Brands Don't Owe You Anything

Back Bar USA is a beverage marketing and consulting firm with over three decades of experience working with beer, wine and spirits brands. The founder, Tim Haughinberry, resigned as president and CEO nearly two years ago. However, he’s still the owner and bills himself—only partially in jest—as the chief creative officer.

Haughinberry has held nearly every position in the hospitality industry and is an expert in the three-tier distribution system. He got his start after moving to Las Vegas 18 days short of turning 21. He’s bussed tables. He worked his way up from barback to bartender. After working for a liquor distributor and eventually climbing his way into upper management, he worked for the world’s largest cigar distributor. Haughinberry has also worked as a liquor brand broker.

The Back Bar USA owner founded and operated Monte Cristo Rum for ten years, building it into one of the top rum brands in the world. Monte Cristo was named Rum of the Year, Best Rum, and won five double-gold medals in its lifetime. In fact, as the number four-selling rum in the state of Nevada, Monte Cristo more than held its own against the likes of Bacardí, Cruzan and Captain Morgan.

“It was quite successful…in everything but profitability,” quips Haughinberry. “My dreams of being a multi-millionaire-slash-billionaire crumbled overnight.”

So, he got himself a business card that said he was a consultant “because that’s what you’re supposed to do—you can’t look unemployed.” As Haughinberry says, the consultancy started as a joke…but not really. Through hard work, leveraging the relationships—and results—he and his partner had developed with brands, and investing every dollar back into the company, Back Bar USA grew.

“Everything I learned from that first day as a busboy to a barback to a bartender to sales rep to a manager to my own brand and success and failures is what my consultancy was all about. So, I can help almost everybody in the industry of beverage from operations to marketing to sales to distribution,” says Haughinberry.

He and Back Bar USA are now more focused on the marketing side of beverage programs in national accounts. Haughinberry and Back Bar USA have developed an impressive portfolio in the boutique hotel, nightlife and fine dining segments of this industry. A portfolio that boasts demographics and tastemakers appealing to spirits, beer and wine brands.

Read this: 4 Bar and Restaurant Marketing Myths Busted

Haughinberry perhaps didn’t realize it for many years but throughout his multi-faceted hospitality industry career he was creating a business model involving a portfolio that beverage brands could tap into in its entirety. He came to understand that such brands are obsessed with budgets and that he and Back Bar USA can maximize brand dollars and results.

He also learned that operators—he owned a bar on Water Street in Henderson, NV, for 10 years—need to work with beverage brands that fit their concepts. A spirit company, for example, isn’t interested in spending dollars in a bar that has come up with a “promotion” with a tenuous (at best) relationship to its products. In particular, the big brands aren’t moved by a bar, nightclub or restaurant owner’s strong-arm attempt at securing marketing dollars.

“Just because you sell it doesn't mean they owe you something,” says Haughinberry.

Tito’s, he says, is the perfect example for illustrating how an independent operator should approach and work with a spirit brand. It’s the vodka (and likely overall spirit) ordered the most by guests. The small business makes a product that sells in every segment, from dive bars to ultra-luxe restaurants.

So, what do they owe operators? Tito’s does their part by making sales in bars, restaurants, nightclubs, stadiums, hotels, theaters and other hospitality venues across the world.

“Mark it up two bucks. It’s called a premium. It should be your most profitable item,” advises Haughinberry. “Get rid of your DeKuyper shots at a dollar and jack up anything that says Tito’s, and never put it on special, never put it on price. Because if you’re only bringing people in for a cheaper drink, you’re probably in the wrong business.”

The fact is that beverage brands owe operators consistent products and not much more. An operator seeking to leverage a brand and their promotional budget for his or her bar’s marketing initiatives needs to know when to strike. That means researching the spirit, beer and wine brands a venue carries year-round to learn which of those match up with the concept, and how. It means knowing how well a product sells before reaching out to the brand.

For instance, when Haughinberry owned his bar in Henderson, NV, he knew his numbers and he knew his brands. The bar, Gold Mine Tavern, saw between 50 and 100 people a day. He knew it made about $1,500 per day, on average. And he also knew that once a year the Super Run Car Show took over the street on which Gold Mine was located. The car show attracts 100,000 people and the bar’s sales numbers jump from $1,500 up to $12,000 or $15,000 per day for three days.

Read this: Produce Big Marketing Results with a Small Budget

When Super Run was approaching, that’s when Haughinberry reached out for brand support. He rarely hosted special events, so he informed brands that he didn’t have banners, tables, tents, DJs, etc. But the brands—they have all of that and more. And what brands did he ask for help?

“You use the brands that you’ve been carrying all year and you only ask them once a year for that stuff. Because you know it’s your busiest day. You know if you can pull in that twenty thousand without spending five to six thousand on tents and tables and chairs and a DJ and [speakers] that’s all profit for you,” explains Haughinberry while rejecting the strong-arm approach that’s likely to result in a resounding rejection (and is likely illegal). “Instead of every single week going, ‘Hey, man. Can you pay for my DJ or I’m not going to carry your Crown Royal?’”

The bottom line is that it all comes down to the rapport an operator builds with brands. An operator who’s always just asking for something from brands and not giving anything back isn’t developing a relationship. Failing to nurture these mutually beneficial relationships hurts the operator in multiple ways.

Let’s say a brand chooses to pass on spending marketing dollars at a bar. In retaliation, perhaps because their ego is bruised, the operator decides to discontinue selling that brands products. All that accomplishes is that the venue no longer offers a product the guests want, meaning sales are affected negatively. It’s just not smart business. And that's to say nothing of pay-to-play laws—it's not worth an operator running afoul of the TTB and possibly losing their liquor license. The TTB has just over 50 cases under investigation currently, making it clear that they're paying careful attention to pay-to-play schemes and will certainly prosecute.

2019 Nightclub & Bar Show attendees will have the opportunity to learn about building relationships with brands, securing promotional dollars for marketing initiatives, avoiding pay-to-play violations, and much more from Tim Haughinberry. Register here now!