SBJ/February 28 - March 6, 2011/Marketing and Sponsorship

NASCAR gives boost to spirits category

NASCAR plans to expand the rights it offers its official spirits sponsor, ending its conservative approach to the category.

The sanctioning body’s agreement with Diageo, a seven-year deal valued at $2 million a year, ends this year, and under terms of the current agreement, Diageo can’t refer to itself as an official partner of NASCAR or use the sport’s logo and imagery at retail.

NASCAR Chief Sales Officer Jim O’Connell said the sport will relax those restrictions in 2012 and encourage its partner in the category to promote its affiliation with the sport at retail and in advertising.

The move should allow the sport to increase the sponsorship fee in the category and give the sport more exposure at retail.

“The more activation our partners do, the better for everybody,” O’Connell said. “It helps us reach more fans and helps them get a better return on investment.”

O’Connell said NASCAR is in discussions with Diageo about renewing and hopes that it will stick with the sport. He said that the sport wouldn’t look to break up the spirits category into subsets such as official whiskey. He added, “Our preference is to maintain partnerships. We don’t want churn.”

NASCAR first lifted a ban on allowing liquor sponsorships on cars in 2005. After it did, Jack Daniel’s, owned by Brown Forman; Jim Beam, owned by Fortune Brands; and Diageo’s Crown Royal began sponsoring cars.

Both Jack Daniels and Jim Beam ended their sponsorships in 2009, citing declines in the sport. Diageo’s Crown Royal brand continues to sponsor Roush-Fenway Racing’s No. 17 car driven by Matt Kenseth. That deal ends this year.

Just Marketing International CEO Zak Brown, whose agency manages Diageo’s NASCAR sponsorship, said the spirits company plans to stay in the sport and is evaluating whether it will do so by spending on team, track or sanctioning body partnerships.

Brown said that NASCAR’s decision to loosen restrictions on the category was a positive for the sport and the spirits category.

“With the time that’s gone by, it’s only logical for NASCAR to embrace this category and market with it because they’re great marketers,” Brown said. “It’s the right category to open up and the right time to do it.”

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