Smithfield ramps up commitment to RPM
January 15, 2014, David Caraviello, NASCAR.com
Sponsorship expands to 29 races for each of next three years
NEW YORK -- The setting was a former Broadway theatre, complete with crystal light fixtures and ornamented gold columns that rose up to the second balcony. The thick, velvet curtain rose to display a familiar blue No. 43 car, and what Richard Petty Motorsports hopes is a new era for both the organization and driver Aric Almirola.
Amid the glitz of midtown Manhattan, RPM on Wednesday announced extended agreements with both the sponsor and driver of its flagship No. 43 car, the vehicle co-owner Richard Petty made famous through seven championships and autograph signings too many to count. Crucial to the deal is an increased commitment from Smithfield Foods, which has expanded to 29 races for this season and each of the next two years, with the company’s investment in RPM increasing 50 percent each year through 2016.
The deal includes a contract extension for Almirola, who began driving the No. 43 car in the 2012 season, and whose new terms run concurrent with the Smithfield agreement. The increased funding will allow RPM to make upgrades such as the addition of a research and development team, and puts the No. 43 car on its best financial footing since Petty and a pair of investors took back a once-foundering organization from former majority owner George Gillett in late 2010.
"It's tremendous," said Brian Moffitt, the team's chief executive officer. "When Richard took back control of the company, him being a champion and a winner, he didn't just want to run around in the back of the pack. It's about being competitive. And Smithfield stepping up the way they are, it gives us more testing opportunities, it gives us more to advance research and development. We've been able to hire human capital -- in our business it's all about the people, and we've been able to invest in some really good people we've been able to bring into the company."
(Left to right) Seven-time NASCAR premier series champion Richard Petty, Smithfield Foods CEO Larry Pope and NASCAR Sprint Cup Series driver Aric Almirola at the Hudson Theatre in New York City on Jan. 15, 2014
Smithfield started with RPM in 2012 by sponsoring seven races, a commitment that eventually increased to cover roughly half that season after another sponsor left the Petty team. Wednesday's announcement in the Hudson Theatre marked the beginning of the Virginia company's largest marketing campaign today, based on what chairman Larry Pope called double- and sometime triple-digit increases in sales thanks to his association with NASCAR and the Petty brand.
"The financial commitment that Smithfield is making now into 2016 is multiples of where we initially started, and a substantial increase from where we were last year," said Pope, who once lived in Daytona Beach, Fla., and attended the Daytona 500 as a youngster. "That's an indication of how pleased we are with the success we think the relationship between what Aric is doing on the track, the brands on the track, and what it's doing for us with our customers. We've seen the data supports the fact that this is the right way to reach our customers. We're very pleased with the success we're achieving at retail and food service as a result of that, and as a result, we're increasing our commitment."
NASCAR was pleased to see the increased commitment from a Fortune 500 company. "We know NASCAR is a sport that works for business. It's clearly working for Smithfield Foods," said Jim O'Connell, NASCAR's chief sales officer. "It's one thing for a sponsor to come in, it's another for them to increase their investment by 50 percent. That shows it's working for them."
For Smithfield, the sponsorship is a key step in its progression from a commodity-based company to consumer packaged goods company with recognized national brands. For RPM, the increased commitment from Smithfield adds greater flexibility to a team that receives chassis from Roush Fenway Racing and engines from Roush Yates. "We depend on other people," Petty said. "What we're trying to do now is still depend on those other people, but get more in the game."
RPM also fields the No. 9 car of Marcos Ambrose, as well as an entry for Dakoda Armstrong in the Nationwide Series. Almirola expects the Smithfield extension to help not just the No. 43 team, but the organization as a whole.
"Not only are they investing in Richard Petty Motorsports, but they're investing in our performance, to help us to perform at the level we need to be competitive," Almirola said of Smithfield. "Because let's be real -- everybody's seen it for 100 years in racing: money buys speed. The teams with the most money, with the most resources, with all the right tools and right people, and that can afford the right people and the right parts and pieces, are successful. This is a huge step in that direction."
(Left to right) NASCAR Sprint Cup Series driver Aric Almirola, seven-time NASCAR premier series champion Richard Petty and Smithfield Foods CEO Larry Pope at the Hudson Theatre in New York City on Jan. 15, 2014
While the Petty team has long been one of the most successful in NASCAR history, ownership changes and sponsorship issues have hamstrung it over much of the last decade.
"We've lost a few steps, but we're hoping to regain them," Petty said in a video montage that preceded Wednesday's formal announcement. Although Ambrose has won twice in recent years on road courses, the famed No. 43 car is still looking to snap a winless skid that dates back to a John Andretti victory at Martinsville in the spring of 1999.
But from a Smithfield perspective, winning isn't necessarily as important as generating exposure for the company. "Whether Aric shows up in Victory Lane or not, the sales activation we've been trying to do is working, and we've seen sales lifts that are certainly double digits and sometimes triple digits. … So off‑track, the combination of what we're doing with the retailers and the public appearances, Aric and Richard do a fantastic job off‑track, so there's no issues, no issues off the track at all. In fact, that's the big success story," Pope said.
"Now, what I want Aric to be is the subject of conversation on track. I want a lot of chatter, and the way you do that is to be up front and contending to be up front and being in the mix, and I think they have been a bit hamstrung with maybe not quite enough resources to do all the fine-tuning on the car, and as you well know, this is a 1 percent sport. Ninety-nine percent puts you in 25th place. So we're giving him the ability to have the extra 1 percent, and that's going to add a whole new dimension to that."
Having his car almost fully funded is certainty a comfort to Almirola, as is the contract extension. Almirola had been working on a year-by-year deal, and now has his first contract covering multiple seasons.
"This gives me the opportunity to be a lot more confident," he said. "I'm not worried that if I make one mistake or whatever, that they're going to be looking to figure out the next guy that's going to come in and do better. It gives me a lot of confidence knowing that I have Richard Petty Motorsports behind me, and then obviously Smithfield Foods behind me and that they're committed to me and they support me. We've had a lot of success already off the race track and some on the race track, and we look to continue to increase the success on the race track as well as off the race track. It feels great to not have to be worrying in June or July where I'm going to get my next paycheck from."
For Almirola, the extension continues a relationship he's had with Smithfield since his days racing in the Nationwide Series for JR Motorsports. Bob Weber, the company's senior director of business development, was at Richmond with his son Matt to gauge interest in NASCAR when he met Almirola as the driver was heading to introductions. Since he didn't have much time to chat, Almirola told Matt to jump in the back of the pickup truck along with him, and ride around the track as the he waved to the crowd.
Almirola finished 18th in Sprint Cup points last season, after a promising early stretch that saw him record four consecutive top-10 finishes, a first for the No. 43 car since Bobby Hamilton did it in 1996. But it was that meeting with Weber back in his Nationwide days that really helped him, and later RPM, gain traction with Smithfield. The Tampa native took over RPM's No. 9 car for five races after Kasey Kahne left the team in late 2010. Later when RPM was in talks with Smithfield about prospective sponsorship, the company was pleased to learn that Almirola was in the Petty fold.
By 2012, Almirola was driving a No. 43 car that had Smithfield brands on the hood for much of that season, and the relationship has blossomed from there. "I think Aric kind of epitomizes what Richard stands for," Moffitt said, " ... and that's what Smithfield was looking for."
For Almirola, the increased sponsor commitment means perhaps his best shot yet at putting the No. 43 back into Victory Lane for the first time in well over a decade. With a better-funded vehicle underneath him, there's now pressure to get it done -- but pressure that the 29-year-old welcomes, because he knows the promise it entails.
"I'll gladly take the pressure that comes with it," he said, "because if there's no pressure, that means you're not competitive. And if I'm not going to be competitive, I don't want to do this. I l want to race, I want to win. I don’t get excited about playing board games unless I think I can have a chance to win. So I think it's a great opportunity for me to go out and have a chance to be extremely successful. And I welcome the pressure, because that means I have all the tools and the people that I need to go out to be successful, and it's up to me and my crew chief and my guys to go out and get that done."