Coca-Cola hoping to score big at World Cup
General view of the Arena Amazonia, pictured during its inauguration match between Nacional and Remo, in Manaus, Amazonas, on March 9, 2014 - by Raphael Alves
The US soft-drink giant, facing lower sales in North America, is an official sponsor of the 20th World Cup, considered along with the Olympics as one of the world's top sporting events.
Coca-Cola plans a marketing blitz with commercials featuring football stars and jingles celebrating the football extravaganza. The beverage maker has also sponsored a tour of the FIFA World Cup trophy that will visit 90 countries overall.
"The event is a win-win for Coke," said William Chipps, an analyst at IEG, a leading sponsorship consultancy.
"With an event, especially a global event like the World Cup, that's a very unique platform for global brands. There's only a handful of properties that will allow you to have a global campaign built around it."
- Brazil seen as growth market -
Along with a massive global audience, Coca-Cola has high hopes that Brazil itself will be a major growth market that will make up for headwinds in its huge US market.
Soft-drink consumption in Brazil remains relatively low on a per-capita basis. So far there has been scant attention paid to concerns about potential health ills from the carbonated soft drinks that have hit US sales.
US states such as California and Illinois have proposed taxes on soda. In Mexico, a major Latin American market, the government recently imposed a tax of one peso per liter on soda to counter the risks of obesity and diabetes from the sugary drinks.
Coca-Cola expects to invest $7.6 billion in Brazil between 2012 and 2016 to build its soda-making and distribution businesses.
The Atlanta, Georgia-based giant holds 27 percent of the market in non-alcoholic drinks in Brazil, a sector estimated at $43 billion in 2013 and which could grow by six percent through 2017, according to analysts at Trefis.
Brazil accounted for seven percent of Coca-Cola's sales by volume last year.
- Charm offensive -
The World Cup, which starts June 12, is expected to be watched by four billion fans worldwide, according to IEG.
Major advertising is planned not only for the company's iconic soda brands, such as Coke and Diet Coke, but also for other beverages, like its Dasani water brand and Minute Maid fruit juices.
A commercial spot for Coca-Cola's Powerade sports drink will feature Andre Iniesta, who scored the goal in 2010 that won the World Cup for Spain.
The company will manufacture about 300 million pieces of merchandise with the World Cup logo.
It has also commissioned singer David Correy to record "The World is Ours" with Brazilian band Monobloco.
Coca-Cola says it has already spent millions on early marketing efforts. A spokeswoman declined to disclose the marketing budget.
"The 2014 FIFA World Cup is the most important marketing initiative for the company in 2014 -- in terms of both short-term volume growth and long-term brand-health scores," said Coca-Cola spokeswoman Kate Wharton.
Wharton said the spending would be higher than it was for the 2010 World Cup in South Africa or last year's Europe Cup.
IEG estimates an overall Coca-Cola marketing budget in the "multi-millions," plus $30 million per year in its multi-year partnership with FIFA, the international governing body of association football.
"When you look across the world at consumer passions, one of the things that resonates almost everywhere is soccer," Chipps said, using the American name for football.
"It is an opportunity for Coke to associate its brand with consumers' passion."