Raising their SPIRITS

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During the late 1990s, Seagram Americas put out feelers to Nascar about sponsoring one of its drivers.

Fresh from breaking the liquor industry's decades-old taboo against advertising on TV, the distiller wanted to promote Seagram's 7 Crown whiskey through the increasingly popular sport.

"They said no," recalls consultant Arthur Shapiro, then exec VP-marketing and strategy for Seagram.

Less than a decade later, in 2004, Nascar gave the keys to Jim Beam Brands, Diageo and Brown-Forman Corp. by lifting its self-imposed ban on liquor sponsors.

Since the mid-1990s, the liquor industry has gone from advertising only in magazines and outdoor to hitting cable, local TV and radio. But Nascar could be the biggest marketing venue yet for distillers. Nascar attracted an average of 9 million viewers to televised races of its Nextel Cup Series last year, according to Nielsen Media Research. And more than 13 million fans attended Nascar's Nextel races, Busch Series, Craftsman Truck Series and Dodge Weekly Series in the 2003 season.

Nascar gives distillers a formidable platform to support their brands. But virtually everyone agrees the Nascar link is about long-term brand building more than quick sales pops.

Jim Beam bourbon begins its sponsorship of Robby Gordon's No. 7 car on Feb. 20 at the Daytona 500, the big Nextel Cup kickoff. Being in Nascar "will help [make the brand] top of mind," says Keith Neumann, marketing director-Jim Beam. "Eventually, that leads to Jim Beam becoming a preferred brand choice."

Observers say the distillers' presence in Nascar will help spirits go mainstream, after historically being seen as more sinister than beer and wine. That has translated into more stringent restrictions on advertising. The spirits industry wants to change all of this.

Sense of Equivalency

"If it has an impact, it's at a much higher, strategic level in the spirits industry's efforts to establish a sense of equivalency" with other alcoholic beverages, says a spokesman for SAB Miller's Miller Brewing Co. The brewer backs retiring Nascar racer Rusty Wallace.

There are a couple reasons why Nascar opened the door to distillers. Costs are rising, and Nascar needs to find new sponsors. But the move also reflects the success of spirits marketers since Seagram's snub.

Still barred from advertising on network TV, spirits nevertheless have managed to increase sales and become popular with a younger generation in recent years. Meanwhile, beer has been stagnant.

Brewers have long been Nascar sponsors; Anheuser-Busch, which sponsors rock-star-like driver Dale Earnhardt Jr., has backed the racing association for 25 years.

"After a careful evaluation, we felt the time was right to allow spirits companies into Nascar," a Nascar spokesman says.

By allowing spirits sponsors, Nascar is following the Indy Racing League. And Diageo's Crown Royal already is title sponsor for the International Race of Champions, an all-star series. Diageo has previous Nascar experience with Smirnoff Ice malt beverage. It ran responsible-drinking ads, via WPP Group's J. Walter Thompson USA, New York, that featured Matt Kenseth's pit team breaking down his car as he heads to a party.


The world's biggest spirits marketer plans to leverage its experience now that Crown Royal is backing Kurt Busch, 2004 Nextel Cup champion. It will run brand and responsible-drinking spots on local TV and cable featuring Mr. Busch, says Guy Smith, exec VP-external affairs at Diageo. Grey Global Group's Grey Worldwide, New York, handles.

Brown-Forman is linking up with driver Dave Blaney to support Jack Daniel's whiskey.

While spirits marketers see opportunity, there's risk as well. Seeing a whiskey-themed car zipping around the track at 180 mph could raise objections. Also, Nascar attracts thousands of viewers too young to drink. Nextel Cup coverage on Fox last season drew an average of 742,000 viewers between the ages of 2 and 17, according to Nielsen.

The Center for Science in the Public Interest and American Medical Association have already objected.

Whatever happens, the brewers will be watching. "It puts a premium on us coming up with better programs and more clever ideas to appeal to consumers," says a spokeswoman for Coors Brewing Co., which sponsors Nascar driver Sterling Marlin.