Hot Dog! Red Hot Makers Heat Up Sponsorship
The MLB Los Angeles Dodgers generate a high-six-figure royalty fee from the sale of Dodger Dogs hot dogs; the figure is in addition to Farmer John’s annual rights fee.
Hot dog marketers double down on sponsorship to leverage fan avidity, gain on-site sales and drive store traffic.
August 27, 2012
Acquisitions, new product introductions and new sports venues are driving new sponsorship activity in the hot dog category.
Among recent deals, Kayem Foods Inc. last week announced a new multiyear partnership with the NFL Washington Redskins. The deal affords status as the official hot dog and sausage of the Redskins and FedExField.
The sponsorship follows a new partnership earlier this year with the MLB Miami Marlins and the team’s new home at Marlins Park.
On the motorsports front, Smithfield Foods, Inc. this year entered into a multiyear partnership with Richard Petty Motorsports and the No. 43 NASCAR Sprint Cup Series car driven by Aric Almirola. The company is using the tie to promote Eckrich, Gwaltney, Farmland and other meat brands.
Hot dog marketers also are signing new deals with non-sports properties. Hoffmann Sausage Co. this year has partnered with two state fairs: The Great New York State Fair and the State Fair of Texas.
The Syracuse, N.Y.-based marketer of hot dogs and sausages is sponsoring the fairs to support its growth ambitions. Hoffmann was acquired in May by Zaccanelli Food Group, LLC, a Dallas-based investment firm that plans to turn the Hoffmann brand into a national restaurant chain.
“We plan to transition the brand from a regional icon to a national and international brand, while maintaining the Hoffmann family tradition of quality and exceptional customer service,” said Frank Zaccanelli, president of Zaccanelli Food Group, in a statement announcing the acquisition.
The company reportedly plans to turn Hoffmann into a national restaurant chain under the “Hoffmann’s World Greatest Hot Dogs” banner. Zaccanelli is working with Phil Romano to create the chain; the restaurateur created Fuddruckers, Romano’s Macaroni Grill and other dining chains.
Hoffmann leveraged the Aug. 23-Sept. 3 Great New York State Fair by hosting a hot dog eating event featuring competitive eater Takeru Kobayashi. The company last month announced a partnership with Kobayashi to create a new line of kobi hot dogs for the U.S. and Asian markets.
Kobayashi set a new world record at the fair by eating 110 hot dogs in ten minutes.
|The Top Ten: Hot Dog Manufacturers
||Dollar Sales %
|John Morrell & Co.
|Sabrett Food Products
|Total U.S. sales at supermarkets, drugstores and mass merchandise outlets (excluding Walmart) in the year-ended July 8, 2012, per SymphonyIRIGroup.
On-Site Sales Drive Sports Deals
As a product synonymous with baseball, many hot dog manufacturers focus on professional baseball teams. The goal: build visibility, tap into fan avidity, gain on-site sales and platforms for retail promotions.
“Kayem fans are often sports fans, so partnerships with sports teams and venues is a mutually beneficial fit for both brands,” said Bob Kufferman, Kayem senior brand manager.
Most deals include on-site sales, an asset that can be highly lucrative. Farmer John sells more than one million “Dodger Dogs” each year as a result of its partnership with the MLB Los Angeles Dodgers and Dodger Stadium.
With a more than 50-year history, The Hormel Foods Corp. brand is the team’s oldest sponsor. And that longevity has helped drive visibility. The Farmer John brand consistently ranks first in brand awareness surveys, said Michael Young, the Dodger’s chief revenue officer.
“Dodger Dogs have become part of the Dodger brand,” he said.
On-site sales also can drive retail purchase. According to survey from ConAgra Foods, Inc., 51 percent of consumers said they would consider regularly purchasing a product that they heard about or tried for the first time at a sports game or event at the grocery store.
Americans are expected to consume 20.5 million hot dogs and 5.2 million sausages at MLB ballparks this summer, according to the National Hot Dog and Sausage Council’s 2012 report on Major League Ballparks.
The Texas Rangers are projected to serve 1.6 million hot dogs over the season, making it the biggest seller of red hots. The Boston Red Sox and Philadelphia Phillies tied for second place, with each team expected to sell 1.5 million dogs.
Below, IEG SR highlights three other hot buttons in the hot dog category:
Create licensed product. In addition to on-site sales rights, Farmer John activates the Dodgers with a co-branded Dodger Dog retail product. The company sells the product at Ralphs, Vons and other supermarket chains in Southern California.
The Dodgers receive a royalty on each package sold, said Young, noting the team typically receives an annual payment in the high six figures.
Drive store traffic. Hot dog markers frequently look for tickets and other assets that can be used for retail promotions.
For example, Smithfield is activating Richard Petty Motorsports and the No. 43 car with the Race with Royalty sweeps that dangles two VIP passes to the Oct. 7 Good Sam Roadside Assistance 500 NASCAR Sprint Cup Series race at Talladega Superspeedway. The package includes a limousine ride to the race and lunch with the RPM team on race day.
Consumers enter the promo at retailers in Alabama and Georgia.
The Dodgers use its annual sponsor summit to coordinate in-store promotions for Dodger Dogs. The team several years ago facilitated a promotion between Farmer John and MillerCoors LLC’s Miller beer that included an end-aisle display that promoted the Dodgers and a baseball experience.
Play up local positioning. Regional brands frequently use sponsorship to promote their local roots and offset competition from national players.
For example, Vienna Beef Ltd. sponsors the MLB Chicago Cubs and nearly every other pro sports team in its Chicago hometown, while Farmer John compliments the Dodgers with ties to the ECHL Ontario Reign, MLS Los Angeles Galaxy and NHL Los Angeles Kings, among other properties.
Farmer John uses the ties to support its Taste the Local Flavor ad campaign, said Bill Pedigo, senior vice president with AEG Global Partnerships, which reps the properties.
Kayem Foods Inc., Tel: 617/889-1600
Los Angeles Dodgers, Tel: 323/224-1500
AEG Global Partnerships, Tel: 213/742-7113