A DROP OF DIFFERENCE

AMITY K. MOORE

The word in today's beverage marketing arena is "customized." Retailers and beverage manufacturers are realizing that the more unique the event, the more successful the promotion. Sales increase, loyalty among a chain's customer base is bolstered, and the store becomes a place of difference.

A place of difference is equivalent to a point of difference in today's quickly consolidating supermarket industry. Even within national-manufacturer campaigns, chains encourage vendors to incorporate enough flexibility to accommodate regional customizations.

"More and more, you've got to do more custom-type events for retailers," said Mel Korn, chief executive officer at Saatchi & Saatchi Collaborative Marketing, New York. "They don't have to be mega events. Even those that affect categories in an aisle of the store are very key. Retailers want to brand their aisles," Korn added.

"If the event is a good one and is exclusive to them, it's something they can build their equity in. Then they might think about that as an annual event several years in a row. It gives them a point of difference," Korn said.

Although the theory could be applied to any category, beer and soda have earned reputations as staple items. They entice customers to purchase additional items, such as snacks or meal ingredients. Plus, many beer and soda companies have substantial marketing budgets, so they can provide heavy advertising support.

Korn noted that if an event is large enough, a soft-drink manufacturer could easily design a special package that calls attention to the event. "They could put bottle hangers on their 2-liter bottles," he added.

Beer manufacturers, on the other hand, have a much harder time working directly with supermarkets because of state laws that often prevent co-marketing.

Nevertheless, retailers and manufacturers still communicate enough to create events that drive sales.

Indeed, Spartan Stores, Grand Rapids, Mich., collaborates with many beer manufacturers in an effort to raise awareness about specific events and draw customers to its stores. But it all has to be done carefully as Michigan's laws prohibit alcoholic-beverage companies from directly promoting an event with a retailer.

"We are kept abreast by the key account reps of those companies on what activities and sponsorships they have going on. Then we use that and hop on the coattails of that promotion and run their items in ads to get the extra emphasis," explained Corky Mroczkowski, grocery director for Spartan retail.

Previously Spartan has become involved in mail-in free offers. For example, Mroczkowski noted an event whereby customers who purchased multiple cases of Corona could send for a free Jimmy Buffet compact disc. Corona organized the event in conjunction with a Jimmy Buffet concert tour, which was stopping in Michigan. By law the promotion had to be offered to all licensees in Michigan, but only those whose customer base strongly supported Corona beer would participate.

Other similar events supported by Spartan include the Busch NASCAR series, Molson's concert series, Anheuser-Busch's Michigan senior golf tournament, Guinness' free Guinness Book of World Records giveaway, and Sutter Homes' Napa Valley Monopoly game freebie.

More importantly, Spartan's figures show that these giveaways work. Sales increase twofold when a free product is offered as part of an event. Mroczkowski explained that when Spartan simply runs a beer on ad, sales increase 3.5% to 4%.

"If we tie that in with a mail-in free item on the same item at the same price point, that figure jumps to almost double, and when we did the one with Guinness, gave away the Guinness Book of World Records, we saw about nine times normal movement," he added.

Marketing surrounding events like NASCAR, golf or some other sporting event or activity prove to be the most exciting draws for beer patrons.

NASCAR is a popular event, particularly in states that host events, like Michigan. Indiana is another such state, where Martin's Super Markets has its stores.

This month, according to Doug Murphy, director of grocery merchandising at the South Bend-based chain, Martin's is running its "Brickyard Blast" promotion.

It's a program tied to NASCAR in which the grocer gets a list of the NASCAR cars and invites them to stop by its locations. In the past, Murphy said, it has brought in the Budweiser and Miller Lite cars.

"We'll have the beers tied into the ads running that week," he said. Furthermore, in-store displays, NASCAR decorations and other paraphernalia capture shoppers' attention. This year, Martin's is giving away grills, tickets to the races and packages of food from the sponsoring vendors.

The Superbowl is another event Martin's uses to promote beverages, but it tends to focus on soft drinks. Because the retailer involves several sponsors, beer companies often don't want to be included, Murphy said.

Saatchi's Korn added that the Superbowl has evolved into the single biggest grocery party event of the year. And retailers are seeking ways to differentiate themselves at this time. "Some are starting to promote earlier," he said. "Like Harris Teeter used to have the 'Party Bowl' and it went right on through the college bowls to the NFL playoffs," he said.

In spite of its popularity, along with traditional holidays where alcoholic-beverage consumption increases -- Thanksgiving, Christmas and New Year's -- retailers should be careful about the events they run during that time of year, warned Scott Silverman, vice president of specialty food and wine at Rice Epicurean Markets, Houston.

"When you put those holidays together, that's when a lot of stuff gets pulled off the shelf. You could do a special event, but you might be just giving up gross that you don't need to give away," he said. "You want to save those promotions for maybe when they're going to do you some good," he added.

Still, Minyard Food Stores, Coppell, Texas, frequently ties events into sports-celebrity appearances, often during hockey and football seasons, according to DSD buyer Scott Collins. "We use promotions year-round. Of course during hockey and football season, that's when it's the most effective to use those sports personalities," he said.

Collins added that because Texas is divided into wet and dry areas, it's often better to tie in with soda companies because sales are better. "Beer only applies to a certain amount of our locations, so it's more profitable for us to go with nonalcoholic beverages," he said.

So it is for Spartan -- working with soda-pop companies allows it to get involved in more co-sponsored events. This month, for instance, the chain is working with a bottling company as part of "Zoo Days," a two-day event during which children and their families are invited to a zoo in Grand Rapids free of charge.

Spartan offers hot dogs and refreshments during the day. In-store, the event is supported with displays and signs; and it is pushed in its weekly circular.

Such promotions as Spartan's Zoo Days are done because they promote good will in the community.

Saatchi's Korn explained why such events are gaining popularity. And their roots are right back in creating a place of difference. Additionally, there is a trend toward what Korn calls "cause" marketing.

"It's getting to be a bigger [sales] driver every day," he said. "People want to know what a business is putting back into a community. It's becoming more important to Americans," he added.

Rice is one of the retailers involved in cause marketing. Silverman said Rice raised $90,000 in a wine-tasting dinner that benefited the Arthritis Foundation. "We use it as a means of community service," he noted. Moreover, such events drive traffic in his stores because tickets are sold through the different locations, posters are hung, ads are placed in the store flyer and wine displays are prominent.

Other events Rice gets behind are geographic promotions in which the chain picks a region and promotes products from that area. Often beer, wine and other beverages are tied to those events. The California promotion involved wines and Anchor Steam and Sierra Nevada beers, and the Italian event similarly tied wines, beer and Pelligrino water. All in all, it's the wines at Rice that have become the upscale chain's beverage marketing base. Indeed, the chain is running an event, "Our Annual White Sale," during July that features 41 wines from across the world. Cases have been displayed in strategic locations throughout the store and competitively priced. Silverman noted that the prices are the lowest of the year and the lowest in the city.

This is the first time the chain has run the promotion, which will continue through the end of the month. Silverman said that checkers are wearing buttons that say "Lighten up, it's our annual white sale" to promote the event in-store. In addition, Rice listed all the featured wines in its monthly shopper's guide, along with descriptions and ratings for them.

Plus, a direct mail piece was sent to shoppers whose habits indicate a penchant for wine. In-store, there are at least one, often two, major displays that showcase the wines. Each is marked with a price look-up number so it can be scanned at the register. The data compiled there will be used next year to pick appropriate wines. Obviously, the best sellers will be offered again, while those that lack sales might be replaced.

"We hope to gain customers who wouldn't normally shop us because they're used to buying wine by the case, but maybe from a package store," Silverman said.

"Plus, it's a creative promotion at a time of year when it's probably one of the slowest months of the year for wine," he added.

The purpose of this supermarket event, and all the others tied to holidays, sports stars or events, and otherwise, is to draw consumers and drive sales -- to create that essential point of difference. One last note: The key thing when arranging an event, according to Korn, "is just to remember the store is a marketing medium."