Chivas allies with China's first team in the America's Cup

Yachting connection appeals to upscale consumers

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SHANGHAI--Pernod Ricard has turned to one of the most traditional western sports, yacht racing, to raise the profile of its Chivas Regal whisky brand within China.

The America's Cup, held every four years, kicks off next month in Valencia, Spain with 12 sponsored country teams, and will continue in stages through July 7. Dating back to 1851, the America's Cup is one of the oldest sports trophies in the world. Although China was a major naval power hundreds of years ago, sailing remains largely unknown there today, despite its vast coastline.

"This is the first time an Asian team is participating in the America's Cup and the fact that it's from China is quite amazing," said Shanghai-based Han Zantingh, Pernod Ricard's brand director for whiskies in China. He is promoting the sponsorship through advertising and a series of themed sailing parties around the country.

No one expects the Chinese team to win. Even its organizers say their goal is merely to get China on the international stage for sailing at the highest level and for the team's members to learn the sport. Established by a consortium of Chinese and French backers in 2005, the Chinese team has only won about 6% of its races and in the America's Cup, it will be going up against the best sailors in the world.

But winning isn't the point for China, or for Pernod Ricard. As the 2008 Olympic Games in Beijing draw closer, China is investing in as many sports as it can to raise the profile of its athletic program, its growing confidence as part of the international community and a flourishing economy. The team also ties into China's Olympic program, since it is headquartered in seaside Qingdao, home of China's Olympic Sailing Center. Many of the Chinese sailors on the America's Cup team are likely to represent China during the games.

Team China is a "new historical event in the development in Chinese sailing. It is not only the first America's Cup Class boat to be made in China but also a perfect combination between courage, passion, technology, innovation and team spirit. China is a nation of dragons," said the team's president, Wang Chaoyong, at the boat's christening on March 7 at the China Team base in Port America's Cup, which Chivas helped build near Valencia.

Mr. Wang's unabashed confidence is mirrored in the attitude, and drinking habits, of affluent Chinese. The mainland is home to 320,000 millionaires, and many less affluent consumers, who are avid consumers of whisky.

Sales in the upscale bars, clubs and karaoke/entertainment zones called KTV bars they frequent represent big business for Pernod Ricard. Chivas accounts for about half of all imported whisky sales in China and is the leading premium brand in the mainland among all spirits, not just whisky.

But competitors are expanding aggressively. Diageo, in particular, has invested heavily in advertising and events for its Johnnie Walker whisky brand, including dozens of parties in more than 30 Chinese cities last year to promote its sponsorship of a Formula One auto racing team.

The French company also realizes that Chinese, who did not grow up with foreign brands, like to experiment and that trends change quickly in that fast-evolving culture. Associating Chivas with the America's Cup, the company hopes, will help it maintain the brand's stranglehold on China's imported whisky market.

Pernod Ricard has added a sailing theme to its ongoing "This is Chivas Life," campaign in China, and a TV commercial promoted its affiliation with Team China. Created by TBWA Worldwide, Shanghai and filmed in Spain, the spot shows the team's yacht, Longtze, (which means "son of a dragon" in Chinese), adorned with the Chivas branding. It also created a web site,, to educate Chinese consumers about sailing, developed by, TBWA's interactive agency.

Since last fall, Chivas has organized 60 large themed parties and 150 smaller events, hosting up between 500 and 1,500 people at a time. The events, organized by TBWA's Tequila division, spanned about 60 cities, ranging from Shanghai to less-sophisticated tier two and three cities. Venues were transformed into Chivas-themed bars with live entertainment, hostesses, a replica of Team China's boat, premiums and contests. Crew members and sailing instructors attended "to create the sailing experience for Chivas consumers, especially in the tier-one and tier-two cities," said Mr. Zantingh.

Between November 2006 and January 2007, Pernod Ricard held a lucky draw contest in upscale KTV bars across the country. Five participants won the chance to sail on Team China's yacht during five of the event's six races as the "18th man," a highly-coveted invitation which puts an honored guest in the back of an America's Cup Class yacht. (The sixth spot will be allocated during the race to a special guest.) The company playfully referenced the "18th man" prize with the age of Chivas Regal's 18-year-old whisky, the official brand sponsor of the promotion.

Pernod Ricard will fly the five winners, "all successful Chinese businessmen," said Mr. Zantingh with a sigh of relief, to Valencia next month. There, the company built the team a hospitality bar at their base in Port America's Cup, providing beverages for its America's Cup events and creating commemorative packs for the team's VIPs.

The company won't disclose how much it has invested in the sponsorship effort, its first modern-day association with that competition anywhere in the world, "but sponsoring an America's Cup team isn't cheap to begin with and with our 360 activation program, we've turned that original figure around a few times more. It wasn't cheap," said Mr. Zantingh.

Since the marketing program launched last fall, the sponsorship has made the Chivas Regal brand "seem more prestigious" and "iadded international prestigious," according to 65% of respondents in a study conducted in China by research company GfK. About half said the association "made them proud to drink Chivas."

Although China may never be a nation of "yachties," there are "prestigious and premium cues around the world of sailing that fit well with the Chivas brand," said Mr. Zantingh. "It's also about getting Chivas involved in something Chinese can feel proud about."
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