Suntory CEO Takeshi Niinami told CNN Business in an exclusive interview Monday that his company has decided not to sponsor the upcoming Tokyo Games, saying it was “too expensive”.
“We thought we were an Olympic partner … but the economy was not up to par,” said the boss of the Japanese beverage giant, which is home to brands such as Orangina and Jim Beam bourbon.
Instead of signing as an official sponsor, Suntory has charted another path to increase its visibility during the Games, which begin this Friday: The Tokyo-based company planned to partner with restaurants and bars around sports venues to promote its drinks, and open several establishments to serve its products exclusively.
“The economic losses will be huge,” Niinami said, estimating that Japanese companies could have benefited from an increase of around 10% in their sales if fans had been allowed.
The absence of domestic spectators could cost the Japanese economy 146.8 billion yen ($ 1.3 billion), according to an estimate by Takahide Kiuchi, an economist at the Nomura Research Institute.
“It’s time [when] we have to think about: what is the value of the Olympic Games? Niinami said. “I think the Olympics lost [their] value.”
A big bet
The news came as a blow to those like Suntory who were banking on higher consumer spending. So far, more than 60 Japanese companies have spent a record amount of $ 3 billion on this year’s Olympics – and now a lot of them are concerned about ROI.
When asked if he thinks the Olympics could give Japanese businesses another boost this summer, Niinami said, “More and more, I don’t think so.”
Some companies have had to considerably reconsider their involvement.
Akio Shinya, managing director of Tokyo Skytree, the world’s tallest broadcasting tower, told CNN Business his company had deliberated last year “whether we should become a sponsor under these circumstances”.
Although he subsequently decided to enlist, he has since been forced to cancel various events, including a torch relay on the skyscraper’s observation deck intended to “rekindle the mood.” for the Olympic Games ”.
“Because of Covid, now is not the right time,” Shinya said. “There was no atmosphere to organize such a chic festival.”
According to the North American division of the automaker, the decision was made taking into account “the Covid-19 situation” in the country.
Michael Payne, former head of marketing at the International Olympic Committee, acknowledged the uphill battle for business. “There’s no point in flirting. You know, it’s not an ideal situation,” he said.
But Payne, who created the global Olympic Games sponsorship program some 40 years ago, predicts that companies could “always be pleasantly surprised by the potential benefits of these very difficult Games.”
“There is still an important opportunity,” he said. “I wouldn’t be counting everything yet.