A Primer on Beverage Deals at Airports
Over the last 5 years, pouring rights has become a topic of increasing interest for airports. As airports strive to discover new sources of revenue generation, to level up their customer experience programs, and to implement programs that serve to benefit all business partners, pouring rights offers an intriguing proposition. Let’s delve into this topic together, exploring what pouring rights agreements entail and what benefits they bring for airports today. This article will be the first of a multi-part series and will introduce over-arching concepts which will be spelled out in greater detail in further article.
What are Pouring Rights Agreements?
Pouring rights agreements are contractual arrangements between airports and beverage companies, typically giants like Coca-Cola or PepsiCo. These agreements grant exclusive or semi-exclusive beverage pouring privileges to a particular brand within an airport’s premises. In essence, they dictate which brands are available for purchase and consumption in airport restaurants, news and gifts retails, cafes, lounges and vending machines – anywhere beverages are sold.
Historical Context and Evolution
Pouring rights are not new – in general and specifically in the airport industry. Exclusive beverage deals emerged within the beverage industry as a strategic marketing tool, enabling brands to secure prime placement and exposure in high-traffic venues. These agreements are now commonplace in restaurants, universities, theme parks, entertainment venues, hotels and even hospitals.
In the airport context, pouring rights have been around for nearly 30 years. In fact, the first airport pouring rights agreement in the United States was established at Dallas Fort Worth International Airport in 1995. Over time, pouring rights agreements have evolved to meet the evolving needs and expectations of airports. Today, seven U.S. airports have negotiated pouring rights agreements, with many additional airports incorporating contract language in their leases to give the properties the ability to negotiate pouring rights in the future.
New Revenue Generation
Revenue generation is imperative for sustaining operations and driving growth. Pouring rights agreements can play a pivotal role in this regard, offering airports a reliable, recurring source of income through contractual arrangements with beverage companies. By securing exclusive pouring privileges for a particular brand, airports can negotiate deals that contribute significantly to their bottom line — through up-front sponsorship payments, annual sponsorship allotments, quarterly volume-based rebates and monthly vending commissions.
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Enhancing the Customer Experience
At the heart of airport management lies a commitment to enhancing the passenger experience. As airports vie to attract and retain travelers, providing a seamless and enjoyable journey becomes paramount.
Pouring rights agreements play a crucial role in this endeavor by enabling airports to offer a diverse range of beverage options that cater to the preferences of their guests. Whether it’s a refreshing soda, a revitalizing energy drink, or a soothing bottle of water, these agreements ensure that passengers have access to their favorite beverages throughout their journey.
In addition, pouring rights contracts can include generous sources of funding for capital projects, experiential activations and initiatives aimed at improving the traveler’s journey. Beverage companies can use their resources to bring experiences, guest appearances, promotions and even new and enhanced physical spaces to the airport.
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Strategic Partnerships and Branding Opportunities
Beyond revenue generation and passenger experience enhancement, pouring rights agreements offer airports opportunities for strategic partnerships and branding initiatives — including with the beverage company’s other institutional, community and entertainment partners.
By aligning with beverage companies and the beverage companies’ other reputable community partners, airports can leverage their brand equity and marketing expertise to create compelling promotional campaigns and branding activations. These partnerships not only enhance the airport’s overall brand image but also create unique experiences for passengers, fostering loyalty and engagement in the process.
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Addressing Sustainability and Environmental Concerns
In today’s environmentally conscious world, sustainability is a key consideration for airports seeking to minimize their ecological footprint. Pouring rights agreements present an opportunity for airports to align with their sustainability goals by incorporating eco-friendly practices into their beverage offerings. Whether through the promotion of reusable containers, the adoption of sustainable packaging materials, funding sustainability initiative or the sourcing of locally sourced and organic beverages, airports can demonstrate their commitment to environmental stewardship while satisfying passenger demand for sustainable options.
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Conclusion
Pouring rights agreements can play a multifaceted role in the success and sustainability of airports. From driving revenue generation and enhancing passenger experience to fostering strategic partnerships and addressing sustainability concerns, pouring rights offer airports a variety of benefits and opportunities for growth. In the upcoming articles in this series, we’ll delve deeper into various aspects of negotiating and optimizing pouring rights agreements, providing you with actionable insights and strategies to navigate this dynamic landscape effectively.
Targeted Key Takeaways:
- Pouring rights agreements are contractual arrangements between airports and beverage companies, granting exclusive or semi-exclusive pouring privileges to a particular brand within an airport’s premises.
- These agreements have evolved over time and are instrumental in driving revenue generation, enhancing passenger experience, fostering strategic partnerships, and addressing sustainability concerns for airports.
- Understanding the significance of pouring rights agreements is essential for airport executives like you, as more and more airports continue to adopt the practice.
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