How that glass of Ketel One helps pay Kaner’s salary

Ketel One

It’s no surprise that alcohol consumption and watching pro sports go hand in hand. But that’s especially true for the Chicago Blackhawks.

Two Stanley Cups in four years and a stronghold on the city’s sports consciousness have bolstered the team’s official bar program, which has more than doubled in size to 217 locations since its launch in 2009.

Originally designed to reinforce the Hawks brand with young fans in the city, the network of watering holes now stretches beyond the six-county area to 61 bars downstate.

But its growth is far more than a reflection of rampant interest in the Blackhawks—it illustrates one of the key synergies between the team and its sister ventures under the Wirtz Corp. umbrella that allows Hawks ownership to cash in while continuing to claim that the franchise loses money.

While bar programs are a common promotional practice in sports, the Hawks get a unique financial benefit because of their connection to Wirtz Beverage Group’s alcohol distribution business. With about $2 billion in annual revenue, it’s the largest company in the Wirtz collection, which also includes real estate, insurance and banking. Roughly one-eighth of that revenue comes from bars in Illinois.

DRAWING A CROWD

Here’s how it works: The team equips “official” bars with Blackhawks-themed decorations and promotes them as places to watch games. In return, the bars commit to showing each game on at least half of their TVs, playing game audio over the speaker system, and—most important—offering special deals on brands distributed by Wirtz Beverage during Hawks games, when crowds are often 20 percent larger than on usual weeknights.

“We leverage both sides,” says Danny Wirtz, 37, son of Hawks owner Rocky Wirtz and executive vice president at Wirtz Beverage. “The value of the Blackhawks brand brings a lot to the (bars). We ask them to meet us halfway in terms of their promotion of games and events, and that also means featuring Bud Light and other brands that Wirtz Beverage represents.”

The program has come a long way from its inception, when the Hawks were recovering from an abysmal decade and a bar that committed to showing their games on most of its televisions might lose customers.

Today, Mr. Wirtz says he frequently turns down bars seeking to join the program to avoid spreading the team’s resources too thin, while targeting new locations elsewhere in the state.

Through the first three months of this season, sales of Wirtz’s core liquor brands at official Blackhawks bars—Ketel One, Fireball, Captain Morgan and Southern Comfort—were up 70 percent from the year-earlier period, when NHL games weren’t being played due to a lockout. Nonetheless, that number is significantly higher than the 29 percent increase at Wirtz’s non-Blackhawks bar clients in Illinois during the same period.

That money isn’t subject to the National Hockey League’s revenue-sharing rules and filters back to the Hawks when the parent corporation helps cover the team’s expenses, which Hawks ownership says it cannot do through ticket revenue, sponsorships and TV rights fees alone.

Wirtz Beverage cannot legally require bars to purchase or promote its brands, but it can ask. And those that don’t perform can be pushed out of the Blackhawks promotional program.

But most bars realize that Wirtz Beverage’s owners “are the same people helping to bring more people into my bar on off nights or (for) road games,” Mr. Wirtz says. “We (both) share in the success of the Blackhawks.”

DRINK THIS

When the liquor distributor wants to push a particular brand, it will throw in extra cases to bars to lower the cost per unit, giving them a greater incentive to run specials on those brands.

“It’s ingenious,” says Humberto Martinez Jr., owner of Timothy O’Toole’s, which has locations in Streeterville and Gurnee. Both locations typically see 40 to 50 more people on Blackhawks game nights compared with non-game weeknights, and more than that if it’s a rivalry matchup.

On game nights, many bars will tag deals on Wirtz-brand drinks with hockey-themed names. “They’re going to drink the Blackhawks gameday special,” Mr. Martinez says. “It’s a mind-wash.”

Increased traffic on game nights also gives Wirtz Beverage an edge in attracting more brands to its distribution business.

Those brands look for any advantage that a distributor can deliver to drive higher sales, and touting the Hawks is a valuable one, says David Henkes, vice president of Chicago-based food and beverage industry consulting firm Technomic Inc.

“It’s a unique and very Chicago promotion that obviously drives incremental business, and you can’t understate the value of that to the brands,” he says. ”It makes (Wirtz) a much more attractive partner to the spirits.”

With the Hawks fan base continuing to grow, Mr. Wirtz is targeting bars in Iowa and Wisconsin.

“We see Hawks fans traveling to away games all the time,” he says. “Eventually we could have Hawks bars in another NHL city.”

View the full article on chicagobusiness.com

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Filed under Alcohol, Bar, Dave Henkes, Liquor, Press Release, Spirits, Sports, Sports Bar

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