IN THE NEWS: Smaller sponsors finding new fits in today's NASCARMay 6, 2009
Inside Jay Falls' office, old photos of a Sun-Drop-sponsored car driven by the late Dale Earnhardt cover his walls.
Green and yellow die cast stock cars wrapped in the Sun-Drop logo line his shelves reminding him of a period when small, locally-owned companies could afford to sponsor a car in NASCAR's premier series and the partnerships were forged through friendship.
"Dale used to buy around 10 cases of Sun-Drop a week and he became friends with John King and his family, a local bottler in Concord, N.C. That's how it all started," said Falls, president of Choice USA Beverage, Inc. who today bottles the citrus soda for the Southern regions of South Carolina, North Carolina and Tennessee.
What began as a small agreement between Earnhardt and the local Sun-Drop bottler in Concord grew into a five-year personal endorsement agreement and associate sponsorship of Earnhardt's No. 3 car making Sun-Drop one of the first major beverage sponsors in the sport. Although the company's tenure that began in the early 1990s would not survive.
Since then, NASCAR's sponsorship game has evolved tremendously and today's economic landscape and recession is forcing smaller companies looking for viable fits to find new and innovative strategies.
"We couldn't compete with Coke when they arrived," Falls explained. "Dale [Earnhardt] got pressure to join the Coca-Cola racing family and he was never allowed to renew that five-year contract. We were left out of the sport because we couldn't afford to compete with Coke and Pepsi's resources and the money they were willing to spend."
Through the years, Sun-Drop and its regional bottlers would be approached with new opportunities to rejoin the sport, but none of the sponsor pitches were affordable or worth the expense.
But a recent cold call from a marketer at JD Motorsports, a small-tier Nationwide Series team, has changed all that.
Making it work for the little guy
Sun-Drop is making a return to the sport in nostalgic fashion this summer and is becoming one of NASCAR's growing examples of how smaller companies are creating unique, outside-the-box ways of either maintaining what sponsorship presence they have or creating new ones to increase their brand exposure in an affordable manner.
NASCAR teams cognizant of the economy and shrinking sports marketing budgets are starting to look to these smaller companies for support knowing that the larger companies have either left the sport entirely or can no longer afford to write multi-million dollar checks to cover a team's entire season.
"The door is opening now and teams are willing to talk to companies like us and work with the smaller players in light of the economy," said Scott Hunt, CEO of Hunt Brothers Pizza, who recently purchased six primary races from Richard Petty Motorsports to sponsor the No. 44 car.
We've been cooking pizzas inside the garage area and feeding the teams. A.J. [Allmendinger] has handed out free T-shirts and our brand recognition has increased. Last year at our first race in Talladega everyone asked 'who are you?' That was not the case this year.
-- SCOTT HUNT, Hunt. Bros. Pizza
"If the pricing was what it was three or four years ago, we couldn't have done it," Hunt added. "It's made everyone a little more humble."
To be more efficient with its sponsorship budget, State Water Heaters revamped their strategy and approach.
The company chose to put their resources into a hospitality program created by a Charlotte, N.C.-based marketing agency where driver Ward Burton acts as a trackside tour guide of sorts.
Instead of sponsoring a low-level team with a car that gets little television exposure, State Water Heaters decided to employ Burton as the company's race day representative to entertain the company's guests and most important customers.
Teams and companies are learning to reinvent the sponsorship sale so that both sides are happy. Value for the sponsor can have several different meanings in today's NASCAR.
Hunt said he discussed sponsorship options with several different Cup Series teams in order to increase brand awareness for his growing pizza company located in rural areas and convenient stores.
His first foray into the sport was brief and came in 2008 with Haas Automation. The company sat out at the beginning of the 2009 season to see what the economy was going to do. While the economy didn't really improve much, the sponsorship opportunities and hood space among NASCAR teams did.
The pizza chain decided to go with Richard Petty Motorsports and its new driver A.J. Allmendinger, because the team was willing to accommodate the company's goals.
It could afford to buy six races, but not the costly activation programs required to further reach NASCAR's loyal fans. Therefore, the Petty team helped Hunt with a greater credentialing system that allowed Hunt's larger distributors and potential clients to attend the Cup races.
Meanwhile, Hunt and Allmendinger have used low-budget grassroots activation methods to get the pizza into the mouths of many.
"We've been cooking pizzas inside the garage area and feeding the teams," Hunt said. "A.J. has handed out free T-shirts and our brand recognition has increased. Last year at our first race in Talladega everyone asked 'who are you?' That was not the case this year."
Some economists and marketers note longtime and wealthy sponsors are still pulling out of NASCAR, but there are still a percentage of companies who are spending and even increasing their sponsorship budgets.
Kyle Busch helped push sales for NOS Energy drink through a case-by-case sales incentive program and a $5,000 personal services agreement that started in 2007.
Through NASCAR exposure and Busch's success on the track, the partnership has grown into a $4 to $5 million Nationwide Series sponsorship agreement this season, according to his Motorsports Management team.
At the end of the day, companies know how valuable the loyal NASCAR fan base can be to their bottom dollar.
JD Motorsports has used cold calling as a way to attract sponsors and the team isn't afraid to bring more woman-friendly sponsors into the sport.
In Gaffney, S.C., this week, employees at the Sun-Drop bottling company are celebrating their return to the sport with JD Motorsports and are hoping to grow with young driver Danny O'Quinn Jr. in the Nationwide Series No. 01 car this season.
"We signed a race with Salonwish.com and drove a pink and purple car. We were so happy with the publicity it brought and the salon was thrilled with the TV exposure.”
-- TONY PRISCARO, JD Motorsports
Tony Priscaro, vice president of sales and marketing for JD Motorsports, said the team doesn't have a full-time sponsor this season but he's not worried. Piecing three or more sponsorship deals to fill out the entire season is commonplace, he said.
Priscaro has garnered most of his sponsorship dollars this season through cold calls and calling on untapped sources such as companies who cater to the female demographic.
"We signed a race with Salonwish.com and O'Quinn drove a pink and purple car," Priscaro said. "We were so happy with the publicity it brought and the salon was thrilled with the TV exposure."
And the sponsorship agreement with Sun-Drop, which begins at Lowe's Motor Speedway with a paint scheme similar to what Dale Earnhardt Jr. ran on a Late Model car in Myrtle Beach, S.C., also came to be with a cold call and a face-to-face meeting at the bottling company.
"I told them if you want someone in the top 10, that's not us. But we will qualify for every race and we will get your apparel and merchandise program off the ground and into the stores. They just couldn't find a home where they didn't have to spend millions of dollars," Priscaro said. "We are just honored Sun-Drop chose us, chose our team to make their return to NASCAR racing."
Everyone is leery of the economy and tightening their budgets, but when teams and companies look outside of traditional practices and markets, lucrative partnerships are formed.
"The cost of doing business in NASCAR is high today but there are teams still out there willing to grow with you and that is what we are excited to do with JD Motorsports," Falls said. "We hope to grow with them as they grow."