Friday, August 22, 2014

BC Place Needs Craft Beer - Open Letter to Whitecaps, BC Lions, Centerplate

August 21, 2014

Michael Baker, Centerplate Catering General Manage
Ryan Whitman, Manager Fan Services Vancouver, Whitecaps
George Chayka, VP Business, BC Lions

Re: Craft Beer at BC Place

As residents of British Columbia, you are likely aware of the growing popularity of craft beer. There are currently over 70 craft breweries/brew pubs in BC and by year end, this number is slated to be closer to 90. Market share for craft has more than doubled in the past four years from 9% of all beer sales in 2009 to 19% in 2013 – this equates to economic growth from $84M to $174M.

According to the Liquor Distribution branch, the figures for the year ended June 30, 2014 shows large breweries’ sales declined for the third straight year whereas microbreweries’ sales shot up 43.4%. These small domestic breweries, which produce up to 1.5 million litres annually, generated $67.4 million in this period; which is an increase of $20.4 million from the preceding year. This growth was stronger than any other alcohol category and these numbers clearly demonstrate that many BC residents prefer craft beer and elect to frequent and support establishments who offer these choices.

Many consumers choose craft beer to support the local breweries/economy and they prefer the freshness, flavour and quality of craft over mass-produced beer. These same consumers often dislike the macro offerings, such as the ones offered in your arena, and would prefer to abstain from drinking at a game/event rather than drinking a beer they do not enjoy. As intelligent business executives, I don’t need to point out that this means lost revenue to your organization.

Your web site indicates that each year over one million guests visit BC Place for football, soccer, concerts, trade shows and other events. Most of these events have Centerplate catering offered however the financial estimates on the next page are focused on the sports events and minimal concerts/other events.
  • Using the average attendance for Whitecaps and Lions games
  • The craft beer drinking population in Vancouver is larger than 5%, as the market share numbers show above, however we will use this as a conservative figure
  • Estimate that these fans would have drank two beers each
  • At $8/beer, the estimated lost revenue is $690,840

Increase any of those multiples and your revenue and gross profits continue to decline.


Whitecaps Ave. Capacity

    20,907

       20,907

Number of Games
18
  376,326
18
     376,326

BC Lions Ave. Capacity

    24,786

       24,786

Number of Games
10
  247,860
10
     247,860

Maximum Capacity

     59,841

        59,841

Other Events*
4
  239,364
8
      478,728

Craft Beer Drinkers
5%
    43,178
5%
        55,146

Beers per person
2
    86,355
3
      165,437

Price per beer
$8
$690,840
$8
 $1,323,496
Total Lost Revenue
* Heritage Classic, 2015 FIFA Women's World Cup, concerts

It is common knowledge that BC Place has a large exclusivity contract which may hinder the ability to allow other breweries to supply to BC Place. In most US jurisdictions, this practice is illegal as it does not provide fair competition to breweries who cannot afford to pay millions of dollars to have the right to provide beer. The practice may be legal in BC but it feels immoral - especially when you share the same neighbourhood with some of these breweries. The BC Lions and Whitecaps organizations have always been supportive of our local communities and by promoting local craft breweries at the stadium, you would be supporting the craft beer industry, the people they employ and the overall local economy.

Many sports venues in the US have successfully integrated craft beer into their offerings including Centerplate managed Safeco Field who, as you likely know, have served craft beer since it opened in 1999. As Steve Dominguez, General Manager at Centerplate indicated to me, “the Mariners are about pleasing their guests and craft beer is so popular, local centric and provides variety.” Seventy percent of the beer offered at Safeco is craft and it outsells domestic 4:1 - in 2013 they sold roughly 11,000 1/2 barrels. Steve advised that sponsorship doesn’t dictate what they make available to their fans but they are cognizant of their official sponsors (MillerCoors, Pyramid) and thus, do not advertise the other breweries.

Safeco has a number of portable beer stations and can offer their fans variety with both macro and craft offerings. I’ve attached the Safeco Field Draft Beer list to give you an idea of how they distribute the multiple brands throughout the stadium. Portable craft beer stations could be an effective way to offer beer variety in addition to selling at the food venues. Your colleagues at Safeco could easily assist with the design and economic model to successfully integrate craft beer into BC Place.

As most of our craft breweries are small, engaging only the breweries who could potentially supply large quantities of kegs would exclude most of the local breweries. Allowing multiple local breweries to sell their beer at BC Place provides variety for the fans and puts less onus on each brewery with respect to supplying kegs.

Lastly, you may be aware of a petition I led to show our local sporting venues that their fans want a craft beer option. I’ve attached the list of 464 signatures as well as their comments.

I thank you in advance for your consideration. If you’d like further information, please do not hesitate to contact me.

Respectfully,

Lynn McIlwee
Sports Fan and Craft Beer Enthusiast

4 comments:

  1. You seem to have overlooked the fact that the 5% will probably drink a macrobeer if that was the only option. It is snobbish to think they will not drink anything but craft beer

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    Replies
    1. How is that snobbish? I don't like the taste of their macro offerings so I don't drink it. I know many who feel the same way - which is the 5%. If I didn't like Pepsi and that's all that was offered, would that make me a snob? I'm pointing out that they're missing an opportunity to please the fans with more selection.

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    2. I support Lynn's analysis here, pretty much any serious craft beer fan that I know who would be in the 5% range would not wait in a beer line at a game for a horrible tasting corn beer. It's not snobbish, it's a reality and that number is growing. However, should craft be offered they would gladly wait in line and pay for a beer at a game and both craft beer and non craft beer fans are happy.

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  2. I totally agree the arena needs craft beer options. I always pre drink or abstain from alcohol when at local events when it is only macro beer offered. One thing you are overlooking though is that the Lions and Whitecaps are only tennents in the arena. It is BC Pavillion Corporation that owns and runs bc place.

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