SBJ/August 27-September 2, 2012/Marketing and Sponsorship

Mello Yello taking over as NHRA title sponsor

Editor's note: This story is revised from the print edition.

A multiyear extension between the NHRA and Coca-Cola will see the company change the brand it features as the title sponsor of the drag racing series from Full Throttle to Mello Yello.

Sources said the deal, which is expected to be announced this week in Indianapolis, will extend Coca-Cola’s sponsorship of the series through 2018. Its current contract was set to end after the 2013 season. It pays $3 million to $4 million annually for its Full Throttle sponsorship and the new deal is in the same range, according to industry sources.

As title sponsor, Mello Yello will be integrated into the NHRA logo used on everything from publications and promotions to driver uniforms. The brand also receives ad inventory during NHRA races on ESPN2 and digital inventory on the NHRA’s website.

The NHRA declined to comment. A Coca-Cola official said that the company always looks for ways to engage new brands in sports sponsorships, but would not discuss the change in brands on the title sponsorship.

It is the second time Coca-Cola has changed the brand it features as the title sponsor of the NHRA’s top series. Powerade sponsored the series from 2001 through 2008. Full Throttle replaced it in 2009.

Sources familiar with Coca-Cola’s decision said the move to Mello Yello reflects the company’s desire to streamline its marketing and sales efforts in the energy drink category and chip away at Mountain Dew’s lead in the citrus soda category.

Coke has used Full Throttle as the NHRA title sponsor in its current deal.
Photo by: ICON SMI
Coca-Cola owns two energy drink brands, Nos and Full Throttle, and its bottling system distributes Monster Energy. Company and bottling executives have said in the past that the number of energy drinks in the company’s portfolio created confusion about which brand should be marketed most aggressively.

The company appears to be phasing out Full Throttle, which has reduced the number of flavors it offers, and focusing its efforts on Nos. The brands have a combined 1 percent share of the $8.1 billion energy drink market, according to Mintel, a global market research company. By comparison, PepsiCo has a 5 percent share, Rockstar a 13 percent share, Monster a 29 percent share and Red Bull a 45 percent share.

By shifting the NHRA sponsorship to its Mello Yello brand, Coca-Cola executives hope the company can chip away at PepsiCo’s leadership in the citrus soda category. Pepsi’s Mountain Dew dominates the category, Coca-Cola has struggled to wrestle away some of its market share.

Mountain Dew and Diet Mountain Dew have an 84 share of the citrus segment in the soft drink category, according to Beverage Digest. Mello Yello’s share of the market is just 4 percent.

“Coke’s tried a number of things,” said John Sicher, Beverage Digest’s editor. “They’re now putting more emphasis on Mello Yello. It’s hard to predict the future. The best thing I can say is that Mountain Dew is formidable and competing against it is going to be challenging.”

Mello Yello was created in 1979, making it Coca-Cola’s oldest rival to Mountain Dew. The brand has a history in racing that can be traced to its NASCAR sponsorship of Kyle Petty’s No. 42 car and the fall Winston Cup race at Charlotte Motor Speedway. It was memorably featured on the car of the fictional driver Cole Trickle in the 1990 movie “Days of Thunder.”

That type of equity and heritage should benefit the NHRA, which spent the last 3 1/2 years promoting a brand that was fourth in its category.

The NHRA also stands to benefit from Mello Yello’s retail strength. Unlike Full Throttle, Mello Yello is distributed in grocery stores and big-box retailers. Coca-Cola in 2010 expanded its distribution of Mello Yello from the Midwest and Southeast to the Northeast and Northwest. That increases the likelihood that the NHRA will have point-of-sale promotions at stores like Wal-Mart, Kroger and other retail outlets nationwide.

Coca-Cola considered using other brands with the NHRA, including Coke Zero, but it ultimately settled on Mello Yello because it felt the sport’s diverse fan base fit the brand’s multicultural marketing efforts. The company also believed the NHRA’s grassroots appeal would help the brand at retail.

Coke has hired Red Moon in Charlotte to work on the NHRA sponsorship. The agency said it couldn’t comment.

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