Sluggish sales in the ground coffee category is driving new sponsorship activity with just about every type of property.

The primary reason: Increased competition from single-serve coffee.

Sales numbers tell the story best. Sales of ground coffee slipped 1 percent while sales of single-cup coffee rose 21 percent in the year-ended March 22, 2015, according to IRI, a Chicago-based market research firm.

In one of the category’s largest deals, Maxwell House this year returned to NASCAR with a tie to Michael Waltrip Racing. The Kraft Foods, Inc. brand will sponsor the No. 15 MWR car at six NASCAR Sprint Cup Series races in 2015 and early 2016. Maxwell House will cosponsor the car at the remaining races.   

Clint Bowyer will drive the car in four races in 2015 while Michael Waltrip will take the wheel at Talladega and the 2016 Daytona 500. 

Maxwell House sponsored Waltrip and other NASCAR teams between 1989 and 2003.

Meanwhile, Italian coffee company Lavazza has partnered with the Boston Marathon, USTA US Open and other events as part of a marketing push to build visibility and drive sales in New York City and other U.S. markets, while Marley Coffee signed ties with two events in Colorado: the Icelantic Winter on the Rocks concert at Denver’s Red Rocks Amphitheatre and the FIS Alpine World Ski Championship.

In addition, Starbucks is sponsoring the Firefly music festival, Groupon Bite of Seattle and other events on behalf of Frappuccino chilled coffee.

Lavazza Uses Sponsorship To Fuel U.S. Growth
Lavazza is one of the few bright spots in the ground coffee category: The brand posted a 121 percent increase in sales in the year ended March 22.

And the company is using the US Open and other sponsorships to support that growth.

“The agreement, which forms part of the internationalization strategy purposed by the Italian company and brand, underlines our intention to make the United States our second home and to consolidate the relationship between Lavazza and expressions of excellence the world over,” said Giuseppe Lavazza, group vice president, in a statement announcing the US Open partnership.

The sponsorship affords sales rights, an on-site coffee bar and pouring rights in player and media lounges. The tie builds on partnerships with Wimbledon, The Championships (U.K.), Rogers Cup (Toronto) and the ATP/WTA BNP Paribas Open in Indian Wells, Calif.

The partnership supports shared values between the US Open and Lavazza, said Deanne Pownall, USTA managing director of partnership marketing.

“Lavazza is a premium brand, and we think of the US Open as a premium event. We share the same philosophy of providing an excellent customer experience.”

Lavazza is a promotional partner of the US Open and will not gain on-court signage.

Lavazza also is targeting endurance sports events. The company activated the Boston Marathon by providing coffee to more than 10,000 runners.

“Coffee is a critical piece of the runner’s day. Lavazza is a great brand, they have a great product, and our runners were excited,” said T.K. Skenderian, marketing and sponsorship manager with the Boston Athletic Assn.

The sponsorship was the first time the marathon had a cash sponsor in the coffee category, said Skenderian, noting that the event had in-kind deals with McDonald’s and New England Coffee over the years.

RedPeg Marketing spearheads and executes sponsorship on behalf of Lavazza.

Ground Coffee: The Top Ten Brands
Brand Dollar Sales Year-over-Year Dollar Sales Dollar Share
Folgers   $1.2B (3.77%) 30.89%
Maxwell House $635M (2.62%) 15.63%
Private Label $391M (0.80%)   9.62%
Starbucks $338M  2.61%   8.32%
Dunkin Donuts $304M  0.38%   7.50%
Gevalia $101M  4.17%   2.49%
Peets   $93M  6.70%   2.29%
Community   $86M (0.10%)   2.12%
Eight O’Clock   $82M (4.88%)   2.03%
Chock Full O Nuts   $72M  1.48%   1.79%
Sales at U.S. supermarkets, drugstores, mass market retailers, gasoline/c-stores, military commissaries and select club and dollar stores in the year-ending March 22, 2015, per IRI, a Chicago-based market research firm (@iriworldwide).