Faced with increased competition from supercenters, pharmacies, wholesale clubs and other types of food retailers, sponsorship activity in the supermarket category is showing no signs of slowing down.

Case in point:  The supermarket category was one of three industry segments that maintained the same level of sponsorship activity in 2011 as 2010, with seven percent of properties reporting a sponsor in the category, according to the most recent IEG Property Survey. The other two categories: beer and specialty retailers.

Supermarkets replaced non-bank and non-credit-card financial services as the tenth most active category, according to the survey.

Recent deals range from pro sports teams to marathons and local festivals. Those include The Kroger Co. and the MLS Houston Dynamo; Publix Super Markets, Inc. and the Atlanta Track Club; and Whole Foods Market, Inc. and the inaugural Great GoogaMooga food, beer and music festival in Brooklyn, N.Y 

As in the past, supermarkets largely use sponsorship to achieve two primary objectives: promote community goodwill and drive store traffic.

And that activity can be highly beneficial to properties. Similar to media partners, supermarkets offer two valuable benefits: promotional assistance and access to consumer packaged goods brands. 

Most supermarkets ink cash deals when working with pro sports teams and other large properties. On the flip side, deals with smaller properties are usually promotional commitments, around which the retailer promotes the sponsored event through media buys and in-store marketing collateral.

Both types of deals can help open the door to new sponsors.

For example, RhodyCo Productions leverages its partnership with Andronico’s Community Markets and other regional supermarket chains to enhance sponsorship packages and access CPG and other types of companies that it may not otherwise be able to access on its own.

The event producer accomplishes that task by accessing in-store display space that it can pass through to sponsors. RhodyCo bundles the display space with exposure in the retailer’s circulars and sampling rights at the event.

The strategy allowed RhodyCo to secure Arrowhead water, Clif Bar, FRS Healthy Energy and other brands as sponsors of the Feb. 5 Kaiser Permanente San Francisco Marathon.

In a different twist, U.S. Road Sports & Entertainment leveraged its partnership with Publix to secure a deal between Crystal Springs water and the Publix Georgia Marathon, an event it owns and produces.  

The supermarket introduced the event producer to the bottled water brand but did not provide additional promotional support, said Greg Laird, CEO and founding partner of U.S. Road Sports & Entertainment.

Publix this year extended its title of the Georgia Marathon with a three-year contract running through 2015.

In addition to new sponsors, supermarkets also can provide significant promotional support. For example, Publix promotes the Georgia Marathon through TV, radio and newspaper ads. It also gives the event dedicated ad space in the Atlanta Journal-Constitution and six billboards.

Below, IEG SR highlights four tips and best practices on working with companies in the supermarket category:

Promote health and wellness. Nutrition and proper eating is a key sponsorship hot button in the supermarket category.   

For example, Tops Friendly Markets this year will leverage its presenting sponsorship of the Taste of Buffalo to promote NuVal, a nutritional scoring system that helps customers make informed nutritional choices.

Drive store traffic. Like other types of retailers, supermarkets frequently use sponsorship to drive store traffic.

Most companies accomplish that task by serving as a ticket sales outlet. Tops activates the Taste of Buffalo by selling pre-sale food vouchers at local stores.

The retailer also uses the event to prompt usage of the Tops loyalty card. Customers that use the card are automatically entered into a sweeps dangling the opportunity to taste all food items within a specific area of the event.

Leverage internal departments. Rightsholders can access incremental revenue by pulling multiple departments into a sponsorship.

The Taste of Buffalo last year expanded its Tops partnership with ties to the retailer’s pharmacy and organic food departments.

The festival secured incremental revenue from both departments. For example, Tops secures sponsors for its on-site organic food display, around which it shares a portion of each company’s rights fee with the property.

Category managers need to gain approval from the festival on which companies and categories they wish to approach, said Connie Nitkowski, president of Sell-utions, Inc., a promotions and event marketing agency that reps the fair.

“They submit a list, and I give them the okay,” she said, pointing to carbonated beverages as an example of a category that is off limits.

Participating vendors for the 2012 event include Popchips; Annie Chun’s seaweed snacks; Funky Monkey fruit snacks and Walden Farms salad dressing.

“There is incremental money in every department,” she said.

Offer turnkey packages. When crafting retail promotions, properties should offer turnkey platforms that require little work on behalf of the retailer.

“Anyone who has worked with a supermarket chain knows how incredibly busy buyers are. They are listening to ten pitches a day, setting price points and cranking out cut outs,” said Dave Rhody, president and founder of RhodyCo Productions.