NEW YORK: PepsiCo will replace Coca-Cola as the official beverage partner of the National Basketball Association, while Coke has teamed up with Major League Soccer, the companies said Monday.
PepsiCo’s Mountain Dew soda will be the lead brand in the critical North American market for the NBA, replacing Sprite, Coca-Cola’s lemon-lime soda that has been the NBA’s official soft drink in the US since 1994.
Under the multi-year deal, PepsiCo will pump significant marketing muscle for production around its association with the NBA. The soda giant plans new retail and advertising campaigns under the NBA logo for snacks like Doritos and Ruffles, in addition to beverages.
PepsiCo chief executive Indra Nooyi said PepsiCo would also work with its Chinese partner Tingyi in the basketball league’s biggest foreign market.
“We actually bring together more excitement for the product and for the sport,” Nooyi said at a news conference with NBA Commissioner Adam Silver.
The new deal also makes PepsiCo the official sponsor of the NBA All-Star Game.
However, about half oF NBA teams will continue to have contracts with Coca-Cola and sell Coke products in their arenas. The partnership also does not affect marketing involving individual NBA stars, such as LeBron James, who is sponsored by Coke.
Coca-Cola, in a separate announcement, said it was teaming up with the US Soccer Federation and Major League Soccer in a multi-year partnership that makes the soft-drink giant the official nonalcoholic beverage partner for US Soccer and the Mexican National Team’s US tour.
The exclusive association with MLS will include the company’s carbonated beverage and water categories.
IEG, a sponsorship consultancy, estimates that PepsiCo spent $350-355 million on US sponsorships in 2014, while Coca-Cola spent $290-295 million, with the majority going to sports.
William Chipps, senior editor at IEG, said the NBA deal was a “significant” win for PepsiCo because of the NBA’s growing popularity abroad, especially in China. However, the Coca-Cola venture, combined with its continued sponsorship of the World Cup, is also significant because “soccer is huge globally.”
Consumer companies seek professional sports tie-ups because of the intense emotional connection fans develop with teams and sports stars.
“Any sponsor wants to tap into that fan passion,” Chipps said.