Sometimes, we get asked: “Can’t we just negotiate our beverage agreement in-house? We have an entire procurement department that does this every day.”
We know your procurement team is qualified. When it comes to negotiating or managing your beverage partnership, however, there’s good reason to enlist the help of specialists.
Below is a brief and selected list of the top reasons to seek outside help:
You will achieve a best-in-class beverage program.
Bottom line, you’ll save more on beverage costs and make more sponsorship revenue by tapping into specific beverage partnership expertise.
That’s not to say your team is not talented (there’s no doubt they are) or could not save or make money by running a disciplined process. Of course they can.
For the same reason you seek out a heart surgeon – not a primary care doc – when you need heart surgery, so too should you seek out a specialist when you look to negotiate your first or next beverage deal.
Negotiating beverage sponsorship and marketing agreements is not a typical negotiation. These agreements only come up for renewal once every several years, and it’s unlikely that someone on your team has a specific expertise in the intricacies of pouring rights. Even more unlikely is it that someone on your team has knowledge of the latest benchmarks – from both inside and outside your industry.
Negotiating beverage agreements and managing beverage programs are all we do — all day, every day. We negotiate dozens of agreements every single year. Since our founding in 2005, we’ve saved our clients over $1 billion worldwide and are adding to that number daily.
In fact, our most recent analysis revealed that average dead net prices of Enliven-led programs are 33% lower than those negotiated in-house.
Companies of all types and sizes – from publicly traded Fortune 500 companies to some of the largest private equity firms in the world – find it valuable to enlist the help of a beverage expert.
Is it possible that you, too, could benefit from tapping into specialized knowledge?
You’ll position your negotiation in a way to deliver the results you want.
We often observe that organizations approach beverage contract negotiations as they would approach other commodities: trading volume for price. The problem is that the beverage companies don’t view themselves primarily as beverage distributors. Rather, they view themselves as brand builders. They’ve built beverage brands that are collectively served over 1 billion times per day.
For beverage companies, their best partnerships aren’t about driving down costs in order to receive access to volume. In fact, our beverage deal database reveals that product volume and dead net costs have very little correlation.
For the beverage companies, partnering with your organization is less about accessing volume and more about exposure to your customers and employees. It’s about investing in opportunities where they can continue to build their brands. Why else would a relatively low-volume university attract nearly $85 million in investment from a beverage company?
Beverage companies can achieve volume through a discount program with national grocery chains. They can only build brands through organizations like you. A smart beverage consultant will help you partner with a beverage supplier so that you both win.
No new hires; No time-suck.
While negotiating with a key supplier may sound run-of-the-mill, beverage negotiations are surprisingly complex. We recommend our clients allocate at least a year to properly negotiate beverage contracts. Most beverage agreements need involvement from several roles:
- senior executives
- food and beverage managers
- marketing managers
- financial analysts and officers
- in-house legal counsel
- accountants
- operations managers
By hiring a beverage deal consultant, your staff won’t have to divert precious time away from their other projects and priorities. You won’t have to add headcount. You will save organizational energy by having an experienced guide to handle the heavy lifting and balance all stakeholders’ interests.
The deal will get managed over the term – saving and making you more money.
After the program is negotiated, beverage deals need constant attention. We don’t only negotiate your beverage contract, we stay engaged for the entire term of the resulting program. This ensures you receive the largest benefit from the deal, and includes:
- auditing invoices
- receiving, validating and allocating rebate and sponsorship payments
- verifying rebate payments are accurate
- managing marketing activations
- running market tests to grow beverage incidence
- reporting on beverage volumes and trends
- resolving service issues
By partnering with Enliven, your team gets access to not only a dedicated account manager and expert negotiator, but also to a team of financial and data analysts, project managers, payment and escrow account administrators, service specialists and more.
Enliven becomes an extension of your team, optimizing your beverage agreement and enhancing the relationship with your beverage partner for the entire term of your agreement.
You’ll avoid contract surprises that will cost you money and give you headaches.
We’ve seen clients with deals that are projected to last 120+ years (no joke!) because of terms that serve to extend and elongate the agreement. We’ve seen deals where clients have to pay millions of dollars in residual fees – even after they satisfied 100% of their contractual obligations – because of onerous terms buried in the fine print.
Because we’ve been consulting for 15+ years (and those on our staff have been employed by the beverage industry for even longer), we’ve seen it all. We know what can come back to haunt you and where to look in the fine print. You’ll be relieved to turn these contract “tripping hazards” into terms that make sense for both parties.
You’ll have access to experience & data.
We’ve seen clients with deals that are projected to last 120+ years (no joke!) because of terms that serve to extend and elongate the agreement. We’ve seen deals where clients have to pay At best, your team only negotiates its beverage partnership once every handful of years. And when you do, there’s no readily-available benchmarking report or market rates accessible for what constitutes a fair – if not competitive – sponsorship value. How do you know what the value of your organization should be to a major beverage company?
Enliven’s beverage deal database contains hundreds of thousands of deal points accumulated over many years from across a variety of industries.
Further, Enliven is the only beverage consulting company that has employed executives from both Coca-Cola and PepsiCo. This provides valuable insight into the culture, processes, and strategy of both major beverage companies.
Your deal will get done.
Organizations have many priorities. What’s most important today may not be what commands everyone’s attention tomorrow. When you hire a consultant to help run the beverage agreement negotiation process, you know that the project won’t peter out. Our project managers will ensure that your deadlines are met, the project stays on schedule, and you make budget — by doing the heavy lifting for you.
There’s no risk – the consultant pays for the project.
While we can structure our engagement in a variety of ways, most of our projects are set up as “pay-for-performance”. We only receive compensation if we indeed accomplish your goals, whatever they might be:
- lower dead net costs
- increase sponsorship revenue
- grow beverage incidence rates
- sell more beverages
- achieve sustainability goals
Receive a Free Opportunity Analysis
Interested in exploring further? The first step is a complimentary opportunity analysis, presented with no strings attached. Contact us today to get started.
Additional Resources:
Do You Have an Equipment Strategy for Your Next Beverage Contract Negotiation?
3 Pitfalls to Avoid Converting Your Property to Your First Beverage Deal
Ryan Donovan: How Avera Health Saved 40%+ on Beverage Spend
