AXiNsider by Airport Experience® News
Enliven’s CEO Tim Harms was featured in Episode 121 of AXiNsider, a podcast produced by Airport Experience® News. Take a listen below.
Episode Description
Originally posted by Airport Experience® News:
“This isn’t lip service. We’re really interested in partnering with all parties and when we get engaged and we start our process, the first thing we want to do is sit down with everyone, get everyone’s interests and concerns on the table. We invite everyone to that conversation.”
Enliven has pouring rights deals at four airports in the U.S. The company’s new CEO, Tim Harms, says several more airports have put into upcoming RFPs language opening the door to additional such deals. While pouring rights deals remain controversial among concessions operators, Harms says Enliven wants to work with them and all parties to ensure the deals increase sales and profits for each.
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Related Resources:
3 Reasons Beverage Companies Want to Partner with Airports
RDU Airport Supports Veterans – Powered by Pouring Rights
LIFEWTR Lounge Debuts at PHL – Powered by Pouring Rights
Transcript:
Andy Tellijohn:
Hello, everyone. Thank you for joining us for this episode of the AXiNsider podcast. My name is Andy Tellijohn. I’m the senior reporter at Airport Experience News. Today. We’re talking with Tim Harms the new CEO at Enliven, which negotiates exclusive pouring rights deals for large property owners, such as hospitals, restaurants, and yes, airports. Tim, welcome to the podcast. How are you today?
Tim Harms:
Good. And thank you for having me on, Andy. I really appreciate being on here. Look forward to the conversation.
Andy Tellijohn:
Absolutely. Well, thank you for joining us. You’ve been with Enliven for a number of years now, and you folks probably know who you are, but there’s been a lot of turnover over the last couple years with COVID. For those who don’t, tell them about yourself.
Tim Harms:
Yes. Thank you. I’ve been with Enliven for going about 10 years now. And at Enliven, we really just do one thing, and that’s create and manage beverage deals. Sometimes they’re referred to as pouring rights agreements, and that’s just an agreement between a host property or an organization like an airport, and one of the primary beverage manufacturers and companies. So we’re talking about Coca-Cola, PepsiCo, Keurig, Dr Pepper gets in the mix a little bit as well. And we help create those partnerships. We try to take a perspective that we want to create a win, win, win for the airport in this case, the beverage company, the traveler, and really even the concessionaire and the tenant.
Tim Harms:
We just want everyone to win through these partnerships. And what they are is just a direct agreement between the organization and the beverage company to serve exclusively or semi exclusively that beverage company’s products. So that is of course the sodas you think of when you think of Coke, Pepsi, Dr Pepper, but also their full portfolio, waters, teas, juices, kombuchas, sparkling waters, the whole gamut these days.
Andy Tellijohn:
Okay. All right. Well, that sounds good. You’ve been in the big corner office now for a couple of months. Any lessons learned or changes coming since you’ve taken on the new role?
Tim Harms:
No, I don’t think things are going to change too much. I’m just honored to be in this role. We’ve got a great team that we’ve developed over the years, so we’re continuing to grow. Of course, we work in the airport channel. We also have a large, portfolio of restaurant clients, theme parks, hospital systems, getting into C-stores, convenience, and gas. And most of our business is in North America, but we’re expanding internationally as well. So you may see some changes if you follow us in that regard, but we’re really focused on doing one thing, which is focusing on pouring rights agreements and creating these partnerships that are really larger than the sum of its parts.
Andy Tellijohn:
Okay. Well, these pouring rights deals have been a little bit of a lightning rod issue here in the airport industry. What can you tell us, give us an update on the number of North American airports you’re currently working with and we’re coming off, COVID a little bit here, 2022, 2023, how do you see your business performing right now and into the near future?
Tim Harms:
Yeah. In terms of just airports, we’re currently working with four airports in North America. We’re having discussions with several others, many of have incorporated language in their leases and kind of prepared the groundwork for exploring pouring rights further. But in terms of just our airport business, we’re working with four great clients. And the partnerships are really working. Year over year, we’re seeing increased beverage sales, we’re seeing increased sponsorship revenue to the airports. And it’s exciting what’s happening.
Andy Tellijohn:
You mentioned that some of the airports that you’re talking with right now have put language in that lays the groundwork for exploring this kind of arrangements. Can you expand on this? What exactly does that mean? And has COVID changed the way that airports are looking at this type of pouring rights deal?
Tim Harms:
Yeah, I think there’s just a lot of interest, especially before COVID, there was a lot of interest in exploring pouring rights and what it could mean. And in some cases, we’ve been told by airport clients that while other non-aeronautical revenue streams decline a lot during COVID, the beverage sponsorship funding kept coming in. And so there were some of the largest payments and the largest programs at our airport clients during the darkest days of the pandemic. So it’s been a real bright spot, to be honest, for some of the folks that we’re working with over the last couple of years. Just in terms of the contract language, we just always want to make sure that we’re doing these in partnership and in concert with tenant partners and concessionaire partners. And so, just making sure that everyone’s in alignment, we’re either phasing these in over time as lease language leases come up, or we’re working in concert in partnership to make sure that everyone is on board with the program and really fits stands to benefit from it.
Andy Tellijohn:
Okay. We’re talking with Tim Harms the new CEO at Enliven. Enliven has asserted since pouring rights became a thing here at airports that in fact, you’re not slicing the pie differently, quote-unquote, but are actually increasing the size of the pie so that there can be multiple winners out of these arrangements. Can you cite an example or two I know that we talked about one arrangement that you had that involved a promotion that benefited veterans. Can you talk a little bit about that or maybe one or two of the offerings that you’ve had, where all of these different players came to the table and it did benefit everyone.
Tim Harms:
Yeah, absolutely. Thanks for the question. And I think it’s important to discuss, because I think there is a misunderstanding in the marketplace that we’re here to slice up the pie differently and take money from one party and put it in another, whether that’s the beverage companies and we’re just trying to beat up the beverage companies or whether that’s the tenant partners, we’re just trying to take money. And that couldn’t be further from the truth. It really couldn’t. We’re passionate about creating these partnerships that are bigger than the sum of its parts and bringing all parties to the table and using everyone’s unique benefits and strengths to really benefit everyone. And so you mentioned one of the activations that happened through the pouring rights agreements at RDU with the local Pepsi bottler, PBV Pepsi bottling ventures, specifically benefiting veterans in an organization serving veterans, Vet Tix.
Tim Harms:
And they ran a promotion there. It was tied to Pepsi. Pepsi brought this forward. It was tied to the Aquafina brand. And basically, it was promoting the sale of Aquafina and every sale of Aquafina would provide a donation to benefit Vet Tix organization, which provides tickets to veterans and their families to local events. And so during this promotion period, through this program over $2,000 was donated to Vet Tix, but Pepsi PBV came over the top and did a promotion that provided point of sale material for the concessionaires and the outlets. They also, did a social media advertising by that generated over 500,000 impressions over 1.4000 clicks. We saw over that marketing period, the Aquafina sales increased about 22%. So here’s an example where the tenants are benefiting.
Tim Harms:
They’re getting this promotion. It’s increasing sales, beverage sales. The airport’s benefiting. They’re getting this wonderful exposure. They’re partnering with a really great organization, benefiting veterans in their community. They’re getting extra rent from the increased sales. The passenger is benefiting. They’re doing something good with their purchases. It’s something different that they’re not used to seeing every day. So I think that’s a great example, and obviously the beverage company is happy. They’re getting great exposure, they’re getting more sales. And I think it’s a great example of the different parties coming together. And this is just one small thing. I mean, these types of programs are happening every month at the airports where beverage companies are partnering with them. If I could give another example too, at Philadelphia International Airport, PepsiCo is their partner.
Tim Harms:
And you may have saw last year, they unveiled the LIFEWTR lounge. And there was an area at the airport that was underutilized from a food and beverage perspective. Passengers weren’t able to get the beverages and snacks in this particular area. And so they worked with a local concessionaire to set up the LIFEWTR lounge. And this is a great lounge. Of course, it provides LIFEWTR and some snacks, but it also features local Philadelphia, underrepresented artists on a monthly kind of rotation. And they feature this artwork, whether it’s in actual painting or digital art or music even. And they have a QR code. So passengers who are interacting in the lounge and see the artwork or the art displayed, they can actually scan the QR code, interact with that entire portfolio of that artist’s work.
Tim Harms:
And it ties in with the LIFEWTR brand, which if you’re familiar every quarter, they refresh the artwork on that bottle to feature new artists. And then PepsiCo made a generous donation to an arts organization in Philadelphia because of it. And so here’s another example. You’ve got more sales, incremental sales happening at a new outlet that’s benefiting kind of a local concessionaire partner. You’re featuring people in the community. There was a lot of press about it. The airport got some great exposure in publicity, the beverage company’s getting exposure with their water brand, and the passenger has something really fun to increase to help improve the traveler journey. So I think those are just a couple of examples of where everyone benefits when these partnerships are structured in the right way.
Andy Tellijohn:
Okay. And how do you make sure that there are enough events like that going on where that’s not just a one time thing? I mean, is there a strategy in place to make sure those that’s a regular type of event?
Tim Harms:
Yeah, absolutely. I mean, in how you set up the partnership, from the very beginning, we want to make sure it’s all about highlighting the best things that each bring to the table. And for the beverage companies. I mean, you may think of them as a beverage producer and distributor manufacturer, and they are. And they’re great at that, but really they’re great marketing companies, right? I mean, they each have dozens of billion-dollar brands that they’ve created. They’ve marketed. They’ve harvested. And so they’re really good at creating buzz at knowing their end consumer, and you kind of just give them a pedestal, you give them a platform and you really say, Hey, we’re really serious about partnering, and it’s not just about beating you up for money, or it’s not just about negotiating against you.
Tim Harms:
We actually want to partner with you, and we want to highlight your brands in a way that is sensitive to our airport aesthetic and is sensitive to our demographic where it really actually is perceived as a met benefit for our passengers, our guests. And the beverage companies love to have that conversation. And so they’re eager to invest. Their brand teams are eager to come and partner because it’s a real benefit to them. They see actual sales as a result. When you think about the beverage companies and the marketing teams behind them, they’ve obviously got their budgets and they could spend it on billboards or commercials. We just like to say, in addition to that, consider spending it at our airport clients where you can actually track return. You can see how much sales have increased when you run this promotion, when you run this life water lounge when you run this Vet Tix veterans promotion. So I think it makes a lot of sense for all parties involved.
Andy Tellijohn:
Okay. Okay. And that brings me to the next question. We’re with Tim Harms the CEO at Enliven. And concessions operators, especially some of the larger ones have fought pretty loudly against pouring rights deals. Among their arguments, is that the deals take away from their bottom lines and decrease consumer choice. I know that you’ve got a different perspective on that. So can you tell me a little bit about your take on how that doesn’t affect consumer choice perhaps even improves it. And also about some of the efforts that at least you’re telling me that Enliven takes to work with these operators to make sure that they can also come out benefiting from these deals as well?
Tim Harms:
Yeah, absolutely. We think about these deals and think there are four primary benefits to the concessionaires and the tenants. And the first one you already mentioned is increased sales. So actually with some of our airports, we’re seeing on a per passenger basis, beverage sales have increased over 30% per passenger from before the beverage deal was enacted. And I think that’s a result of a lot of things. It’s a result of these activations that we’ve talked about, excitement about having a program that pulls all of the assets together. It’s about merchandising properly. It’s about making sure that there’s a dedicated rep from the beverage company, walk in the terminals, making sure that the concessionaire know if there’s any out of stocks coming their way, or getting ahead of those and making sure that they have all their merchandising needs and equipment needs taken care of.
Tim Harms:
So anyway, there’s increased beverage sales which benefits the tenant, benefits the airport. There’s also lower pricing. We try to make sure that the pricing is really competitive, and this is a particular benefit for the local, the minority, the ACDBE tenants who may not have access to the purchasing power that some larger of Coke, Pepsi and Dr Pepper’s customers do. So we try to make sure that everyone benefits at the airport from lower pricing. I mentioned earlier, increased service. There’s a dedicated beverage rep that’s talking weekly, sometimes daily to the operators on the ground to make sure they’re getting great service. If a fountain machine goes down, they get priority because the airport is such a prestige account for that local market. And then new equipment, or more new equipment that has the latest energy standards.
Tim Harms:
And so when you tie all that together, we think it’s a great benefit for the tenants. In terms of the choice conversation are you eliminating choice for passengers, they want one product, but they can’t find it because there’s an exclusive or semi-exclusive deal. We would just say a couple of things. In these agreements, we try to provide some carve outs, especially for local brands and maybe the craft brands, but also when you think about the beverage companies, not just as their flagship brand, the red can, or the blue can, or the red bottle or the blue bottle, but when you think about a whole portfolio of products and where the trends are going right now, soda, diet soda have been declining for decades, to be honest. And waters, sparkling waters, kombucha, teas, juices are really on the rise.
Tim Harms:
And when you have both company products on the shelf, you’re actually taking up shelf space for some new products, new categories that are emerging, that you may not have room for if you’re talking both companies products. So we try to encourage people to think about the total portfolio of the products and actually offering space for the product that a consumer they may not pick up the diet soda anymore, but they may pick up the kombucha. And there may be a higher retail price for that product as well. I think the data speaks for itself. On a per passenger basis, beverage sales have increased when airports adopt pouring rights. And so those are a few of the points that we would say. I would just say we’re really interested. This isn’t just slip service. We’re really interested in partnering with all parties. And when we get engaged and we start our process, the first thing we want to do is sit down with everyone, get everyone’s interest on the table, concerns on the table, and let’s make sure we’ve covered off on everything. So we invite everyone into that conversation.
Andy Tellijohn:
Okay. And what would you say to the operators who themselves may already have existing rights arrangements with a company in any given market? How does that fit in with what you were saying about pricing and being able to bring your prices to the table?
Tim Harms:
Yeah, we would welcome that conversation. If you have a specific program that you want to protect or you want make sure that you’ve got whether it’s pricing or a rebate, if there are things, let’s have a conversation about it. We can ensure that we can protect that if we know about it, and we want to make sure everyone wins from these. So I think, again, we’re not going at it saying we want to slice up the pie differently and cut someone out. We want at the end of the day, everyone to raise their hand and say actually this program was easily in that benefit for me and my operation.
Andy Tellijohn:
Okay. Tim Harms CEO at Enliven. Tim, is there anything else you’d like to add today?
Tim Harms:
I guess I just repeat, we’re really passionate about partnerships. It’s been a tough road the last couple of years, and especially for the concessionaires, especially for food and beverage programs, we know the headlines, labor shortages, product outages, inflation, it’s a tough environment. And what particularly those people on the front lines and those people in the outlets do day in and day out, it’s a tough job. So we have a lot of respect and really love working with those folks. So we want to help in any way we can. We really do. And we think the beverage companies, if you structure the partnership in the right way, have a lot to provide for the airports, for the tenants, and for the passenger.
Andy Tellijohn:
Okay. Sounds good. Thank you for taking some time, Tim. Appreciate it.
Tim Harms:
Absolutely. Thank you.
Andy Tellijohn:
All right. Take care.
Tim Harms:
Thank you, Andy.
Andy Tellijohn:
All right.
