Coke and Pepsi want to partner directly with airports because they are smart operators that realize the importance of revenue growth and building a brand.
Direct relationships with airports help these multinational players to increase their overall sales and to market their brands to a captive audience.
Airports benefit from the following:
- Hundreds of thousands to millions of new dollars annually (these are new monies that go straight to the bottom line or to fund needed/delayed projects);
- The best and brightest marketing pros visiting their facilities to help increase beverage sales (thus increasing rents from concessionaires); and
- The introduction of new products, technology and services that better meet ever-changing consumer demand.
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THE “INS AND OUTS” OF WHY COKE AND PEPSI LOVE AIRPORTS
1. Acquisition of volume = measurable results
Beverage companies spend billions on “marketing” with little or no direct “results” to show for their effort. For example, it is hard to quantify how many bottles of soda were sold because of Pepsi or Coke’s advertising splurge at the Super Bowl.
But at airports, beverage companies can spend millions in sponsorship dollars and know exactly how many gallons are being sold because of their effort.
Example: Coke will spend more than $3.5 million per year in sponsorship dollars at DFW. For this, Coke knows that it will sell north of 640,000 cases of product at the airport annually. Both beverage companies are willing to do similar deals at your airport.
2. Growth: Airports are behind others in adopting a standard business practice
Airports represent an important sector for growth for Coke and Pepsi because airports are virtually the only segment of the economy that does not engage in exclusive pouring agreements as a standard business practice.
Coke and Pepsi provide sponsorship dollars to practically every premier property in the country — except for airports. DFW and DTW are the highest profile domestic airports with beverage deals, but there are surprisingly few others in the U.S.
Example: When you stop and think about it, the only major public venue you’ll visit this week not sponsored by Coke or Pepsi is a grocery or convenience store. Essentially every other place you’ll go enjoys the benefits of a direct relationship with a beverage company. This includes the local sports arena/stadium, convention center, theater chain, restaurant, university, hotel, mall, theme park, etc.
These venues don’t have more aggressive management teams than airports, but their respective industry sectors do have a tradition of doing these deals. Airports are starting to learn more about beverage sponsorships and engage in them.
3. Brand building: Combining ad impressions with consumption
Both beverage companies recognize the value of your captive audience and the branding opportunities airports offer, i.e., Coke and Pepsi can showcase their brands in a unique way.
And, because of the length of time consumers spend in the airport, beverage companies have the opportunity to make a more lasting brand-building impact by combining ad impressions with consumption in the same occasion.
Both Coke and Pepsi have teams of professional marketers looking for opportunities to highlight their brands in exclusive environments like airports. These are the best and the brightest beverage marketing pros around, and they’ll work with your staff and concessionaires to drive beverage sales up. This will increase gross sales, which will increase rent payments from concessionaires (most of which are paying a percentage of gross sales back to the airport).
Final Thought: Coke vs. Pepsi competition fuels direct payments to you
Coke and Pepsi are two of the most fiercely competitive companies in the world. The stories of this rivalry are legend. Details of the clashes, the battles and the outright nastiness are told like folktales among those in the business.
Airports should put this rivalry to work for them.
Example: Coke and Pepsi are willing to “pay” for your exclusive business (and shutting their competitor out). They “pay” for exclusivity by providing new fixed funding to you and investing in more marketing onsite.
Other venues with concessionaire partners (i.e., universities, sports venues, municipal governments, theme parks, hospitals, etc.) routinely generate significant revenue from exclusive agreements with beverage companies simply because they asked Coke or Pepsi to work with them. Shouldn’t you?
If your airport is interested in learning more about a beverage sponsorship and how the process works, please contact us today.