and everything that moves around. So the next one would be the equipment conversion and all the elements at play there. And so typically, the way these deals operate is the new beverage company will provide all new equipment to the participating tenants. So that includes coolers, that includes fountain equipment if they have fountain equipment, that includes racks, all of these things that help provide infrastructure for selling the beverages. And they typically need to be swapped out, but the existing equipment, it’s not always clear where it’s going. So it’s a full, large process of taking surveys and inventory of everything that’s going on, where the old equipment needs to go.
Michael Kuhn:
But then once you get to the actual point of converting and pulling in the new equipment and installing it, the coordination with where the old equipment goes is actually quite complicated. If somebody switches, like in our other example, into a Coke airport, so they might be moving some existing Pepsi equipment out. The beverage companies are good at working together and do these conversions on a relatively frequent basis at different places, whether it be an arena or a stadium, or even a restaurant. They play in the sandbox fairly well together, but they don’t have to do it in airports very often. And it’s a unique animal due to the security concerns and everything. You can’t just drive up to an airport and pick up a cooler or a pick up a few fountain units that got pulled out or set to the side. There is a lot more that it takes to pull it off, and there’s normally other parties involved, and you got to know whose is what and where it belongs and where it needs to go.
Michael Kuhn:
The last thing you want, from the airport’s perspective, is to pull a piece of equipment out and have it sitting in the middle of a store or in the back somewhere where it’s going to be affecting business. And we’ve heard horror stories of that sort of thing happening, and so we try to avoid that as much as possible. But it’s not necessarily a simple process.
Tim Harms:
Michael, so there’s a lot of moving parts here to get done well and in a very accurate manner. Who owns this process? Does someone from the airport need to own it? Does someone from the beverage company need to own it? Is there someone else that owns this process? How does it work best?
Michael Kuhn:
It is a collaboration. And Enliven, we like to come in and put ourselves right in the middle of it and help all sides. It’s on the beverage company to coordinate this, but it is not something they’re used to doing all of this time due to the security and all of the other elements that are at play in airports. The beverage company is dealing with different existing client accounts. So the McDonald’s in the airport has probably a national account, whereas the local restaurant has their own deal, and they deal with somebody different at their previous beverage company. And so there’s a lot of coordination and surveying that needs to take place in the understanding of where the existing equipment belongs and where it needs to go. But it normally is done in partnership between Enliven, whenever we are present, and the beverage company.
Tim Harms:
All right. So the first pitfall to avoid, not communicating clearly with your tenants. The second is not thinking through and owning the equipment conversion process. What’s the third pitfall to avoid, Michael?
Michael Kuhn:
It’s balancing all of the stakeholder interests. If you think about a beverage deal like this and implementing one, there are so many different folks that it affects. If you just think about the beverage company, there’s the leadership team that was pushing for this deal and maybe negotiated the deal. But then, after the ink gets dried, the implementation gets passed along to an account team that is used to working in restaurants and foodservice and type accounts, and it’s a little bit of a new process for them sometimes. There’s a vending team that is separate that is going to participate in the vending aspect of the agreement if that’s part of the agreement. There’s a marketing team that’s going to facilitate all of the promotions and activity that goes on in coordination with the airport. So all of these people have different interests and different expectations for what’s going to go on.
Michael Kuhn:
You can go to the tenants and the concessionaires. We talked about that already, how important it is to communicate to them. But it’s a unique situation. When we go into any of these agreements, I already mentioned it, but we want this to be a huge benefit where they’re getting great pricing and all kinds of promotional benefits that are going to increase sales by being a partner with the airport’s beverage partner. But that process, it’s a new relationship, and we want to make absolutely sure throughout the process that they feel the love. That they understand that this is done with their interests in mind and that they are going to benefit greatly from it, and so it’s really important to think through the beverage company’s interests through the tenant’s interests. But then the airport has a whole lot of folks and stakeholders as well. The decision might have been made to move forward to go and get a pouring rights agreement in place by the executive team. But knowing all of those pieces and fitting them all together is really important as you make key aspects and key decisions.
Michael Kuhn:
And so I think from what we’ve learned, it’s a valuable role for bringing in a third party, whether it’s Enliven to actually facilitate those conversations, keep all of those stakeholder interests top of mind as we move forward. To make sure that everyone’s aware, have their eyes wide open, and just really to maximize the value and the benefit of the partnership. Because it will benefit all parties, but we want to make sure that that’s communicated properly across all the different channels.
Tim Harms:
One of the key elements also, I think, to keep in mind is how this benefits the end-user at the airport, the traveler, and enhances their patient journey. Can you highlight a few ways that the conversion process you can balance the traveler’s interest in the conversion process?
Michael Kuhn:
So the traveler, you got to think about what it looks like for them to go in the airport right now. With a beverage deal in place, they are going to have some consistent messaging throughout the airport. Because typically, some of these agreements have mutually agreed to funding that promotes beverage sales that might just actually provide a fun something to do while you’re waiting for your flight. But if you partner with Pepsi at your airport, they might have some water messaging and some promotions and some fun things that benefit the traveler all the way along. Then you might go down closer to your gate and see that there’s a kids’ play area that’s sponsored by Pepsi or Mountain Dew that is there for your family to enjoy while you’re waiting for the… There are many different ways in which these beverage deals really do benefit the traveler as they go through, whether it’s lower prices as they’re going through, or whether it’s something that they can actually physically interact with and enjoy throughout their airport experience.
Tim Harms:
Thanks, Michael. This is all super, super helpful, valuable information. I guess thinking through your experience, having done this for airport after airport now, at the end of the whole process, what is it that you hope that the airport would say about the process? Or what is it that you’d hope the traveler would say? What is it that you’d hope the tenant would say about the process? What is success in converting an airport for you?
Michael Kuhn:
We talk a lot about no noise. So we want to avoid any complaint from any concessionaire. And we do that by partnering hand in hand with the beverage company to do conversions overnight or after hours, whenever those stores aren’t open. We make things as simple and easy as possible, so there is no pain throughout the entire process. And we’ve had some quotes even from some concessionaires saying things like, “I was kind of skeptical going into this, but beverage company so-and-so has been so phenomenal and so helpful. And the level of service I’m getting is so much better than what we received before. I am just astounded at what this whole process has been like.” And those are the type of things that we want to hear.
Michael Kuhn:
But at the end of the day, we want the traveler, we want the concessionaire, we want the airport to look back and say, “Wow, that was a heck of a lot easier than I thought it was going to be.” There’s a lot of little decisions, but if you think through it and set them up the right way, I think we can avoid a lot of the pitfalls at the… Result in a very smooth transition that looks almost seamless.
Tim Harms:
Yeah. Up until this point in the process, a beverage deal, a pouring rights partnership, has all been theory. It’s been on paper. And this is the first moment in the process that it becomes real. It’s real life. It’s operationalized for the vast majority of the people that will experience a pouring right. So it’s so important to get this moment right. If you can get it right, you can start off the partnership on a positive note, on a really good footing. It pays huge dividends for the partnership for years to come. So I think this is a really important topic to speak about. I’m thankful that you outlined a few of the key things to look out for. I think it’s pretty safe to say that you are now much more famous than just serving great ribs. So thank you, Michael, for joining us today. Thanks for sharing all this insight. Any parting words?
Michael Kuhn:
No, but I look forward to growing in my fame on future appearances on the Enliven podcast. Thank you.
Tim Harms:
It’ll be a pleasure. Thanks.
Tim Harms:
Thanks, everyone, for listening in. I hope you found that informative. If you have a burning question about your beverage negotiation or partnership, we’d love to hear from you and answer it on this podcast. Reach out to us by emailing podcast@enlivenpartnership.com.
Tim Harms:
And hey, before we sign off, I want to remind you that you can take both the guesswork and the legwork out of your beverage partnership. You can level the playing field in your beverage negotiations, and you can save or make your company millions through a new or an improved beverage agreement. The first step is a free beverage opportunity analysis, which will tell you just how much you can save or you can make. Sign up for your free beverage opportunity analysis at enlivenpartnership.com and by clicking free savings estimate. On behalf of everyone here at Enliven, thanks for listening in.
