Which Brands and Categories Are “Recession-Proof” Partnership Prospects?
While no sector is immune from the effects of a distressed economy, some will weather the storm better than others. Naturally then, those are the businesses that rise to the top of target lists for partnership sales teams.
The categories below represent some of the most likely candidates for increasing sponsorship and other sports and entertainment marketing activity even in the presence of macroeconomic headwinds. The common descriptor they share is that each can be considered more or less a necessity (food, more; alcoholic beverages, less) that consumers will continue to purchase versus more discretionary products and services that can be delayed until spenders feel flush again.
The CPG category, including food and personal care, drives marketing spending in good times and bad based on purchase frequency and the essential nature of many of its products.
As Anthony Crupi wrote for Sportico in a look at the sports TV advertising market last week, “The Procter & Gambles of the world will keep pouring money into TV as long as Americans are still in line for personal necessities such as toothpaste, deodorant and laundry detergent.”
While “pouring” would be overstating things when it comes to sponsorship, the sentiment still applies to companies such as Nestle, Kraft Heinz, General Mills, Mars, Kellogg, Mondelez, PepsiCo and Coca-Cola, all of which need to keep the marketing spigot continuously open.
In an umbrella category that includes banking, credit cards, brokerages, and other segments, research indicates consumers see few major distinctions between providers, requiring marketing, advertising and promoting to establish those points of difference.
In addition, the many new players belonging to the fintech sector account for both offensive deals by the disruptors and defensive moves by established firms. A prime example of the former is the new “multi-year partnership” between Major League Soccer and Avant, making the “credit-first neobank” the official credit card of MLS.
(To my knowledge, this is the first-ever league-wide credit card deal in the U.S. with a brand not named Visa, MasterCard, American Express or Discover.)
While beverages are a subset of the CPG category, they deserve separate attention from sponsorship sellers due to their unique attributes such as some being regulated industries, as well as having different go-to-market models through distributors, bottlers, etc.
In addition, there are seemingly endless new product introductions and other innovations that keep the category ripe for new partnerships to help launch brand extensions, expand (or protect) market share, etc.
Such is the case currently in the alcoholic drinks sector, which continues to see an influx of ready-to-drink cocktails from both industry giants and upstarts, as well as the introduction of “better for you” beverages. (The latter including options such as no- and low-alcohol, lower calories and sugar, added benefits and options that support lifestyle diets, according to research firm IRI.)
Those seeking partnerships should pay attention to trends such as declining beer sales last quarter for companies such as Anheuser-Busch InBev. A-B is looking to offset those numbers with continued growth in premium RTD cocktails and vodka seltzer
As quoted in Media Post, A-B CEO Michel Doukeris told financial analysts in an earnings call July 28, “the key focus now is on the U.S., where you have this dual strategy” consisting of RTD brand Cutwater and vodka seltzer Nütrl.