Beer Manufacturers Hope Digital Rebates Will Boost Sales, Provide Insights

A growing number of beer companies are turning to digital rebate programs to boost volume sales and gain consumer insights as competition for off-premise business intensifies amongst breweries.

The most well-known smartphone-enabled rebate program for alcoholic beverage manufacturers is run by Colorado-headquartered Ibotta, Inc. The company partners with major brands and large chain retailers to offer cash back rebates on everyday purchases like groceries, electronics, clothing, and other consumer packaged goods.

Here’s how it works: Consumers browse the Ibotta app, choose rebates for a variety of products, and then upload receipts from their purchases. Once a consumer redeems a minimum of $20, Ibotta deposits the money into digital wallets such as Paypal or Venmo.

In turn, Ibotta, which essentially functions as a digital advertising platform, generates revenue via a “pay-per-sale” cost structure that includes varying fees based off suggested retail prices. According to the company’s rate card, breweries pay Ibotta $1.85 every time an item that costs between $12 and $20 is sold. Companies can also pay for featured placement within the app. A typical $2.00 rebate offer will end up costing a brewery a total of $3.85 to move a single unit.

There are currently 35 active beer rebate offers on Ibotta for brands such as Samuel Adams Oktoberfest ($2 off a 12-pack), Miller Lite ($4 off a purchase of two 12-packs), Bud Light ($3 off an 18-pack) and Oskar Blues Dale’s Pale Ale ($2 off a 6-pack), among others.

Next month, a pair of beer companies owned by Duvel Moortgat USA — Boulevard Brewing and Brewery Ommegang — as well as D.G. Yuengling & Son will launch campaigns on Ibotta for the first time. Campaigns typically run for a specific period of time set by the supplier, or until a predetermined redemption budget is tapped out.

Meanwhile, Boston Beer Company and New Belgium Brewing, which have previously offered rebates via the app, will also introduce new campaigns in October.

Those beer companies are attempting to reach 20 million users who have already redeemed more than $230 million in rebates across all categories since the app launched in 2012.

“We are enabling the brand to speak directly to the customer and on their mobile phone where the majority of their screen time is now spent,” Ed Brooke, Ibotta’s director of analytics, told Brewbound.

Ibotta currently offers alcoholic beverage rebates in 35 states and Brooke said digital rewards programs allow beer companies to increase brand awareness before consumers even reach the beer aisle.

“You essentially lock in that customer before they get to the shelf,” he said. “If you’re not in the app, then you’re at the mercy of the shelf.”

On average, Ibotta users earn about 20 percent cash back on purchases of alcoholic beverages, Brooke added.

So who’s “brewponing,” as Ibotta has termed it?

The company’s primary beer, wine, and spirits consumers are college educated, 30-year-old males with higher household incomes and no more than two children, Brooke said. And while Ibotta’s user base skews heavily toward female users (about 80 percent), the company has found that male purchasers are more likely to redeem alcoholic beverage rebates.

Over the last year, 31 percent of “young males” redeemed alcoholic beverage rebates compared to 26 percent of women, the company said. Additionally, male shoppers between the ages of 25 and 34 are three times more likely to order alcohol on demand through booze delivery apps such as Drizly or Minibar, which have recently partnered with Ibotta via a “mobile marketplace.”

Meigan Goodwin, New Belgium Brewing’s brand director of retail programming, described Ibotta as a “much more relevant technology for shoppers today” than traditional mail-in rebates.

New Belgium, which began using the platform in 2015, typically features rebates on 6-packs and 12-packs, Goodwin said. Rebates are good for a variety of items, but typically a single brand is pictured inside the app.

“Our brand managers are always asking if their items can be pictured because I think that power of suggestion goes a long way,” she said, adding that featured brands are usually the most redeemed.

But it’s not just the prospect of increasing sales that have larger beer suppliers turning to Ibotta. There’s also an abundance of data up for grabs.

Ibotta provides companies with a number of real-time insights not previously available through traditional mail-in rebate programs, and companies will typically receive purchaser information, including sex and age, as well retail insights such as the state a redemption was made in and the retailer that sold the product.

Once a campaign is complete, Ibotta sends a final report that also includes data on the size of the average consumer’s’ shopping basket who redeemed the offer. The information provided by Ibotta is then used as a tool to sell more beer and stay on the shelf, Goodwin said.

“We can say to them [retailers], ‘When we run a rebate with Ibotta, the average basket size actually goes up, so people are picking up additional beer. This app is incentivizing them to do that,’” she said.

For its part, Boulevard Brewing Company will use its first Ibotta campaign to support a recent nationwide packaging shift of its Smokestack Series beers (Tank 7 farmhouse ale, The Calling IPA, Dark Truth Stout and The Sixth Glass) from 4-packs to 6-packs. The Kansas City-based company plans to offer a $2 rebate on those reconfigured packages starting in October, according to vice president of marketing Natalie Gershon.

“It just felt like a really good opportunity to use this tool to kind of help with that go-to-market strategy,” she said.

Additionally, Boulevard is offering its first on-premise rebate — $1 off Tank 7 — as part of the company’s “Tanksgiving” marketing campaign in November, Gershon said.

“It’s absolutely a total trial and brand-awareness play,” Gershon said

Boulevard is also running a similar rebate on Smokestack Series brands through a competing mobile rebate app, Checkout 51, in October, Gershon said. However, she added that the company is most excited about the potential of the offers via Ibotta.

“They’ve been a great partner, and I think we’re going to scale it a little bit more in 2018,” she said.

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