National Hot Rod Association Media Conference
April 25, 2008
THE MODERATOR: Good afternoon, everybody, and welcome. We're glad to have you here on this special conference call for a very special announcement.
We have two very special guests with us here today. First of all, Mr. Tom Compton, President of the National Hot Rod Association, and Brad Goist, Vice President and General Manager for Water and Energy for the Coca Cola North America company.
First of all, we'd like to call on Tom Compton to tell us about the newest announcement and how it's going to affect the upcoming years for the National Hot Rod Association.
Everybody that's been involved with it, was at the announcement last night, just extremely positive looking forward to the 2009 season.
So, Tom, tell us about the announcement.
TOM COMPTON: Well, we had an exciting announcement. As you know, six years ago we announced the partnership with Coke and the NHRA POWERade Drag Racing Series creation.
In 2005 we announced an extension with POWERade and Coke through 2011. Today, we announced a further extension through 2013. And beginning next year for the 2009 season we're going to be called the NHRA Full Throttle Drag Racing Series.
We're extremely excited. The enthusiasm at Coke is at an all-time high. And we're excited about the plan, some of which they shared with the drivers and team owners and crew chiefs today.
We're also very proud and excited about our partnership that will now extend a minimum of 12 years with the Coca Cola company. And that's an environment where a lot of people don't have series sponsors. We feel very fortunate about that.
THE MODERATOR: Brad Goist is with us here, Vice President and General Manager for Water and Energy at Coca Cola North America. Tell us about Full Throttle's entry here now as the title ride sponsorship in partner with the National Hot Rod Association.
BRAD GOIST: This is a really big day for the Coca Cola company and Full Throttle, specifically. Back when we first extended the contract in 2005, Full Throttle became the official energy drink of the NHRA.
And as the brand has just exploded with growth over the last three years, we were looking for a way to really take Full Throttle to the next level.
As we thought about the brand proposition, "Go Full Throttle or Go Home," we realized that the NHRA would be a great title sponsor for us.
And so we began talking to Tom in the last six months about whether or not NHRA felt like this would be a good fit. And after looking at everything and the activation that we're committed to and the excitement we bring, we were able to extend the deal, as Tom said, through 2013 and put Full Throttle in as the title sponsor, beginning in 2009.
So as Tom said, the NHRA Full Throttle Drag Racing Series will be born as of 2009, and it will be the cornerstone for all of our marketing events in Full Throttle.
THE MODERATOR: Before we open it up for questions, the tag line that's going to be used for Full Throttle next year, you mentioned it briefly there. But "Go Full Throttle or Go Home" really epitomizes both brands, Full Throttle and the National Hot Rod Association.
BRAD GOIST: Absolutely. And there's just insight that's universal there. Everybody has a point in their life where they know a point in time where they really have to go full throttle or go home. And there's no more literal meaning than the National Hot Rod Association where we've got cars going over 300 miles an hour in four seconds. That is truly going full throttle or going home.
THE MODERATOR: We'll open it up for questions.
Q. Question for Tom. Tom, what provisions in this agreement have been made to grandfather cars like Bernstein and Don Schumacher that have competitive category sponsorships?
TOM COMPTON: That's a great question. Coke understands the importance of team sponsorship, and they've been extremely good to work with on that front. So all the teams that are out here currently with energy sponsors are grandfathered in, as long as they're with the team owner that they're currently with and they can do what they're doing. They can scale back, they just can't ramp up.
Q. Can they extend their contracts, or are they excluded after their current contracts expire?
TOM COMPTON: They can extend their contracts.
Q. For either Tom or Brad: With the assumption of the series sponsorship, are the point fund totals that are outlined, for example, in the NHRA media guide, are those all going to remain the same? And in the two years beyond the original contract, will the point funds represent an increase because of the new sponsorship?
TOM COMPTON: The points fund isn't affected as of now. But we do have six years to go in the agreement, but it's not addressed under this contract right now. The countdown bonus that we instituted last year will fall under this umbrella. So it will be half a million dollars to win, which it currently is, but it will be under the Full Throttle umbrella.
Q. Brad, could you describe some of your plans for in-market activation or national activation programs through retail outlets in the race markets?
BRAD GOIST: Absolutely. And it goes way beyond the race markets. We are going to put 20 vehicles -- we actually are putting them on the road as we speak over the last 30 days, sampling vehicles in all major markets. Obviously the race markets are going to be our focus.
They've got pictures of the NHRA cars on them. They say "Go Full Throttle or Go Home." We'll sample over five million people this year. That's five million full cans of Full Throttle.
We've got media advertising, which really won't hit fully until 2009, when we're officially taking over the title sponsorship. But what you'll see immediately is retail activation in the markets, with point of sale that's very impactful.
We showed it to the drivers today. Again, all around the tag line "Go Full Throttle or Go Home." We have at track activation. Very contemporary and iconic. We've changed the packaging itself to go along with the change, and the package itself now says "Go Full Throttle or Go Home." So this is a complete 360 brand activation. As I said, this is going to be the cornerstone of all marketing efforts on the brand going forward.
Q. Tom, so just to make it clear: No new energy drink not currently sponsoring a team will be allowed to join the series?
TOM COMPTON: Unless they're under contract or can show they have a deal as of this weekend, that's correct.
Q. Brad, as you look back when POWERade started with the series, they had the John Force commercial. And I think they had some point of purchase. And then it really fell off. Has Full Throttle learned from that where they can really benefit from the tie-in with NHRA?
BRAD GOIST: Yes, I would tell you that part of the reason to make the switch from POWERade to Full Throttle -- and I think part of the reason that Tom and the folks at the NHRA felt like this was a good idea, is the natural fit of energy drinks, specifically Full Throttle and the NHRA.
I mean the brand proposition fits so well. The idea of "Go Full Throttle or Go Home," the idea that there's that moment where you've got to make the decision. And I think what we all realize is, for this to be successful, this has to be the backbone of what Full Throttle stands for. And that's really what it's all about. And that's why we made the change.
THE MODERATOR: Brad, I think we really need to reiterate to the people that this is going to be the main focal point for the Full Throttle brand, the cornerstone and that in itself is a great boost for the entire NHRA series.
BRAD GOIST: Absolutely. This is the fastest growing brand in the Coca Cola portfolio over the last three years. We started with this brand. And today the innovation is unparalleled. We're about to move into a new form of coffee energy drinks. We've got plans for all kinds of new innovation that will be very tailored towards the NHRA and it will be very apparent when people see some of these new products that they fit very closely with the sport.
And one of the things that really attracted us to the NHRA is how loyal the fan base is. And as you think about loyal fan base, we feel like that can really take our brand to the next level. And we believe that our marketing efforts in and around North America can really help take the NHRA to the next level, not just in your home markets where all these races take place, but everywhere else as well.
Q. Will POWERade have any involvement beginning in '09? And if not, would that allow other sports drinks to become involved with race teams?
TOM COMPTON: In 2009, other sports drinks can sponsor vehicles at the primary level. And in 2010 they can sponsor teams in any manner they want.
THE MODERATOR: We'd like to thank everyone for your attention. Transcripts of this will be made available.
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