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South Florida Events Struggle To Hold On To Corporate Sponsors

Miami Herald, February 19, 2009

By Elaine Walker

Instead of pouring Merlot at this week's South Beach Wine & Food Festival, Publix is offering struggling consumers bargain prices on milk and Cheerios.

The supermarket chain decided not to re-up on its Grand Tasting Village sponsorship after two years because the cost and staffing needed was "excessive," said spokeswoman Maria Brous. Publix felt the priority was investing the dollars in stores where customers could benefit directly.

As the economy slows, corporations are taking a harder look at the amounts of money and staff they can dedicate to marketing sponsorships. Events and organizations throughout South Florida are feeling the impact.

Sponsorships for the South Beach Wine & Food Festival are down 12 percent, the biggest drop in festival history. Coconut Grove Arts Festival lost Target as a title sponsor and saw others, like Pollo Tropical, switch from cash deals to providing free products. Metrozoo's Feast with the Beasts has had to make do with less from sponsors.

'The people I would normally call on are cutting donations in half or saying, `I don't know if I can do it this year,"' said Cindy Eisaman, vice president of the Zoological Society of Florida, which is about halfway to its fundraising goal for the March 6 Feast with the Beasts.

Nationally, sponsorship by North American companies is expected to grow 2.2 percent in 2009, the smallest rate in 24 years, according to IEG, which tracks sponsorships.

For Publix, the decision to put the money from the festival into the stores made better business sense.

"In tough economic times, our customers are looking for opportunities to save," Brous said. "The essentials program reaches all of our customers, as opposed to the limited customer base that is actually able to visit the festival."

The advantage the South Beach Wine & Food festival has historically enjoyed with sponsors is its reputation as a premier marketing vehicle for brands trying to connect with a high-end consumer. But this year that hasn't been enough.

Sponsorships are expected to generate less than $2.9 million, down from almost $3.4 million last year. Sponsorships run from $20,000 to as much as $180,000.

"There is no question everyone is looking to get more out of it for less," said Lee Schrager, the festival's director. "This year everyone wants to give more in-kind contributions and less dollars. We had to be a lot more flexible then ever before."

The sponsorship cutbacks mean the festival will raise less money for Florida International University's Hospitality School. Last year the festival generated $2.26 million, while this year's projections call for $1.89 million.

"We're being very cautious," Schrager said.

Target, Atlantis Resort and Macy's all opted out of the festival this year after multiple years as sponsors, although some did put their money into a spin-off sister festival Schrager organized last fall in New York City.

For Macy's, the pullback from South Beach was part of a shift in company strategy, not a reflection of any disappointment with the value of the festival sponsorship.

"We were using it as a branding vehicle for our home store and branding is always successful because you're exposed to that many new customers," said Melissa Goff, spokeswoman for Macy's Florida. "We're not cutting back on community sponsorships, but each one is very strategically planned."

For Moet & Chandon the change was eliminating its title sponsorship of the BubbleQ, one of the festival's premier events and one the champagne company helped create. Instead, the festival created another smaller event featuring Moet: an Oscar Night Party hosted by chef Bobby Flay and his wife, actress Stephanie March.

The biggest blow for the festival was the decision by the Turks & Caicos islands to cancel its $100,000 sponsorship of the Surfs and Turks beach party at the Mandarin Oriental. The event had been created just for them.

The decision came after the $250 tickets were already on sale, the festival guide printed with a full-page ad promoting the British territory and another ad in The New York Times.

"I think it would have been a great event," said Wayne Garland, executive chairman of the Turks & Caicos Tourist Board. "It was just one of those things we couldn't afford."

The festival has also been able to replace most of the sponsors it lost. Whole Foods took over from Publix as the sponsor of the Grand Tasting Village. Perrier-Jouet replaced Moet & Chandon as the sponsor of the BubbleQ party. Other new sponsors include Driscoll's berries, the Idaho Potato Commission and Harry Winston jewelers. The Miami Herald is one of the media sponsors.

Whole Foods says it had been interested in sponsoring the festival for years.

"This is an event that celebrates food and that's what we do everyday," said Russ Benblatt, Whole Foods marketing director for Florida. "The promotional benefits far outweigh what we're paying. We're getting great bang for our buck."

Unlike traditional grocery stores, Whole Foods also invests all its marketing budget in event marketing and sponsorships, instead of mass media advertising.

"Promotion and event marketing allow us to do more than put our logo on something," Benblatt said. "It allows us to get out and interact with the communities we're in."

Increasingly, companies want to connect with consumers directly and create memorable experiences.

Bacardi USA is moving away from sponsorships that simply involve putting its name on a sign or passing out products. Instead, the Miami-based spirits firm is expanding its partnership deals with organizations like the Miami Heat and the Sony Ericsson Open tennis tournament.

At AmericanAirlines Arena, Bacardi's recent efforts include naming rights for the Bacardi Grand Entranceway and the Dewar's Suite Level, plus improvements in the Grey Goose and Dewar's branded lounges. At the tennis tournament, the Bombay Sapphire Lounge offers mixology seminars and couches for relaxation.

"Brands are rejecting cookie-cutter proposals that don't deliver on a brand experience and add value," said Giles Woodyer, brand director for Bombay Sapphire, a brand in Bacardi's portfolio. "Right now it's a buyer's market. Event organizers need to prove they can really, truly assist in bringing a brand to life."

Event organizers like Maria Korge, whose company lines up sponsors for the Coconut Grove Arts Festival, are worried that the sponsorship situation could get even worse depending on how long the recession lasts.

"A lot of our sponsors are three-year sponsors," said Korge, vice president of Korge & Co. "For next year, we're bracing for the worst."

Miami Herald business writer Douglas Hanks contributed to this report.