Channel Strategies: Sporting and entertainment challenge beverage sales
August 15, 2009
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Theme parks, stadiums and recreation parks are all key accounts for which beverage distributors strive. Unfortunately, like many other channels, some of these venues are reporting sales that are off from historical totals.
Total revenues generated by U.S. amusement and theme parks accounted for an estimated $10.8 billion in 2008, according to a Theme Parks report from Mintel International, Chicago. In years of flat attendance, admissions revenue still tends to grow due to increases in ticket prices and changes in ticket mix, it says. However, ancillary revenues from merchandise and dining are more likely to decline with fewer visitors coming to the park. The contrast between admission growth in 2008 and dining and merchandise sales declines also suggests that consumers are still willing to pay the price to enter, but they may be trying to save money while inside, Mintel says.
Theme park sales expectations for 2009 do not bode much better. While consumers globally cut down on discretionary spending for travel and leisure, total revenues are expected to decline by 2.8 percent this year, Mintel says. Food and merchandising revenues are forecasted to fall by 1.7 percent in 2009, it says.
Sports sales
Beverage sponsorships and sports arenas, whether college or professional, indoor or outdoor, go hand-in-hand. One example is the new 49-foot-tall Coca-Cola Contour bottle installation at Turner Field, home of the Atlanta Braves. The new bottle replaces the original Coca-Cola Sky Field bottle, which stood above left field for the past 12 years. “
Enjoying an ice-cold Coca-Cola at a Braves game is the essence of summer in Atlanta, and we think the new Coca-Cola bottle really captures the specialness of that experience,” said Katie Bayne, chief marketing officer, Coca-Cola North America, in a statement. “The bottle is designed to be entertaining for the fans as well, and we think it will add a new sense of excitement to the experience of being at Turner Field for a game.”
Venues such as Pepsi Center or Coors Field in Denver, Miller Park in Milwaukee, Busch Stadium in St. Louis, Minute Maid Park in Houston and Tropicana Fields in St. Petersburg, Fla., clearly state how heavily beverage companies market at sporting events. And it’s for a good reason. Food and drink sales in recreation and sports centers, including movies and bowling alleys, reached an estimated $27 billion in 2008, according to the National Restaurant Association, Washington, D.C. This year, the association projects that food and beverage sales at recreation and sports centers will reach $27.3 billion, a decline of 2.4 percent from the year before in real growth.
Within the recreation and sports centers channel in 2009, managed services are projected to be an estimated $4.8 billion. Non-contractors in the category are expected to account for $13.3 billion this year. Clubs, sporting and recreational camps are anticipated to amount to another $9.1 billion this year.
Beverage companies continue to duke it out for important contracts to sports, travel and entertainment venues. In April, Delaware North Cos., an international hospitality and foodservice company based in Buffalo, N.Y., selected PepsiCo as the official provider of fountain drinks and packaged beverage and food products for its U.S. operations. The agreement makes Delaware North one of the largest travel and leisure accounts for PepsiCo Foodservice.
Delaware North operates concessions, premium dining, catering and retail stores in venues such as national and state parks, hotels, resorts, airports and gaming destinations. PepsiCo is assisting Delaware North with installing Pepsi fountain beverage dispensing equipment and foodservice product merchandising coolers. PepsiCo plans to use marketing programs to drive sales at Delaware North locations and increase guest traffic. I
n July, The Coca-Cola Co. made news when it reported that the Los Angeles Staples Center will begin serving Coca-Cola products starting Sept. 1. The company’s products will be brought into the arena as it is being folded into the deal that made The Coca-Cola Co. a founding partner of L.A. Live, a sports and entertainment venue. L.A. Live and Staples Center are owned by Los Angeles-based AEG. BI
