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IMG College, Keurig brew national deal
Published September 23, 2013, Page 3
The arrangement grants Keurig, which manufactures single-serve coffee and tea makers, sponsorship rights to 25 schools across the country during the first year of the deal, 27 schools in year two and 29 schools in year three. The schools that are part of the deal right away include Texas, UCLA, Arizona, Florida, Georgia, Nebraska and Pittsburgh, some of the largest college properties in IMG College’s 80-school portfolio.
Keurig also obtained licensing rights to 11 schools, which will enable it to produce its sleek single-serve coffee makers in the colors and marks of those schools. IMG's Collegiate Licensing Co. will be the licensing agent.
Terms of the agreement, which took six months to negotiate, were not available, but industry experts said the spend for a multiyear deal of this magnitude would likely be in the $5 million-a-year range.
IMG College had not closed a national sponsorship deal since early September 2012 when it signed Lowe’s and Hershey. It also has national deals with UPS, Hyundai and MillerCoors, deals that were struck in 2011. IMG College defines a national deal as one that includes 25 or more schools and geographically covers schools from coast to coast.
Keurig, a brand belonging to Vermont-based Green Mountain Coffee Roasters, has faced mounting competition in the single-serve category in the last two years. In 2011, Keurig dominated the space with close to 75 percent market share, and its K-Cup packs of coffee, another Green Mountain brand, were one of the few options available for coffee drinkers who wanted just a single cup.
As the popularity of the single serves grew, other companies moved into the space. Starbucks last year introduced its own single-serve coffee maker, as did Bunn and other manufacturers. That has increased the pressure on Keurig to respond, and the agreement with IMG College marks the company’s first big sports sponsorship deal.
“Reaching college students is a great way to build the brand with the next generation,” said Dwight Brown, senior vice president of marketing at Green Mountain.
Keurig’s deal will provide signage in football stadiums and basketball arenas, advertising, and more than 50 sampling opportunities at big events on these campuses. The company also intends to use the sponsorships to help the Keurig brand grow beyond its Northeast roots. Keurig will use the Texas deal as a platform to reach the Dallas market. The same for UCLA in Los Angeles. Keurig will maintain a strong presence in the Northeast, with Rutgers, a new IMG College property, St. John’s and Delaware.
“The real hook here is that they want to teach the next generation of coffee consumers to drink one cup at a time, not by the pot,” said Andrew Judelson, IMG College’s senior vice president of national sales and the point person for the negotiations.