Thanks to a $1-million gift to the University of South Alabama, the most important beer of a generation will have its own named section when the school's new football stadium opens in 2020.
Earlier this month, it was announced that Mobile's Budweiser-Busch Distributing Co., Inc. would provide the donation to have the south end zone of the stadium named the "Michelob Ultra Terrace." According to an announcement by the university, the space "will feature several rows with walk-up drink rails," though it wasn't specified which drinks would be available. Based on the novelty-sized check presented by the distributor to the university, which features a large Budweiser logo, it would be safe to assume that Anheuser-Busch InBev products—led by the namesake Michelob Ultra—will flow freely.
Along with serving as a social space on football game days, the terrace will also be used for group events and special seating for concerts. Joel Erdmann, the university’s director of athletics, told Alabama.com that the new area would "bring a tailgating atmosphere into the stadium."
WHY IT MATTERS
Michelob Ultra doesn’t exactly need the extra attention of a stadium marketing buyout. Its massive growth has been steady. From 2017–2018, it grew 14% in volume sales in IRI grocery, convenience, and other stores, and is one of the largest beer brands in America. That increase was replicated at the start of this year, and its January–March volume was 14% greater than in the same time period in 2018. Through April 14 of this year, Michelob Ultra had sold $527 million in IRI stores, about three times the dollar sales of Sierra Nevada’s, New Belgium’s, and Samuel Adams’ portfolios combined.
But that doesn’t mean AB InBev or its distributor partners are calling for a time out. In general, research has shown that paying large sums for this kind of exposure doesn’t turn into huge wins, with one study concluding, rather plainly, that “naming rights do not have a lasting impact on the profitability of the firms that buy them.” Separately, there’s some research that shows fans are at least receptive to this kind of marketing, so the benefit seems to be in forging lasting connections and brand recognition with fans, who might just become customers down the road.
This new move by Budweiser-Busch Distributing Co., Inc. and South Alabama is an example of how beer and breweries are using partnerships within the NCAA to move products and build relationships. Given Ultra’s direct ties to sports, plus ever-growing consumer interest in “better-for-you” products, this positioning of the brand within a burgeoning football program is an on-trend development for larger players in beer.
In 2016, Fort Collins-based New Belgium gave $4.3 million to its hometown Colorado State University to establish the "New Belgium Porch" in the north end zone of its football stadium. Original plans for a bar and special seating area were originally going to be scrapped, according to reporting from the Coloradoan, but the largest sponsorship deal in the history of New Belgium covered that cost, with more than half of the donation going toward sponsorship rights.
[Disclosure: New Belgium is an underwriter of Good Beer Hunting's “Into the Wild” series.]
With capacity for 1,200 fans, the New Belgium Porch includes bar space, TVs, and "New Belgium flair." It also requires a minimum food and beverage purchase of $2,500 for groups who want to rent the space, which starts at a cost of $360 for CSU departments and $560 for non-CSU affiliated groups. At the time, then-CEO Christine Perich and 80 other New Belgium staff members were alumni of the university, and the brewery has been an ongoing research partner.
More recently, D.G. Yuengling & Son Inc.—which is based in Pennsylvania but has a production facility in Tampa, Florida—purchased the naming rights to the University of South Florida's Sun Dome, renamed the Yuengling Center in 2018. The multi-purpose space hosts basketball and volleyball games, along with concerts and other events. Yuengling paid an undisclosed, but "high six figures" sum for 10-year naming rights, according to the Tampa Bay Times.
In another example of this kind of partnership, Corona Extra sponsors the “Corona Beach House” tailgating space outside the University of Texas' football stadium. It even has its own slogan: "Horns Up, Limes In!”
In each of these cases, it’s not clear whether expensive partnerships have equated to tangible payoffs. But they’re all evidence of ongoing efforts by colleges to bring in alcohol dollars, whether through partnerships or beer sales, which were previously taboo at university sporting events.
The University of Texas brought in nearly $2 million in alcohol sales in 2016, its last year of reporting such information, and in 2017, Ohio State University claimed $1.35 million in sales. West Virginia University sold $500,000 in beer alone at its football games in 2016, and the state government in North Carolina is currently working toward allowing public colleges to follow suit.
“I think our AD brethren would suggest somewhere between $200,000 and $300,000 every year,” Debbie Yow, the outgoing athletic director at North Carolina State University, told The Associated Press in 2017.
Ignoring any arguments about what beer is, could, or should be sold at these games (that is literally an entirely different story), the takeaway from these partnerships and changing attitudes toward beer and college athletics is that there is serious money to be made. And given the sensitivities about having branding and marketing for booze around a bunch of under-age or just-legal college students, the influx of cash has resulted in numerous educational and safety programs, plus additional staffing at these colleges to address issues of consumption.
Given beer brands’ ongoing need to find new opportunities and new drinkers, these companies likely see value in maintaining a presence in athletic spaces. Advertising in and around sports is becoming trickier for beer, with TV viewerships aging and attendance figures declining. You’ve got to spend money to make money, as they say. These brands are definitely spending—but will it pay off?