Colonial ‘disappointed’ after sponsor deal loss
AFL side Essendon Football Club team has announced that it has partnered with Carlton & United Breweries as official sponsors, putting an end to an existing deal with Colonial Brewing Co.
Colonial signed the groundbreaking deal with the Bombers back in 2017 after CUB downgraded its sponsorship of the AFL which gave clubs the freedom to negotiate individually with breweries.
Back then, the deal with the independent brewery was heralded as “unprecedented”, although CUB still retained certain pourage rights. The Colonial agreement was renewed again in 2018 for a further two years, but has not been extended for the 2021 season.
Instead, Essendon announced that it had signed a deal with the Asahi-owned brewery to become the official commercial partner of the club until 2023.
The Bombers’ chief executive officer Xavier Campbell last Friday said the club was delighted to partner with CUB and that there is “terrific alignment between both organisations”.
Jenna Godley, marketing and communication manager at Colonial said they were ‘disappointed’ that the sponsorship deal ended.
“But [we were] grateful that we were the first independent brewery to sponsor an AFL Club. AFL is such a strong sport and brand in Australia, it was important to us to start to break down the barriers for independent breweries and feel confident that we can grow and be part of a much bigger picture,” Godley said.
“We had the opportunity to challenge the norm and have clubs, sports and even breweries think about other ways to do sponsorship and the value of an independent partnership.
“Unfortunately in this case CUB had deeper pockets than us but it won’t stop us from always pushing the boundaries and trying to close the gap in the beer world.”
Sponsorship deals and breweries
The end of the deal highlights the fiercely competitive nature of sporting sponsorships. In a similar change of hands, Gage Roads took over the sponsorship of AFLW team the Western Bulldogs from Two Birds Brewing last year.
Colonial’s Godley said that there were some aspects of sports sponsorships that brewers should be aware of before entering into an agreement.
“Like any new partnership there are learnings along the way but overall we were really happy with how it performed.
“Looking at sponsorship is like looking at any commercial deal. It can be very easy to be shadowed by the brand and not look at the purpose and what you want to achieve with the deal.
“Always have objectives as to why you want to partner with the company and make sure it aligns back to your business pillars and strategy. Partnerships can look attractive but if not activated properly can quickly become lost revenue and time,” she advised.
In terms of financial returns, it can also be tricky to manoeuvre, especially for smaller brewers with tighter margins.
“Breweries shouldn’t expect an immediate return on investment,” she explained.
“Sponsorship deals show their worth and return over time. It’s a long game in sponsorship, there are many steps to take before you see the benefits.
“Having a specialist help really determines your in-house structure, expertise and the size of the sponsorship.
“I would recommend starting with smaller local sponsorships to upskill and see how it can relate and perform for your company. Local partnerships can be just as beneficial when learning about a new space.”
However, the advantages of an effective sponsorship can prompt growth in both sales and brand awareness, and brewers in addition to Colonial have been successful, including Prancing Pony and its support of the Adelaide 36ers basketball team, Gage Roads’ exclusive deal with Perth’s Optus Stadium, and Capital and Bentspoke’s deal for shared pourage rights with Lion at the Manuka Oval announced in December 2020.
“Sponsorship opens the doors to talk to new potential consumers and gain more brand recognition,” Godley acknowledged.
“Aligning with like-minded brands gives the advantage of initial trust and intrigue in their consumers, breaking down the barrier of entry and driving awareness through new platforms.”
Whether Colonial will take on another sponsorship deal depends if the right one comes along, Godley said.
“We are always considering new partnerships and clubs, however won’t take anything for the sake of it. The agreement would have to make sense from a brand or a business perspective.”
Despite the Essendon setback, Godley said that she and Colonial were optimistic for the future of sports sponsorship deals with local breweries, in the style of the US system.
“I would like to see a stronger push towards local over in Australia,” she said.
“COVID has certainly put a barrier to the momentum of this due to many clubs losing money so they will be looking for the highest-paying sponsors at the moment, however, COVID has also changed behaviours of the supporters and community.
“Now, more than ever, people are supporting local business so I hope this will play a role in how the future of sport in Australia starts to shift. I would love to see this trend supported from the top down.”
Hear more from Jenna Godley on the Beer is a Conversation podcast.