IEG SPONSORSHIP REPORT THE LATEST ON SPORTS, ARTS, CAUSE AND ENTERTAINMENT MARKETING FEBRUARY 27, 2017 WWW.IEGSR.COM SPONSOR PROFILE HOW UNCLE RAY S HAS FOUND SUCCESS WITH MINOR LEAGUE BASEBALL Potato chip brand finds success using MiLB as a B2B and B2C marketing platform. Minor League Baseball is playing a key role in Uncle Ray s growth strategy. And if sales are any indication, the strategy appears to be working. Sales of the potato chip brand rose 14.6 percent in the year-ended Jan. 22, easily beating the 1.51 percent increase in the overall potato chip category, according to IRI, a Chicago-based market research firm. If that wasn t enough, Uncle Ray s was the second fastest growing product in the category behind Ruffles Sabritas potato chips (17.37 percent). Uncle Ray s in 2016 became the official potato chip of MiLB with category exclusivity at the league level. A key component of the partnership centers on MiLB s ability to integrate brands into the ballpark experience sales rights at concession stands. MiLB announced the partnership on National Potato Chip Day (March 14, 2016). By Opening Day, more than 60 ballparks were serving Uncle Ray s. Below, Kurt Hunzeker, MiLB vice president of marketing strategy & research, discusses how Uncle Ray s uses the sponsorship as a B2B and B2C marketing platform, how the partnership benefits MiLB clubs, and other topics. How Uncle Ray s activates the partnership. The MiLB partnership is a cornerstone of Uncle Ray s growth and market penetration strategy. To show its commitment to MiLB, Uncle Ray s put the MiLB logo and its official designation on millions of product packages. MiLB provides both scale and depth in our national partnership activations. For clubs that didn t already have a preexisting partnership in the potato chip category, they provided digital signage, PA announcements and video board displays to promote Uncle Ray s and its official designation. 2017 IEG, LLC. ALL RIGHTS RESERVED. 1
In markets where Uncle Ray s wanted a deeper activation to boost awareness i.e. more touchpoints, retail passthrough, etc. we added more marketing assets, such as the Uncle Ray s Way Play of the Day game content, multiple sampling nights and live radio spots during game broadcasts. These target markets also agreed to exclusively sell Uncle Ray s potato chips inside their respective ballparks. In our first year with Uncle Ray s, the market selection was based on geographic areas where Uncle Ray s had existing retail partnerships primarily near Uncle Ray s headquarters in the Detroit/Great Lakes region and throughout the Carolinas. The MiLB partnership and marketing activations helped fortify these existing retail relationships by driving MiLB attendees and fans to those stores to purchase Uncle Ray s. But the big focus for the partnership was leveraging Uncle Ray s chips being consumed in MiLB ballparks by millions of fans MiLB drew more than 41 million in 2016 to not only gain increased shelf space with existing retailers, but tap into new markets Uncle Ray s was targeting as well. Based on key learnings last year, we have definitely seen a greater buy rate by our clubs for Uncle Ray s delicious tortilla chips, and expansion into areas long dominated by other potato chip brands, namely in Texas, the South and out West. The league s take on potato chips as a sponsorship category. Group sales are a big part of our clubs business each season. With some meal plan included in it, MiLB ballparks purchase pallets upon pallets of certain types of products for each homestand including hot dogs, buns and potato chips/tortilla chips. With this in mind, we set the business development strategy in 2015 to specifically target brands that were endemic to the MiLB ballpark experience. Our clubs were spending significant amounts of money on both potato and tortilla chips, and only a handful of them had what you would consider a strategic partnership with their potato chip provider. The potato chip business was primarily a vendor relationship, and we felt that a dynamic brand could seize upon the opportunity to capitalize on our unparalleled scale we have 160 clubs, covering 75% of all Americans and truly own one of the food staples in our ballparks all season long. To win the clubs business, Uncle Ray s sent boxes of its chips to all 160 clubs front offices so everyone could taste how delicious Uncle Ray s potato chips are. This alone converted clubs, as did the significant operational cost savings our clubs experienced because Uncle Ray s was far more affordable than what the clubs had been paying their previous provider. We calculated the cost savings to be more than 30 percent for the clubs. It s tough to beat a brand with the best tasting product and the best prices in the marketplace. How the partnership came about. II was actively engaged with a couple of potato chip brands when my old boss from Rawlings Sporting Goods, Robert Parish, called me and told me about his new position working for H.T. Hackney, a privately-held company that owns a number of brands, include a regional potato chip company based in Detroit. Robert always has progressive visions about where brands can go, and clearly saw potential for Uncle Ray s to really make a big splash because of its great taste. He called me in late 2015 inquiring about opportunities to access both MiLB s ballparks/concessionaires (B2B) and MiLB s fans (B2C) as a springboard for Uncle Ray s sales and marketing plan. As they say, the rest is history. 2017 IEG, LLC. ALL RIGHTS RESERVED. 2
IEG SPONSORSHIP REPORT THE LATEST ON SPORTS, ARTS, CAUSE AND ENTERTAINMENT MARKETING FEBRUARY 27, 2017 WWW.IEGSR.COM SIDEBAR SPONSORSHIP HOT BUTTONS IN THE POTATO CHIP CATEGORY Sales rights, retail platforms and digital content are key drivers in the salty snack category. With sales in the category growing an anemic 1.51 percent, potato chip marketers are increasingly using sponsorship to gain a point of differentiation and offset competition from healthier snacking options. Recent deals include Lay s and the Color Run 5K series, Kettle Brand and the Meadows Music & Arts Festival and Uncle Ray s and Minor League Baseball. Below, five tips on selling the potato chip category: Provide platforms for retail promotions. Potato chip brands frequently use sponsorship to access IP, tickets and other asserts that can be used to drive excitement in the supermarket aisle. Uncle Ray s, for example, promotes Minor League Baseball on millions of packages, while PepsiCo has leveraged the NBA with the Ruffles Home Court Advantage, a promotion that offered consumers the opportunity to win a fan cave makeover and other prizes when their favorite team wins at home. Consumers entered the promotion by entering a package code on a dedicated microsite and selecting their favorite team. Offer content for social amplification. Like other companies, snack food makers look to activate sponsorship with digital and/or social media content. Ruffles, for example, supports the majority of retail promotions around its NBA sponsorship with digital and social extensions. Case in point: Ruffles this month activated the NBA and Black History Month with Team Up for Change, a promotion that offered fans the opportunity to win tickets to an NBA game for themselves and their friends and family. Consumers entered the promotion by submitting their star line-up (people who support them in life) on a dedicated web site and sharing the info on social media. Ruffles made a donation to the Thurgood Marshall College Fund for each submission. 2017 IEG, LLC. ALL RIGHTS RESERVED. 3
Ruffles is putting the final touches on a promotion dubbed Couch to Courtside that will run through the NBA Playoffs and Finals. Offer sales rights. Potato chip companies sometimes leverage sponsorship to access on-site sales rights. Minor League Baseball secured Uncle Ray s in large part by offering sales opportunities in MiLB ballparks. Provide sampling opportunities. Potato chip companies frequently use sponsorship to promote their latest flavors and products. Kettle, for example, activated the Meadows music festival with the Kettle Chips Tent. Consider regional brands. While Lay s, Ruffles and Pringles dominate the national landscape, the rest of the category is largely comprised of regional brands. Utz, for example, is a prominent brand in the Northeastern U.S., while Golden Flake is dominant brand in the Southern U.S. Utz acquired Golden Flake in 2016. THE TOP TEN BRANDS IN THE POTATO CHIP CATEGORY Brand Dollar Sales YOY% Change Dollar Share Lays $2.1B 0.89% 29.78% Ruffles $802M 8.77% 10.96% Pringles $724M 3.17% 9.89% Wavy Lays $533M (5.84%) 7.29% Private Label $503M 5.12% 6.87% Lays Kettle Cooked $372M (1.17%) 5.08% Cape Cod $258M 8.05% 3.53% Utz $232M 1.64% 3.17% Kettle $198M 5.01% 2.71% Herrs $101M (6.73%) 1.38% 2017 IEG, LLC. All rights reserved. Sales in supermarkets, drug stores, mass market retailers, gas/c-stores, military commissaries and select club and dollar stores in the 52-weeks ending Jan. 22, 2017, per IRI, a Chicago-based market research firm 2017 IEG, LLC. ALL RIGHTS RESERVED. 4
IEG SPONSORSHIP REPORT THE LATEST ON SPORTS, ARTS, CAUSE AND ENTERTAINMENT MARKETING FEBRUARY 27, 2017 WWW.IEGSR.COM CATEGORY UPDATE TOURISM MARKETERS DRIVE NEW SPONSORSHIPS Rightsholders should target tourism offices seeking access to potential out-of-town visitors. The strong economy and growing discretionary income is driving new sponsorship activity on behalf of tourism offices. Case in point: The Atlanta Dogwood Festival presented by PNC Bank this year has secured deals with two tourism organizations: Kentucky Tourism and the Smoky Mountain Tourism Development Council. The festival also has had discussions with three or four other tourism offices about potential partnerships. We have received inquiries from drive-market Southeast tourism destinations over the years, as Atlanta is the number one draw for many of them, but it s definitely picked up recently, said Rick Kern, owner of MixIt Marketing, a sponsorship sales agency that represents the festival. Other tourism offices focus on in-market events to promote their offerings. Visit Delaware in 2016 inked a three-year sponsorship of the Firefly Music Festival in Dover, Del. as a platform to drive tourism to The First State. The partnership includes two branded beach volleyball courts in the hub and cross-promotion through social media. Visit Delaware views Firefly as not just an opportunity to bring 90,000 people to a music festival but as a chance to show attendees more of what makes Delaware great. The heavily branded sand volleyball courts remind people the state has incredible beaches just 45 minutes south of the festival site. The tourism office wants to spark in campers minds the idea of coming to Delaware for a few days before the festival or staying for a few days after it ends, said Linda Parkowski, Delaware Tourism Director. While Visit Delaware uses multiple media platforms to promote its travel offerings, the office uses sponsorship to speak directly to a captive audience. Not only does the sand volleyball experience and the surrounding branding give attendees a constant visual reminder of all the fun Delaware has to offer beyond the festival, it also gives staff working the courts time to talk with individuals one-on-one about the state and its great tourism offerings. 2017 IEG, LLC. ALL RIGHTS RESERVED. 5
Visit Delaware sponsors a number of other events and organizations. To help promote the office s Beer, Wine & Spirits Trail, Visit Delaware sponsors the Delaware Brew Bus, a bus that takes consumers between breweries, wineries and distilleries in the central part of the state. The tourism office also sponsors table umbrellas at Constitution Yards, Delaware s first-ever beer garden, and branded umbrellas at three beaches via a partnership with the state parks system. Visit Delaware also is a sponsor of the new DE Turf, a 12-field sports complex aimed at bringing more sports tourism to the area. 2017 IEG, LLC. ALL RIGHTS RESERVED. 6
IEG SPONSORSHIP REPORT THE LATEST ON SPORTS, ARTS, CAUSE AND ENTERTAINMENT MARKETING FEBRUARY 27, 2017 WWW.IEGSR.COM EMERGING CATEGORY DIRECT-TO-CONSUMER WINE COMPANIES UNCORK NEW SPONSORSHIPS Wine companies increase use of sponsorship to promote DTC sales channel. FedEx and UPS aren t the only companies benefiting from the growing popularity of direct-to-consumer wine sales. A growing number of rightsholders are benefiting as well. Case in point: Winc last month announced a new partnership with the Barclays Center that affords status as the venue s official wine sponsor. The sponsorship follows a partnership with the Hollywood Bowl in 2016. From all appearances, DTC wine is here to stay. DTC wine shipments rose 18.5 percent to $2.33 billion in 2016, according to the 2017 Direct to Consumer Wine Shipping Report, a collaboration between Sovos ShipCompliant and Wines & Vines. There is no better way to describe the performance of direct-to-consumer shipments in 2016 than explosive, according to the report. The report attributes growth of DTC wine to three primary factors: The strong economy and more discretionary income The growing number of states that have relaxed laws on DTC wine A five percent increase in the number of U.S. wineries Further demonstrating the popularity of the DTC sales channel, DTC wine sales outpaced retail sales growth by more than three-to-one in 2016 despite an uptick in the average price per bottle, according to the report. Forty-five states and the District of Columbia now allow direct wine sales in some form, including relative newcomers Massachusetts, South Dakota and Pennsylvania. California is the leader in winery to consumer orders (representing nearly a third of all direct shipping orders) while Ohio leads the way in most orders per capita. Winc which launched as the world s first personalized wine club in 2012 under the name Club W before transitioning into a full-stack wine company in 2014 uses sponsorship to engage young urban professionals. Winc ships to 43 of the 44 states that allow DTC wine sales and also sells through on-premise accounts. 2017 IEG, LLC. ALL RIGHTS RESERVED. 7
As such, pouring rights are a key component of Winc partnerships. The company sells through all premium outlets in the Barclays Center including the Billboard Lounge, Honda Club and the AMEX Centurion Lounge, as well as its own wine bar. Our partnerships are primarily about exposure, but we also want to put our wine in the hands of valuable consumers. We feel that our brands bring added value to beverage programs by providing high quality-to-price-ratio wines, great branding and design, correct expressions of varietals and appellations and smart, organically distributed brands across the U.S. market, said Alex Stuempfig, Winc director of sales. The company plans to expand its sponsorship portfolio with other venues, he added. We look forward to continuing to cultivate partnerships in venues that value our branding, share a consumer base and are looking for the unique opportunity to have an exceptional portfolio of wines within their venue. 2017 IEG, LLC. ALL RIGHTS RESERVED. 8
IEG SPONSORSHIP REPORT THE LATEST ON SPORTS, ARTS, CAUSE AND ENTERTAINMENT MARKETING FEBRUARY 27, 2017 WWW.IEGSR.COM SPONSOR PROFILE HOW MALIBU RUM IS USING MUSIC FESTIVALS TO SUPPORT ITS BRAND ETHOS Rum brand finds success using experiential marketing to connect with consumers. Malibu Rum is finding success using music festivals to bring its brand to life. The Caribbean rum brand uses the festivals to engage consumers, gain brand advocates and support its summertime ethos, said Ashley Schachner, Pernod Ricard director of experiential marketing. Malibu Rum is about summer fun. We want to give consumers an enhanced summer experience that no other brand can provide. The brand this year will use the fests to promote its 101 Days of Summer tagline. Malibu Rum kicked off the music festival push in 2015 via a partnership with Live Nation and seven country music festivals. The brand has since diversified its portfolio with a mix of country music and pop fests. Malibu plans to sponsor eight festivals this year beginning with the April 7-9 Tortuga music festival in Fort Lauderdale, Fla. The brand will follow up the event with Stagecoach (Indio, Calif.); Hangout (Gulf Shores, Ala.); Neon Desert (El Paso, Texas); Firefly (Dover, Del.); Faster Horses (Brooklyn, Mich.); LouFest (St. Louis) and Route 91 Harvest (Las Vegas). LouFest and Neon Desert are both new for 2017, said Schachner, who will use the latter festival to test engagement with Hispanic consumers. Pernod Ricard picked the festivals based on several factors including their location in key markets (California, Florida, New York and Texas), brand alignment (festivals that take place on a beach, etc.), and feeder markets (Firefly draws attendees from Delaware, New Jersey, New York and Pennsylvania). The spirits giant activates the festivals with the Malibu House, a Key West-inspired beach house where attendees can purchase cocktails made with Malibu Rum and, in some cases, other beverages. Pernod Ricard works with festival concessionaries to determine what drinks are poured in the experiential buildout. 2017 IEG, LLC. ALL RIGHTS RESERVED. 9
Pernod Ricard enhances the Malibu House experience with free Wi-Fi, Snapchat filters, photo booths and push notifications delivered via festival apps. For example, the company last year ran a one hour Malibu Magic Hour promotion that touted a signature pina colada cocktail in a branded coconut cup. More than 75,000 people visited the Malibu House in 2016, said Schachner. The idea for the Malibu House follows partnerships with Maroon 5, One Republic and other artists. We have played with tour and artist sponsorships in the past, which led us to the idea of a standalone Malibu experience, said Jeffrey Moran, Pernod Ricard vice president of influencer engagement and marketing activation services. Although Malibu Rum has moved away from major artist tie-ins, the brand continues to work with talent for the Malibu House. While we re festival-forward, we have an open line item to bring in a local DJ or other talent. Moran and Schachner serve as an in-house activation resource for Pernod Ricard brands as part of the company s influencer engagement and marketing services group. Pernod Ricard also activates the festivals with sales promotions. The company this year will compliment a national consumer sweepstakes that dangles tickets to the Sep. 29-Oct. 1 Route 91 Harvest festival (among other prizes) with in-market ticket promotions around other sponsored fests. The company will tout the festivals and promotional offer on point-of-sale displays and other marketing collateral. We re thrilled our local marketing teams have embraced this as a marketing platform, said Schachner. 2017 IEG, LLC. ALL RIGHTS RESERVED. 10
ABOUT IEG AND ESP PROPERTIES IEG has shaped and defined sponsorship over three decades. It is the globally recognized source for industry insights, trends, training and events via sponsorship.com, its annual conference, online publications, trend reports, surveys and webinars. IEG is part of ESP Properties, a WPP company. As a commercial and creative advisor for rightsholders, ESP Properties helps organizations unlock greater value from their audiences and brand partnerships. Our consulting team assesses and advises how to grow the value of rightsholders commercial programs. We do this through a full range of services across data, digital and content development to better understand audiences and create more relevant ways to engage with them. This provides brand partners with new ways to connect with communities of fans and followers, growing the potential value of commercial partnerships. Our sales team provides partnership strategy and sales representation to the world s most active sponsors, within and beyond the WPP network of brand clients. Through WPP we have extensive contacts and deep insights into what it takes to create successful partnerships. INSIGHTS EVALUATION GUIDANCE IEG LEADS THE WAY IN SPONSORSHIP ANALYSIS, INSIGHT, VALUATION & MEASUREMENT WWW. SPONSORSHIP.COM For more information about IEG and the sponsorship industry, please visit www.sponsorship.com, www.espglobal.com, or call +1 312 944 1727. 2017 IEG, LLC. ALL RIGHTS RESERVED. 11