Suntory CEO Takeshi Niinami told CNN Business on Monday that his company decided to sponsor the upcoming Tokyo Games, saying it was “too expensive.”
“We thought about being an Olympic partner … but the economy did not match,” said the head of the Japanese beverage giant, which is home to brands such as Orangina and Jim Beam bourbon.
Instead of signing up as an official sponsor, Suntory sold out another route to increase its visibility during the games starting this Friday: the Tokyo-based company planned to team up with restaurants and bars around the sporting venues to promote its drinks and open more businesses to operate its products exclusively
“I thought this apartment would very much be a showcase for us,” Niinami said in an interview in Tokyo. “I expected a lot of spectators from abroad to visit.”
“The financial losses will be huge,” Niinami said, estimating that Japanese companies could have had an approx. 10% increase in sales if fans had been allowed.
Having no domestic spectators could cost Japan’s economy 146.8 billion yen ($ 1.3 billion), according to an estimate by Takahide Kiuchi, an economist at the Nomura Research Institute.
“This is the time [when] we need to think about: what is the value of the Olympics? said Niinami. “I think the Olympics have lost [their] value.”
A great effort
This news was a blow to those, like Suntory, who had profited from an increase in spending. So far, more than 60 Japanese companies have spent a record amount on $ 3 billion at this year’s Olympics – and now many of them are worried about the return on investment.
Asked whether he thought the Olympics could still give Japanese companies a boost this summer, Niinami said: “More and more, I do not think so.”
Some companies have had to reassess their commitment significantly.
Akio Shinya, CEO of Tokyo Skytree, the world’s tallest TV tower, told CNN Business that his company had discussed last year “whether we should become a sponsor under this circumstance.”
Although it later decided to commit, it has since been forced to cancel various events, including a torch relay on the skyscraper’s viewing platform aimed at “raising the mood for the Olympics.”
“Because of Covid, this is not the right time,” Shinya said. “There was no mood to hold such a fine festival.”
According to the carmaker’s North American division, the decision was made in view of the “Covid-19 situation” in the country.
Michael Payne, former head of marketing at the International Olympic Committee, acknowledged the upward struggle for companies. “There’s no point in sugar coating. You know, this is not an ideal situation,” he said.
But Payne, who set up the Olympics’ global sponsorship program about four decades ago, predicts that companies “could still be pleasantly surprised by the potential hereditary benefit that comes from these very difficult games.”
“There is still an important opportunity,” he said. “I would not count it all yet.”