To Sell or Not to Sell

A story caught my eye last week about Kansas State University implementing a pilot program to sell beer to its fans during the six remaining home baseball games of the season.  Several universities have experimented with the concept recently, and now there are approximately 21 Division 1 FBS schools selling beer at their home games.  I thought it would be interesting to examine what we’ve learned thus far.

The University of Minnesota sold beer for the first time in its new football stadium last year, to mixed results.  Sales totaled over $900,000, exceeding expectations and certainly demonstrating the demand is there.  Astonishingly, however, UM claims to have LOST money on the program overall.  The extra security personnel, tents and facilities, as well as equipment rental ate every bit of that $900k.  UM officials admitted to perhaps being overly cautious, but still it is hard to imagine not making money on the sale of alcohol at a sporting event.

West Virginia University’s first year of selling beer at football games profited the athletic department between $500,000 and $700,000 depending on the source.  WVU also said allowing sales in the stadium, along with prohibiting the ability to leave the stadium and return, cut down on alcohol related incidents commonly associated with binge drinking that goes on at pregame and halftime tailgate parties.

A quick glance at other schools showed Bowling Green State University profited between $20k-$25k in 2011, and Kent State University broke even.  Syracuse University didn’t provide sales or profit numbers, but did say that beer sales make up 47% of total concession revenue.

It is difficult to find a consensus regarding the financial impact of selling beer to fans.  Certainly some schools are making money while others are not.  Two major factors appear to be playing into that: 1) pricing – the universities above range from $2/beer to over $7/beer; and 2) non-product expenses – Minnesota invested in large tents with generators, as well as extra security personnel, while other schools added minimal costs.

There does, however, appear to be a consensus that alcohol related issues did not increase as a result of the new policies.  Further, several schools claimed they saw fewer incidents when selling beer in the stadium than they did before.

We’re still fairly early in this growing trend and more data needs to be collected and examined.  But if there is a way to enhance the fan experience, increase revenue, and drive down alcohol related incidents by selling beer in the athletic venues, it won’t be long until a majority of schools will be on board.

Follow Daniel on Twitter at @DanielHare