Sponsor Spotlight: Coke Mengniu Deal Breaks Olympic Record

(ATR) As has been the case before, the latest worldwide sponsorship between Coca-Cola and the IOC is a record-setter.

Unveiled June 24, the sponsorship will extend Coke's IOC sponsorship to 2032, past the 100th anniversary of the beverage maker's first foray into Olympic marketing, Amsterdam 1928.

Joining Coke for this round of sponsorship that begins in 2020 is Chinese dairy products giant Mengniu. While not yet a worldwide brand, Mengniu hopes to capitalize on the Olympic rings and Coke's marketing savvy to help lead the firm to prominence. Mengniu was one of the global sponsors for the 2018 FIFA World Cup in Russia.

The combination of Coke and Mengniu is reported to be worth $3 billion in IOC revenue. If accurate, the deal will be the largest ever struck.

Michael Payne, CEO at Payne Sports Media Strategies was part of the team negotiating this new deal. Payne, who once was marketing director at the IOC, talked withAround the Rings reporterHeinz Peter Kreuzer last week about the background of the deal.

ATR: Is it right, this deal of the International Olympic Committee with Coca Cola and Mengniu was the biggest ever?

Michael Payne: Yes, the biggest since the IOC founded the TOP Program, which was their worldwide sponsorship program I founded when I was marketing director back in the early 1980's

ATR: What was your role by the new partnership?

MP: The program is always been pioneering, looking at new innovation, at responding to the fast moving marketplace. And I was asked by Mengniu after their very successful sponsorship of the FIFA World Cup last year, to look at how they can expand their digital platform using sport for their global development.

Mengniu had an existing strong partnership with Coca Cola and I obviously knew the Coca Cola leadership very well as I negotiated the first Coca Cola TOP-partnership many years ago. As we began to exchange ideas, the clearer it became that there was the potential for a very innovative way to take the TOP program forward for those companies.

ATR: What does it mean, special value for the digital marketing?

MP:It is not just the Olympics, The whole field of digital and data isbecoming a critical component. So all companies in their marketing want to connect with their consumers or in the case of the IOC, how to connect with the Olympic fan base.

Some years ago, the IOC launched the Olympic Channel, and this is really an extension of how you create a digital platform, particularly during the Games on on the web,and on the mobile form. How the fanbase is consuming the Olympics. These used to be driven by the Organizing Committee. The IOC is now centralizing it, so that it can be developed on a global basis.

And so TOP Partners, like Coca Cola and Mengniu, will partner with the IOC to develop and promote the future digital offerings of the Olympic experience.

What is about this new sponsor category, why you don't create two?

MP:Whenever you got in a discussion about new categories, it is always a very technical and complicated area. If you start talking about beverages, that already includes important parts of the dairy business. And Coca Cola and Mengniu are already working together, through the holding company in China, Cofco. Cofco is the largest bottling company for Coca Cola in China, they are also the largest investor in Mengniu.

There was far more to gain on working together then treating it separately. Mengniu in the forefront is maybe surprising to many people. But as the most innovative company in the dairy business and Coca Cola the world largest beverage company, with very strong local distribution systems, there is a lot of common interest. This is a a very long partnership to 2032. So, the leadership decided that there is far more to gain to build on the existing partnership then treat them separately

A Mengniu competitor, Yili, is one of the national sponsors of the 2022 Olympic Winter Games in Beijing. What is now the situation for the local sponsor?

MP:I think there was a little misunderstanding prior to the announcement, particularly on the Yili side. It is very clear, the Coca-Cola Mengniu partnership fully respects that granted to Yili. And their partnerships continues with no interference to the Bejing 2022 Games.

When Mengniu start getting into the details of the sponsorship, drinkable flavored milk, drinkable yogurt, was already excluded from the Yili category because it was part of Coca-Cola's category. Mengniu will announce which markets, which categories, which rights they will activate, their long tern program.

And in the short term, everybody will go out of their way to make sure, there is no confusion in the Chines market and that Yili rights are not in anyway breached or compromised.

Interview conducted by Heinz Peter Kreuzer, June 28, 2019.