In-Store Digital Ads: Florida Alcohol Law Compliance

The Florida Division of Alcoholic Beverages and Tobacco (the “ABT”)’s Declaratory Statement involving the placement of digital advertising devises in alcoholic beverage retail stores may have important implications for the future of in-store advertising of alcoholic beverage products in Florida.

In 2015, the ABT issued Declaratory Statement 2015-054 in response to the petition filed by Food & Beverage Innovations, LLC (“FBI”). The primary issue decided by the Declaratory Statement was whether digital promotion of alcohol beverage brands on Jevo^TM, a machine used to create “jello shots” using retailer-supplied alcoholic products violates Florida’s Tied House Evil law. The ABT ruled that the Jevo^TM digital display screen was an “electronic sign” that did not violate the Florida law.

The Future of In-Store Marketing

In-store marketing is especially important for the alcoholic beverage industry, which faces high competition, strict regulations, and changing consumer preferences. Alcoholic beverage retailers need to leverage in-store marketing to attract customers, differentiate their products, and encourage impulse purchases.

The market for in-store marketing in alcoholic beverage retail stores is expected to grow as retailers invest more in technology, data, and personalization to enhance the customer experience and loyalty. Some of the trends and opportunities in this market include:

Digital Signage. Digital screens that display dynamic and interactive content, such as product information, reviews, recommendations, offers, or entertainment, can capture the attention of customers and influence their purchase decisions. Digital signage can also be integrated with mobile devices, social media, or loyalty programs to create a seamless and engaging shopping journey. For example, the Jevo^TM machine uses a digital display screen to show operating instructions, cocktail information, and other messages chosen by the licensed retailer, which can help promote the use of the machine and the sales of the flavor pods and alcoholic products.

Augmented Reality (AR) And Virtual Reality (VR). AR and VR technologies can create immersive and realistic experiences that enhance the appeal and education of alcoholic products. AR and VR can also enable customers to try different products, flavors, or combinations before buying them, which can reduce uncertainty and increase satisfaction. For example, some wine retailers use AR apps to scan wine labels and provide detailed information, ratings, food pairings, or stories behind the wines. Some beer retailers use VR headsets to transport customers to the breweries and show them how the beers are made.

Artificial Intelligence (AI) And Machine Learning (ML). AI and ML technologies can help analyze customer behavior, preferences, and feedback, and provide personalized recommendations, offers, or incentives based on the customer’s profile, location, or mood. AI and ML can also help optimize inventory management, pricing, and merchandising strategies based on real-time data and demand. For example, some liquor retailers use AI-powered smart shelves that detect when a product is picked up or put back, and trigger relevant content on nearby screens or mobile devices. Some liquor retailers also use ML algorithms to generate dynamic pricing based on supply and demand, time of day, or weather conditions.

The Market for Jevo^TM Machines

FBI’s Jevo^TM machine was a specialty cocktail device that allows licensed retailers to make edible cocktails, or jello shots, in a variety of flavors and with different types of alcohol. The Jevo^TM machine had a digital display screen that can show operating instructions, cocktail information, and other messages chosen by the licensed retailer. FBI claimed that it did not sell or lease the Jevo^TM machine to licensed retailers on behalf of any alcoholic beverage manufacturer, supplier, distributor or other industry member, nor did it pay or receive any compensation or benefit from any industry member for the use or display of the Jevo^TM machine. FBI also asserted that it did not sell or display any advertising for alcoholic products on the Jevo^TM screen.

FBI’s customers were licensed on-premises retail vendors who sell or serve alcoholic beverages, such as bars, nightclubs, restaurants, hotels, or caterers. These licensed retailers could purchase or lease the Jevo^TM machines directly from FBI and use them to make er jello shots with various flavors and types of alcohol. FBI also sells its proprietary flavor pods to the licensed retailers for use in the Jevo^TM machines. FBI did not have any relationship or affiliation with any manufacturer, distributor, or importer of alcoholic beverages, nor does it sell or display any advertising for alcoholic products on the Jevo^TM screen. Therefore, FBI’s customers were only the licensed retailers who install and operate the Jevo^TM machines on their premises.

What Florida’s Tied House Evil Law says about Marketing

Florida’s Tied House Evil law, found in Section 561.42 of the Florida Statutes, aims to prevent conflicts of interest and unfair practices in the alcoholic beverage industry.

The law places strict regulations on marketing practices to prevent unfair competition and excessive influence by manufacturers and distributors over retailers. Here are the key points:

• Prohibition of Payments: Manufacturers, distributors, and suppliers are prohibited from making payments to alcohol retailers to feature their brands.
• Restrictions on Marketing Services: Marketing companies cannot provide services or benefits to retail vendors if those services are paid for by manufacturers or distributors.
• Ownership Interests: Marketing companies must declare that they have no ownership interest in any retail vendor licensed to sell alcoholic beverages in Florida.
• Advertising Materials: While certain advertising materials are allowed, manufacturers and distributors cannot provide outside signs to retailers.

These regulations are designed to ensure fair competition and prevent large firms from dominating the market through aggressive marketing tactics.

The ABT’s Ruling on Jevo^TM’s Digital Marketing Feature

The Division concluded that the Jevo^TM digital display is a permitted electronic sign that does not violate Florida’s Tied House Evil law, under the following conditions:

• The licensed retailer does not receive any compensation or benefit, directly or indirectly, from FBI or any alcoholic beverage advertiser for displaying content on the Jevo^TM screen;
• The licensed retailer purchases or leases the Jevo^TM machine directly from FBI, without any involvement or subsidy from any industry member;
• The licensed retailer pays the market value for the Jevo^TM machine and the flavor pods, without any discount or rebate from FBI or any industry member;
• The licensed retailer uses the Jevo^TM machine to make edible cocktails for on-premises consumption only, and does not resell or distribute the flavor pods or the edible cocktails to any other person or entity;
• The Jevo^TM machine is not placed in a window of the licensed premises, and the display screen is not intended to be viewed by the public outside the premises;
• The licensed retailer selects the content to be displayed on the Jevo^TM screen, and does not receive any compensation or benefit from FBI or any industry member for displaying any product brands or logos; and
• FBI does not sell or display any paid advertising on the Jevo^TM screen on behalf of any industry member, and does not pay, act as a conduit, or pass through any benefit or compensation to any licensed retailer attributable to any industry member.

The Division declared that the installation and operation of the Jevo^TM machine in a licensed retail location, and the digital advertising offered on the machines, are permitted by Florida’s Beverage Law, as long as the above conditions are met.

Do you have any questions about alcoholic beverage advertising in Florida? Contact us to schedule a consultation with a beverage attorney.

Because we’re attorneys: Disclaimer. Originally posted08/11/2024.

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