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The Kentucky Derby & Yum! Brands: A Match Made in Louisville


I don’t watch or follow any horse racing for 364 days of the year, and I have a feeling that I’m not alone. But this Saturday (the first Saturday in May each year), for some reason I can’t seem to get enough.

We’re told of the “great tradition” the Kentucky Derby offers up, are bombarded with Derby party ideas and, by the end of the weekend, will have seen some of the largest women’s hats around!  And maybe that’s all it takes for close to 15 million other Americans to tune in each year to catch ‘The Most Exciting 2 minutes in Sports”.

Whatever the reason, I’d like to turn your attention to a relationship that seemed quite odd to me at first: the partnership between the Kentucky Derby and its presenting sponsor since 2006, Yum! Brands.

Yum! is a Fortune 500 corporation with annual global sales of over $12 billion. They operate and license the popular fast food chains such as Taco Bell, Pizza Hut, Wing Street and KFC, brand which I struggle to imagine the elite Derby attendees eating on a regular basis.

However, here are a few reasons why I believe this partnership, between two major global brands, is effective.

1.    The Real Derby Audience

If you were to ask 10 people in the street to give you their description of the type of person that either watches or attends the Kentucky Derby you’d probably get 10 very similar responses. Those answers most likely reflect the approximate 51,000 people that sit in the stands along side the track, a section of that which is referred to as ‘Millionaires Row’. What you don’t often hear about is that Derby attendance can reach 160,000 people when including standing room only and infield tickets. Most of whom are not millionaires.

Even with about a third of the crowd sitting in the grandstands, the demographic of the attendees skews younger. 33% of the attendees is 18-34 years of age, in comparison to only 28% of whom are 45-64 years of age. The average household income of the attendees isn’t as high as you might expect either, with 31% of the people earning less than $75,000 a year, whereas as only 19% earn over $200,000.

Yes, this audience does skew higher than your average American sports event, but it’s probably not the demographic you may expect. This doesn’t account for the 15 million Americans that watch on TV.

It’s actually the only American sporting event that brings in a larger female audience than male audience. This is key to the Yum! strategy, as they are able to target  a large percentage of woman who are head up their households.

2.    Location, Location, Location

Headquartered out of Louisville, Kentucky, Yum! Brands has built a partnership with a local corporation, both keeping the money in state and showing undying support for the local economy. This day in age, with so many things getting shipped over seas and international companies making their way to the States, it’s nice to see two local brands teaming up and supporting each others cause.

I don’t think you can put a value on the amount of importance it means to the Kentucky folks for them to know that Yum! is supporting the Derby and that the Derby has agreed to make Yum! its partner sponsor (because we know they probably have their doors getting knocked down each year by new companies trying to get a piece of the Kentucky Derby brand equity).

3.    Are We Aligned?

It is important that when brands decide to go into business together, whether it be a sponsorship or a partnership, that both brands are aligned and have the same vision. Being tied so closely to one another, it would be easy for one false step by Yum! Brands to ruin the equity that the Derby has built and vice versa.  Luckily enough, both brands have the same intentions, global expansion.

This requires both brands to live up to their end of the deal and maintain the brand equity that they have built so not as to ruin the others aspirations. Again, both have been very successful in reaching their expansion goals with Yum! having over 39,000 restaurant locations in over 125 countries and the Derby being broadcast in over 25 countries.

Conclusion

Hopefully the reasons above have made you change your mind about why two–what one would consider complete opposite–brands can would together and establish a long lasting partnership that ultimately have benefited both parties.

I admire the decision makers at both Yum! and the Kentucky Derby for thinking outside of the box on this one. It just shows you that there are opportunities to evolve and represent your brand at any corner. It’s just some of those corners may cause you to look deeper and take chances on opportunities that the standard observer may recommend otherwise.

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Paul Arterburn is a Co-founder and the Head of Product at Brandfolder, a Techstars Boulder 2013 company. In this capacity, Paul is responsible for overall product vision and execution. This includes managing the development and design processes, constructing and executing the product roadmap, and deploying code daily. Paul is nearing the magic 10,000 hour mark of coding through the dedication of learning 15 different coding languages over the past 15 years. Daring and scrappy, Paul is ready to leave the Web better than he found it: this is what drove him to found Brandfolder. Me in 3: • Movies people can’t believe I don’t like: Star Trek and Star Wars. • My secret talent: As a songwriter my first songs at age 16 were about all girls, and my latest about just one - my fiancé. • My first invention: A wrestling move dubbed 'The Bob Dole' still used across the state of Nebraska today.

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