How Budweiser salvaged its World Cup campaign

Sascha: [00:00:02] From Equity Mates media. This is The Dive. I'm your host, Sascha Kelly. The FIFA World Cup wraps up in Qatar this weekend. France will take on Argentina in a heavyweight battle. But off the pitch, perhaps the most significant moment when it came to the business of the World Cup happened two days before it kicked off. That's when guitar and FIFA decided to ban the sale of alcoholic beer at stadiums. 

Audio Clip: [00:00:27] Sky News understands football fans will no longer be allowed to buy alcohol at World Cup stadiums. This very late decision comes ahead of the opening game in Qatar on Sunday. Qatar had originally ordered Budweiser stands to be less prominent, but now it is. Alcohol will not be sold. 

Sascha: [00:00:43] This took the event's major sponsor, Budweiser, by surprise, and the company had to pivot its marketing strategy on the spot. It's Friday, the 16th of December. And today I want to know, how did Budweiser salvage its World Cup and is sponsoring the World Cup really worth it? To talk about this today? I'm joined by my colleague here at Equity Mates. It's Darcy Cordell. Darcy, is Budweiser your beer of choice?

Darcy: [00:01:10] It's not Sascha, but I don't mind a little bad here and then. Very American beer. 

Sascha: [00:01:20] Yeah, I've got to say, I don't think I've had it recently. I certainly can't imagine how it tastes compared to the young Henrys or the, you know, the other ones that I've got in my life.

Darcy: [00:01:31] Craft beers. 

Sascha: [00:01:33] Yeah, the craft beers at the local pub on the corner, the union shout out to the union. So Budweiser has been the official beer sponsor of the World Cup for the past 36 years and the official sponsor of the England men's team since 2018. How much exactly do they spend to sponsor this cup? 

Audio Clip: [00:01:53] Is there any way to say? But there's nothing much you can say when you say. When you think about the game.

Darcy: [00:01:59] It's not cheap. Sascha Budweiser is paying FIFA $75 million to be the official beer supplier for this Qatar World Cup. And they have a deal for roughly $112 million for the next World Cup in the US, Mexico and Canada. But they get exclusive rights to sell Budweiser at the tournament. Budweiser is not a small company. Its parent company is AB InBev, which is a Belgian Brazilian beer giant. The other brands, they own a Corona, Becks, Stella Artois and about 500 others to go with them. AB InBev has a market cap of almost $100 billion, so there's a lot of money behind Budweiser, and it's one of the most recognisable beers in the world, especially popular in the US. 

Sascha: [00:02:41] Yeah. So I've snickered at Budweiser at the beginning, but I've definitely drunk a few Coronas in my time. So understandably, they're a massive brand and a very loyal sponsor. But two days before the cup began, as I said, the Qatar government threw Budweiser's plans into disarray. 

Audio Clip: [00:03:00] And suddenly today we're hearing about a surprising last minute move. FIFA says alcohol sales have been banned. 

Darcy: [00:03:06] They threw a massive curveball. Qatar's law is based on an interpretation of Sharia law, so alcohol is banned. Originally, they had made an exception for the month-long World Cup tournament with tens of thousands of fans coming in from around the world to visit Qatar for the Cup. But then, just two days before the opening match, FIFA caved to pressure from Qatari officials and they banned the sale of alcohol in or around the stadiums. During the event, Budweiser responded with a tweet, which it then deleted. They said, Well, this is awkward. 

Sascha: [00:03:37] That seems like the modern PR solution is to respond with a tweet. I'm not surprised it disappeared. Pretty awkward and really expensive. On top of the 75 million Budweiser spent to sponsor the World Cup, they would have gone through the logistical hassle and expense of transporting a huge amount of beer to Qatar, storing it, and then assembling the sales infrastructure required to sell it. I mean, we did a small version of that at FinFest this year, so I can only imagine what it's like on a World Cup scale. [00:04:08][31.3]

Darcy: [00:04:09] Yeah, a much bigger scale. Although FinFest is great. Budweiser had spent about $5 million on those things you just mentioned operations in Qatar over the last couple of years, really getting ready to sell their beer at the tournament. There are almost no breweries in Qatar and it also experiences intense heat. So Budweiser had to ship its beer by Ocean Freighter and then store it in refrigerated warehouses. 

Sascha: [00:04:34] So Darcy told me, how did they salvage their investment? 

Darcy: [00:04:37] Well, Budweiser remains very present at the World Cup, albeit in a watered down way. 

Sascha: [00:04:42] Pun intended. I hope so. 

Darcy: [00:04:45] The stadiums have been rid of alcoholic beer, but the alcohol free Budweiser zero option is everywhere.

Audio Clip: [00:04:51] Introducing Budweiser zero.

Darcy: [00:04:54] Ads for the drink play on a loop in the stadium screens and they're just fridges full of it, right next to the soft drink and soda fridges. 

Sascha: [00:05:02] Well, I understand that that's all very well. Good to have it everywhere. But as a non-alcoholic option, I can't imagine that the same amount of fans are rushing to buy and drink that beer in particular. 

Darcy: [00:05:17] Yeah, it's a good point. So from the moment alcohol was banned in stadiums, Budweiser really had to come up with something on its face. We mentioned their Twitter account deleting one tweet. Well, the next one they made was kind of genius. They then posted a photo of thousands of cases of beer in a warehouse, which we can probably assume was in Qatar. And they captioned it New Day, new tweet. Winning country gets the buds, who will get them? 

Audio Clip: [00:05:42] What to do with all that beer? 

Audio Clip: [00:05:44] Budweiser will ship the unsold beers to the winning country and will host an ultimate championship celebration for fans. 

Sascha: [00:05:52] And that tweet went semi viral with thousands of retweets. So it's either going to be Argentina or France who gets thousands of these cases. Darcy, who are you barracking for?

Darcy: [00:06:03] I want the Argentineans. Let's go, Messi. 

Sascha: [00:06:06] Okay. 

Darcy: [00:06:07] But this tweet adds, you said it was really popular, Sacha, and they doubled down on the popularity of this idea. They then rolled out a new slogan that could be seen in all the stadiums and that was Bring Home the Bud. And then they tripled down along with the winning nation. Hopefully Argentina receives all the undrank beer. Budweiser said they'll throw a big coming home party for them when they arrive home.

Sascha: [00:06:28] So it seems they've managed to turn this massive curve ball into a positive. They've managed this pivot really well. It's certainly got people talking and in some ways it's brought more attention to Budweiser, the name in context of the World Cup. But what about sales, Darcy? Because I can assume they took a massive hit selling non-alcoholic beer at the stadiums. 

Audio Clip: [00:06:52] The move isn't going over well with fans who braved long lines to get their fill where they could on Saturday.

Audio Clip: [00:06:59] Beer is, of course. 

Darcy: [00:07:00] Yes. So we mentioned they lost the $5 million just getting the beer to Qatar. But having said that, beer sales at the tournament are only a small portion of what Budweiser expected to get out of the sponsorship deal. And Qatar is in a completely beer free zone. Fans can drink it at set times in fan zones away from the game and also in hotel bars. So the sales haven't been a lost cause, but the other parts of the sponsorship deal are where the value has really been provided to Budweiser. We mentioned its advertising can be seen everywhere. They've got deals with Messi, Mbappé, Neymar, they're plastered across Budweiser ads, and then they also have sponsorship of entertainment in Doha and fan festivals. Simon, now head of product here at Equity Mates. He is so hardwell, which is sponsored by Budweiser. And they've also got promotions at pubs, restaurants and retail outlets in 70 countries. 

Sascha: [00:07:55] Wow. Well, I knew that they were still selling beer because I remembered. Simon said he managed to buy some at a specially designated zone, so it hasn't been as bad as we might have expected. For a company to be two days out from one of the biggest sporting events in the world with their main product pulled, they have done so well to salvage anything. So let's take a short break. And then when we come back, let's dig more into Budweiser and FIFA's response and also and ask the question, is it even worth paying these massive sums for sponsorship deals? Welcome back to The Dive. I'm your host, Sascha Kelly. I've got a quick favour to ask. It's the last couple of days of the year. Can you pull out your podcast player and give us a five star review? I want to say a huge thank you to Bulk David, who did that after listening to our boomers, the Millennials conversation earlier in the week, he said Great Internet generational comparison app. Yep, you have a few keen Gen X listeners. Keep up the interesting stuff. Big thumbs up. Five stars from David. Thank you so much for your support. Be like David, give us five stars. Make us smile. That message made our day. Look, Darcy, let's get into the topic at hand. We've been talking about Budweiser's sponsorship deal at the World Cup, and then subsequently there was a decision made to ban alcohol sales from stadiums at the tournament. So FIFA supported this ban and subsequently it could actually cost them a lot of money. 

Darcy: [00:09:37] Yeah, absolutely, Sascha. Despite Budweiser somewhat salvaging its World Cup campaign, it wants a refund. We mentioned they have a $112 million deal with FIFA for the next World Cup for Budweiser is reportedly asking FIFA for a $47 million deduction from that deal after soccer's governing body reversed course on its beer sales in Qatar. 

Sascha: [00:09:59] Wow. So they want 47 million taken out of that 112 for the next cup in 2026. Let's widen the lens a little bit, though. $112 million is a huge amount of money. Is it a good investment to sponsor the World Cup? 

Darcy: [00:10:17] So according to global data, there is a sponsorship revenue potential of $1.7 billion up for grabs during the World Cup. That's blue sky potential, but a massive amount of money. And it is obviously spread out across all the different sponsors. So at this year's Qatar World Cup, there are 27 brands directly partnered with FIFA. That includes Vivo. Qatar Airways, Adidas, Coca-Cola, Visa, Hyundai Kia, McDonald's and Budweiser, of course, Vivo, they topped the list in terms of sponsorship deal value with a $450 million deal over six years. 

Audio Clip: [00:10:53] You get a. Shot at this. 

Sascha: [00:10:54] But that's a lot of money for a company I've never heard of. Who are vivo? 

Darcy: [00:11:01] Vivo. The Chinese smartphone company. I didn't know much about them either, but they've got some money to play with. But the thing is, most brands are priced out of sponsorship. The average deal costs $63 million with FIFA, so most brands just can't afford that. But major sporting tournaments do present a huge opportunity for retailers who can afford the sponsorship. 

Audio Clip: [00:11:23] This is my family. Every World Cup, we all get together. Mate, let's go. 

Darcy: [00:11:27] 2018 World Cup in Russia saw an 18% increase in sales in the beer category, then average for the year and that equated to an additional 1.4 million shoppers. So maybe that's a good sign for Budweiser this year. 

Sascha: [00:11:41] But success isn't just measured in monetary terms, is it? Outside of money, sponsorship is a way to gain soft power and global influence. 

Darcy: [00:11:52] Yeah, that's right. And we talked about Thailand's government gaining soft power a few weeks ago when we did the episode on Why Are There So Many Thai restaurants? And South Korea is doing a similar thing, just using different methods.

Sascha: [00:12:05] Yeah, of course. South Korean K-Pop star Jungkook performed at the opening ceremony in Qatar on. 

Darcy: [00:12:20] Exactly right. So he has a big endorsement deal with the South Korean car maker Hyundai Kia, which also happens to be a major favoured sponsor. So the South Korean government, they've been trying to build soft power by engaging these target audiences around the world. And there's no bigger audience than the face of the World Cup.

Sascha: [00:12:38] Darcy, I just want to interject. It's so interesting how these interconnecting sponsorships work. It makes me think of the Super Bowl and Pepsi Coca-Cola and how the pop stars are all linked, and that determines whether they can perform or not. So fascinating that it played out here. 

Darcy: [00:12:54] Yeah, there's a lot going on behind the scenes. And state owned Qatar Airways is another example of this soft power. They're busy selling plane tickets as faces official airline partner, but they also play a pivotal role in the Qatari government's plan to establish Hamad International Airport as a major hub of global travel like a new Dubai or Singapore. And the same applies to China. It's got four key World Cup sponsors and it goes across electronics, which is Hisense Mobile phones, Vivo, as we said, dairy products with mango and everything from property to media with Wanda. So a key reason for these sponsorships is to spread China's influence around the world and potentially help China host the tournament itself one day.

Sascha: [00:13:38] So there is so much more to these sponsorship deals than just money. And the gain of soft power is also really hard to measure. There's one more thing that I do want to talk about, and that is the growing trend of what's called ambush marketing.

Darcy: [00:13:53] Yes, a very growing trend and a very sneaky way of using a major event like the World Cup or the Olympics to promote your products without really paying for it. 

Sascha: [00:14:03] Interesting. 

Darcy: [00:14:04] So we know FIFA charges close to $100 million for a four year sponsorship deal and most companies can't afford that. So what some do is use the event as a marketing tool and basically make it seem as though they're a part of the event without actually paying for the sponsorship. 

Sascha: [00:14:20] This is intriguing and sounding very tricky, so can you give me some specific examples? 

Darcy: [00:14:25] A very renowned example is Bavaria Beer at the 2006 World Cup in Germany and again in 2010 in South Africa. Basically, they gave spectators at the tournament branded clothing. So Bavaria, t-shirts, jumpers, you name it. And people then wore that into the stadiums and then the TV coverage. You know, everyone around the world is watching the World Cup, they say thousands of fans wearing the Bavaria beer tops and that's seen all over TV and all over the world. And again, huge global attention, which was obviously very frustrating for the official beer sponsor, Budweiser. Another example is the 2018 World Cup in Russia. Irish gambling company Paddy Power ran a campaign with the slogan from Russia With Equal Love. While we're making accidental allies of the World Cup home nation. Basically they donated £10,000 to LGBT+ charities for every goal the Russian national team scored in a protest against anti LGBT sentiment in Russia. And finally, a more recent example here in Australia, Sascha Sportsbet, you might have seen they've been running a campaign with the slogan, Yeah, Nah, Qatar. And that's been running during this year's World Cup. 

Audio Clip: [00:15:36] The World Cup in Qatar is a bit, yeah. Are you sure you won this bid fair and square? 

Sascha: [00:15:41] Yeah. Darcy, I've only seen the slogan for this campaign here in Qatar. I don't actually know what's going on.

Darcy: [00:15:48] Basically, they've run a campaign saying, yeah, no, we don't support what's going on in Qatar, but yeah, we're happy to have a punt on it. So I'm not sure how ethical that is, but it is an example of ambush marketing. 

Sascha: [00:16:00] Whatever combination of. Yeah. And on. Yeah. The second word is what you actually mean. That one took me a long time to get people to understand when I was overseas. Look, we could go around in circles for ages with that one, Darcy, so why don't we put a pin on our episode today there? We enjoyed this episode. Please tell a friend about it. Write a review like David. Honestly, it's the best way for our podcast to go. And we want to kick off 2023 with a bang. If you've just joined us for the first time, I mean, you've not picked a better time. We've got a huge back catalogue, plenty of summer listening, a reminder that we'll be wrapping up for the year next week, but we will be taking a short break and then back refreshed, recharged in your podcast players from the end of January. Remember, in the interim, you can follow us on Instagram at thedivebusinessnews. You can contact us by email, thedive@equitymates.com and you can subscribe wherever you're listening right now and you'll never miss an episode and you'll get our first one when we're back on the 29th of Jan. Darcy, thank you so much for joining me today. 

Darcy: [00:17:07] Thanks, Sascha. 

Sascha: [00:17:08] Until next time.