Snapple’s sponsorship deal with the City of New York is a real coup. The brand gains significant advertising space and exclusive rights to sell its products in public buildings at a price that will be the envy of other beverage companies. It is likely that similar deals will be springing up elsewhere before long, pushing alternative sponsorship costs up.
The Cadbury-Schweppes [CSG] owned Snapple brand has secured a US$166m deal with the City of New York to become its official sponsor. The deal grants the brand exclusive rights to sell its beverages to 1,200 schools and other public buildings and to advertise on public transport and rubbish bins.
While at first glance the high price of the deal seems like a triumph for the debt-laden city, Snapple too has reason to celebrate. The brand gains significant outdoor advertising space, and with it a golden opportunity to strengthen its ties with its home city.
Most importantly, Snapple gains total distribution rights to New York’s schools. Its products will have exclusive access to the crucial child and teen market for five years, giving Snapple the chance to acquire lifelong customers in a competition-free environment. The brand is readying 6,000 vending machines for installation into schools and other public buildings.
This deal highlights a trend towards more creative and unusual sponsorship, and away from typical associations with sports. Sports and arts sponsorship fees have risen at compound annual growth rates (CAGRs) of 9.9% and 10.1% respectively between 1997 and 2001 in the US.
However, it is these more unusual types of sponsorship that are growing fastest. Alternative forms of sponsorship cover a range of areas including cultural events and support for good causes. They have risen at a dramatic CAGR of 21.7% between 1997 and 2001 and accounted for 22% of all sponsorship fees in the US in 2001.
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Although major sports continue to be very popular for event marketers to target, they incur increasingly excessive sponsorship costs and growing levels of ‘clutter’ from other sponsors.
New forms of sponsorship do not have ‘settled’ market prices and skilled negotiators can secure good deals before others start jumping on the bandwagon. Expect other beverage companies to secure similar deals with other regions in the US – and expect the price to start rising.
