At one time or another, most businesses dream of rapid growth and brand success coming their way. But while the view from the top can be breathtaking, a small shift in consumer popularity can lead to a devastating decline.
Robert Atkins and his book Dr. Atkins’ Diet Revolution began a diet revolution that grew to incredible heights. National Public Radio reported that in 2003, one in eleven people surveyed were on a reduced carbohydrate diet, the fundamental tenet of the Atkins’ diet concept. Entire industries of food manufacturers found themselves in recession, with pretzel and pasta sales dropping by 8-10% for some companies. While these brands scrambled to add lower carb versions of their products to recover lost sales, other companies were licensing the Atkins brand and bolting it on to their products with great success.
The Atkins name went from a medically questionable diet to the emperor of food brands and peaked in 2003-4 around the time that Dr. Atkins died after slipping on ice and hitting his head. When his autopsy showed hypertension and heart disease, his passing seemed to lend credence to the many critics of the diet who felt it was an unhealthy way to lose weight. The Atkins brand machine went into free-fall and by August 2005 was forced to file for bankruptcy. By that point, NPR reported that less than 2% of the population was now on a low carb diet.
The Atkins brand has survived and continues to market products that augment the diet regimen. But the diet concept has lost favor to others and many manufacturers have gained sales with low carb versions of their products, effectively shutting out the Atkins brand from the market. The Atkins brand lived by the sword of consumer popularity and ultimately all but died from it. Today they are back in business, but with substantially reduced revenues.
Now, another fast-growing brand finds itself on the down slope, NASCAR. Their marketing engine is no longer hitting on all cylinders as attendance at race events and TV ratings have sagged for several years. Has stock car racing gotten out of step with popular tastes? Big gas-guzzling cars travelling at high speeds, but going nowhere, are anything but green. And coincidentally, NASCAR also lost its biggest star, Dale Earnhart, to a fatal crash in 2001, though his son has continued the legacy and helped sustain fan interest.
I have always been amazed by the brand extravaganza that minor league baseball puts on during its games. But the NASCAR marketing juggernaut makes minor league sports marketing look like little more than a well-organized yard sale. Andrew Giangola, director of business communications for NASCAR, had this to say in USA Today, “NASCAR racecars are rolling billboards. The sponsor company’s logos are on the field of play every second of the action. That’s unique in sports.”
It certainly is. But it could also be their Achilles heel. Back in the early days of NASCAR, the sponsors were likely to be auto-related. STP Engine Treatment and Prestone come to mind as early sponsors. But today, big consumer companies with no direct automotive connection dominate: Office Depot, Gillette, VISA. As advertising moves into a more web-based, digital age, these big name sponsors are shifting their ad dollars as well. It could be that billboards zipping by at 150 miles-per-hour are falling out of fashion. NASCAR is said to be considering changes to its race format and championship points system to make races more exciting and build toward a climatic finish, just as men’s professional golf has done with the FedEx cup. And they continue to help craft the images of their drivers in an attempt to build or sustain their star power. But revenues continue to slip with race tracks reporting ticket sales down by as much as 20% in 2010.
Atkins and NASCAR are both brands that saw rapid growth and then faltered. While they are in vastly different market situations, they both were faced with falling consumer favor. Perhaps without fully realizing it, Atkins based its brand partly on the health of its namesake and paid the price with a huge decline in trust after his death. NASCAR’s success is funded by its huge sponsorship packages that depend on attendance and viewership to be sustained. If they are unable to revive the sport’s popularity, those sponsorship dollars will continue to move where they are more effective, and stock car racing will be headed to the pits for an overhaul.