Raise the Bar: Setting Objectives Key to Spirits Category Partnerships

In a report earlier this year, global ad giant Dentsu projected that advertising spending in the beverages category is expected to grow 7.2 percent in 2024, outpacing the average growth for all industries of 4.6 percent.

Dentsu’s forecasters were particularly bullish on the alcoholic drinks segment, including the opportunity for spirits brands to spend on sports partnerships. Following suit, there has been a steady amount of sponsorship activity in the category this year, including the most recent deals between Jim Beam and U.S. Soccer and Maestro Dobel Tequila and Jon Rahm’s Legion XIII LIV Golf team. (Adding to its existing official marketing partnership with the PGA Tour.)

With legal restrictions, changing market conditions and competition on multiple fronts, it is critical for rights holders selling to and working with spirits brands to establish goals and evaluation standards from the start if partnerships are to achieve results and be renewed.

The matching of success metrics to objectives is especially important. In a category that is still much more comfortable with traditional advertising, it is often the role of property partners and/or agencies to ensure that measurement goes beyond visibility and impressions generated to determine actual outcomes from a sponsorship, especially for established brands.

For example, I recall a whiskey brand owner that was ecstatic with the exposure it received from an early foray into sports partnership. It was ready to greenlight a renewal of the eight-figure deal when further research showed that unfortunately it had not activated well enough to achieve its primary goal, which was persuading drinkers loyal to other whiskeys to switch to its brand.

When prospecting in the category, sponsorship sellers should understand trends that could influence a brand’s goals, such as negating price concerns in the face of overall inflationary pressures—an issue especially for premium brands—and overcoming the fact that today’s young adults are drinking less alcohol than previous generations—increasing the competitive set to include low- and no-alcohol beverages.

In early conversations with prospects, questions regarding the target audience—current brand drinkers versus non-loyalists, etc.—and whether the priority will be on experiential/consumption opportunities versus digital and media executions will allow both parties to focus on what matters most. A great place to start is with the query: “What can a partnership do for your brand that advertising cannot?”

Rights holders also should not overlook related products, as the example of the PGA Tour’s new official licensing deal with Owen’s Craft Mixers shows.

Finally, it is also possible that spirits and similar products may be looking beyond brand-specific objectives and interested in promoting the ideas of getting together, celebrating and socializing. The Dentsu report cites research that reveals 12 percent of U.S. adults say they have no close friends (versus three percent in 1990), while only 13% claim to have 10-plus close friends versus 33 percent in 1990. The report goes on to ask: “Alcohol has traditionally been consumed at times when people meet and socialize; what impact will a growing level of introversion have for the category?”