Cola Wars Head to NASCAR Races

July 10, 2007 — -- Coca-Cola has won a major victory in its long-standing battle with Pepsi to quench the thirsts of millions of American sports fans.

The Atlanta-based company announced Monday a new deal giving it exclusive vending rights for soda and water at 10 NASCAR racetracks including the Daytona International Speedway, home of the Daytona 500.

Pepsi had held the Daytona contract for 49 years.

This is just the latest in a decades-old fight between the two cola giants.

Go to any major sporting event these days — from golf to football to soccer — and you are likely to see billboards for one of the major soda companies. That same soda company is also likely to have exclusive rights to pour its beverages at the stadium.

In most cases, these "pouring rights" extend from the soft drinks to the sports drinks to even the type of bottled water sold at sporting events.

The soda companies hope that fans will associate their drinks with the good times they have at the games, said Susan Stribling, a spokeswoman for Coca-Cola.

The trick is then to get them to keep drinking the brand after they leave the ballpark or stadium.

"Hopefully when they're outside the venue they will make that decision to have your beverages when they have a broader choice," Stribling said.

Millions are spent on winning these contracts and the advertising campaigns that follow. Coke and Pepsi will often have sports-themed promotions in stores and tie-ins with sport stars they have signed. Neither company would disclose the costs of these deals, but the NASCAR deal is estimated to be worth tens of millions of dollars.

The NASCAR Deal

Auto racing is one of the most popular and fastest-growing sports in the county and both cola companies have fought for years to tap into it.

Coke's contract starts in January and is phased in through 2012 as various Pepsi contracts expire. The 10-year deal gives Coke control of soda at a majority of NASCAR's big tracks.

The racetracks, like their counterparts in baseball, football and hockey, have separate contracts with beer companies.

Besides Daytona, Coke will now sell its soda and water at Kansas Speedway, Michigan International Speedway, Richmond International Raceway, Chicagoland Speedway and others.

The timing of the announcement comes right after this weekend's Pepsi 400 race at Daytona. Next year, a similar race will have a Coke name.

Michael C. Bellas, chairman and CEO of Beverage Marketing, says sporting events are particularly strong for soda companies because they hit a key demographic that can be very loyal. He said it was a mostly male audience that might be looking for an alternative to beer.

Further, Bellas said, this deal is good for Coke as it tries to persuade men to buy Coke Zero, a diet soda that males have found more appealing than Diet Coke.

A Confusing Web

Soda contracts are not easy to follow.

The companies make deals with leagues, teams, stadiums and individual athletes.

It is possible to have players on a team sign with Coke while the team itself is a Pepsi team.

For instance, Pepsi has the rights to Major League Baseball, but it only is the "official beverage" of 16 teams. Coke has contracts with 14 other teams.

Then to confuse things even more, the Minnesota Twins are a Pepsi team, but their stadium has a deal with Coke. That is an anomaly — in most cases the stadium and team match — but it goes to show just how convoluted these deals can be.

While Coke and Pepsi dominate the market, there are some cases of independents cracking their stronghold on the sports market.

Seattle-based Jones Soda recently beat out Coke in bidding for a five-year beverage contract at Seattle's Qwest Field. The company's soda will be served at all Seahawks games and at all other events at the stadium. Coke had pouring rights for the Seahawks for most of the last 30 years.