Coke and Formula 1

There have been stories kicking around about Coca-Cola coming into F1 for some time. The idea makes no sense if it is related to the main Coke brand as this does not need any more global exposure than it already has and using F1 to engage with fans is not an easy task. However the Coca-Cola Corporation is not a one-trick pony and has a raft of different brands that would fit nicely with F1. The obvious choice would be one of the company’s energy drink brands, so that the company would be highly visible and up against the primary rival in that market, Red Bull.

Red Bull is dominant in the global market with an estimated 40 percent of the market but there is increasing rivalry as other firms try to tap into a market that is estimated to be worth $37 billion a year. The industry reckons that as new markets are developed the money generated will go up to $52 billion by 2016, with the US leading the way with 37 percent of the total, but Asia not far behind with 30 percent. There are still quite a lot of regional players but the world’s leading brands are now Red Bull, Monster and Burn. Red Bull we already know about. Monster is a drink that is owned by Hansen Natural and which has about 35 percent of the market. The third biggest seller is deemed to be Burn, a Swedish drink that has been successful all over the world and is now sold in 80 countries. This is distributed by the Coca-Cola Company and is its most successful energy drink. Thus, if Coca-Cola is planning to come into F1 it is likely to be with Burn.

Talk of the deal going to McLaren is rather misplaced as McLaren has a major partnership going on with GlaxoSmithKline, which markets a number of energy and sports drinks, notably Lucozade.

56 thoughts on “Coke and Formula 1

        1. About 3.5 years of Coca Cola advertising budget, all written off on a schedule, as goodwill amounting, increasing EPS etc. In other words, quite edible, the sums almost vanish. Mateschitz had it very right, when he allegedly said to only go for markets where there was no market. Buying well established market share is very efficient. Spending into the empty night of hopes and dreams is far more risky. But it also means you don;t have ready competitors. I think the thing you must do, if you are pushing into uncharted markets, but ones easier to open, is hold control, until you can go eat other businesses, because the ways the system works, you are inadequately paid for opening a new idea, and overly well compensated for buying out a mimic. In other words, you almost want mimics. Unless you are very novel. That is, assuming you wish to be a public company.

      1. With the reputation Four Loco has I’d be surprised if anyone in F1 would seriously consider sticking their logos on their cars…

  1. Interesting that the GSK branding shifted from Lucozade to Maximuscle half way though the season, is there anything in that, or were they just keen to split the exposure between 2 brands?

    1. I was told this was partly to cash in on the links between maximuscle and the British Olympic squads that they provide sports nutrition for. Also changes in various advertising laws.

    1. My thoughts exactly. I’ve read from other sources (mostly buisness related) that Relentless would be the most likely candidate. Although I’m not sure the two compete in Markets as Relentless seems to be primarily a UK brand. Therefore the sponsorship could likely vary depending on the region of the race.

  2. Joe
    Burn doesn’t sound very suitable for F1. Paerhaps they should try the Church which has had a fair degree of succcess in this area

  3. Despite 7Up sponsoring Jordan in 1991 (and, of course, Red Bull being in F1 since the mid 90s, with Sauber initially), I’m surprised soft drinks companies haven’t had much of a presence in F1.

  4. I think it’s more likely they’d use their Relentless brand. This is actually theirs wheras NOS is produced by them but the brand is licensed and Burn is only distributed by Coke. Additionally, Burn is named differently in Japan (Buzz) which will always make global marketing tricky. With Relentless, Coke have a single brand which they own fully and have already used in a variety of motorsport sponsorship deals.

    Regardless of the brand though, I sincerely hope the recipient is Williams so they can afford themselves more choice of driver! To my mind though, the more likely recipient will be Lotus. They have performed well, they have a driver in Kimi whose character and reputation screams energy drinks and they must be in need of the money with the problems Lotus are in.

    G.

  5. Hi Joe.

    A couple of months ago I heard the rumor that Coke was trying to buy Monster Energy Drink to compete against Red Bull and that Mercedes would be the team selected by Coke to work with.

    I dont know it this make sense or not, can you put some light into this rumour?

    Thanks.

  6. Guess I might have “called it” correctly some months back 😉 Not the best brand name to put on a F1 car, though. I suppose fire hazard has decreased significantly in recent years…

  7. got to be Enstone. merc, ferrari, rbr and mclaren all had their respective energy drink partners. Black livery of the lotus is compatible with the cover image of Burn .

  8. Any ideas on what team Coca Cola might choose to promote their Burn brand with? (Since McLaren is unlikely to be the team that will have this sponsor’s name on the side of their cars? Is Enstone (Lotus) a posibility?)

    Or do you think they want to be a global sponsor and only do track side sponsoring?

  9. So it could be they are to enter F1 but not with McLaren and not as Coke. Great, anything else really insightful to add to that anyone?

  10. Just to add another brand. The McLarens in the FIA GT1 World Championship were entered by Hexis Racing and carried advertising for Hexis energy drinks.

  11. I’ve never even heard of Burn. Do they sell it in Australia? If so then they should really look at a lot more sponsoring and advertising!

  12. In V8s in Aus Monster have a sponsorship deal with Jamie Whincup who drives foe the 888 team. 888 have just lost Vodaphone as their title sponsor and have signed Red Bull as a replacement. Monster are now taking Whincup to court for breach of contract. Fun and games and not enough sleep.

  13. GSK have been making noises about ditching maximuscle recently as it’s a complex legal area sports nutrition and the recent UK decision to apply VAT to sports specific drinks has crushed a lot of that Market. If GSK ditch any of their energy drinks Market it would make mclaren more interesting.

    Agree with many above though relentless is making a big push signing a lot of music stars in it’s ad campaigns so I could see that being a focus.

  14. Over here in the US Burn as almost unknown. At my workplace( a big university) Coca Cola spends big bucks for exclusive drink/branding rights for the school and all sports. The energy drinks on offer are three flavors of Monster and the original flavor of NOS.
    I always thought the reason that Coca Cola did not own Monster ouright was the threat of lawsuits from the occasional death due to misuse. This way they get the profits yet on lawsuits it does not say Coca Cola. The branding is more pervasive in the US than RedBull.

  15. The practice of Coca-Cola here in the States with NASCAR is not to sponsor an individual driver/team but several, with less funding for each. Would that be allowed in F1? Also they did have a a “Powerade Victory Lane” a few years ago where the Pepsi drivers (Jeff Gordon, Jimmie Johnson, etc) either knocked over the Powerade bottles or “forget to go to Victory Lane”. Both companies also pay bonuses if their drivers drink their caramel-flavored sugar water when being interviewed on TV.

      1. So when you write “Burn, a Swedish drink” that should not be interpreted as Burn now being a Swedish drink, merely that it was at some point a Swedish drink?

  16. Joe – you’ve recently done a few blog posts about various sponsorship initiatives. Given this is highly topcial, it would be great if you could do another blog post about where you think the next wave of sponsorship will come from (other than Coke as you mention above). We’ve had the tobacco and alcohol years, now the energy drink and telecommunications years. Whats next?

  17. I’ve lost count of the number of times I’ve heard or read the phrase ‘coke bottle’ to describe the rear end of the cars. Clearly they don’t need to pay for any advertising, even if they needed it!

  18. Coke also has Full Throttle energy drink, which through the end of this season was the title sponsor of the National Hot Rod Association drag racing series. For 2013, Coke is switching that sponsorship to Mello Yello (a Mountain Dew knock-off). Maybe that opens an opportunity to do something else with Full Throttle in the motorsports area.

    1. Ahhh Mello Yello. To me that just means Cole Trickle’s Chevy Monte Carlo in Days of Thunder.

      I once saw a Vauxhall Omega with that livery vinyled on it. I could not stop laughing at the brilliance.

  19. I wonder if we could have an energy war coming, (No, NOT KER’s!!)? AMP energy, owned by Pepsi and already in NASCAR, would be a perfect fit to go up against the other brands. -:)

      1. Joe, do you know if Pepsi has looked at F1 sponsorship or even if it is looking at F1 sponsorship? I’ve seen that Ecclestone said the only time Coke would perhaps get involved with something, other than what they currently do, is if Pepsi got in. This got me thinking because often it seems that when Bernie says to look in one direction, the best thing to do is look another way! Could Pepsi be the drink which comes in before Coke?

  20. If the potential America market is at least marginally important (and surely it would be) to Coke’s increased involvement in F1, I don’t see why they would market brands (Burn, Relentless) which are (more or less) unavailable here…

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