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As legend has it, Don Melchor de Concha y Toro, founder of Chile’s largest winery Concha y Toro, used to keep thieves away from his private reserve collection by spreading the rumor that the devil lived in the cellar, hence the name Casillero del Diablo, or devil’s cellar. But these days Concha y Toro has enlisted the help of some different devils to grow its brand globally.

In May, Concha y Toro signed a three-year sponsorship deal with England’s Manchester United football club, nicknamed the Red Devils, one of the most popular professional sports teams in the world.

The official partnership launch, to be attended by the Club’s manager Sir Alex Ferguson and the players, will take place in August on the hallowed turf of Manchester United’s stadium, Old Trafford.

Under the terms of the agreement, Concha y Toro wines including Casillero del Diablo, Marqués de Casa Concha and Terrayuno will be stocked in the lounges, boxes and bars of Old Trafford from the beginning of the 2010/11 season.

More importantly for the winery’s global marketing strategy, it will have its name on the digital billboards surrounding the field. Considering United’s home games are watched on television by close to one billion people worldwide, that is a huge market of potential wine consumers.

“With its global exposure, Manchester United is a perfect match for us,” said Rodrigo Maturana, Foreign Offices Marketing Manager at Concha y Toro.

Concha y Toro produced 38% of Chile’s bottled wine exports in 2009 and its wine is sold in 135 countries including the United Kingdom, which is the winery’s number one export market, followed closely by the United States.

But selling more wine in the UK was not the main attraction of the Manchester United deal, explained Maturana.

“United is such a strong brand that it will be a good ally for Concha y Toro to build our brand awareness around the world,” said Maturana.

United, like Concha y Toro, is a global brand with some 333 million fans in Europe, Latin America, North America and especially Asian countries where United is increasingly popular.

“Football is so popular globally that it can attract a lot of new consumers who are just starting to drink wine and know about our brand,” said Maturana.

The Chilean winery plans to use images of United players in promotions later this year with slogans like ‘win a shirt signed by [United star forward] Wayne Rooney’ or ‘Casillero del Diablo invites you to Old Trafford.’

The agreement also entitles Concha y Toro to organize an event once a year with the players, advertise in the club magazine Inside United, which is published in Indonesian, Cantonese and English, and use match tickets as gifts for clients or prizes in Internet contests.

“They are open for us to use their team in as many ways as possible, which benefits both of us,” said Maturana.

It also helps that United’s Manager, Sir Alex Ferguson, is something of a wine connoisseur himself.

"Like United, [Concha y Toro] is a company with a lot of history that, while never afraid to change, has always kept hold of its roots," said Ferguson in a press release.

"This is a partnership that unites the two great passions in Latin America: football and wine. I'm looking forward to it."

Devils in the details

Manchester United approached Concha y Toro about becoming the club’s official wine sponsor in December 2009, and the deal was closed in May.

From United’s perspective, Concha y Toro is a brand that fits the club’s core values of “excellence, innovation and excitement,” said Richard Arnold, the club’s commercial director.

Concha y Toro joins a list of official sponsors that includes Audi, Budweiser, Turkish Airlines, Betfair.com, Korea’s Kumho Tires and Chinese high-tech company Aigo, in addition to the club’s main 2010/11 sponsors: insurance brokerage AON Corporation and Nike.

“The Club aims to partner with the best companies in their field ... Concha y Toro is clearly an organization that strives for excellence and is ambitious to improve,” said Arnold.

According to Arnold, the negotiations were conducted “in an extremely professional manner – an example to other companies.”

But they were nearly derailed by February’s devastating earthquake. Like other Chilean wineries, Concha y Toro lost around 10% of its stock in the destruction and many of its workers lost their homes.

“We were very keen to partner with Concha y Toro and wanted to give them all the space and time they needed to take stock and assess what they wanted to do,” said Arnold.

But Concha y Toro recovered and only lost one week of production due to the quake. “We got back on our feet very quickly,” said Maturana.

Concha y Toro, in partnership with the charity CasaBásica, is now helping rebuild houses in its main winemaking area, the Colchagua valley south of Santiago, and United also plans to help out.

“We hope that through our charity, the Manchester United Foundation, the Club can work with Concha Y Toro to help rebuild communities that need it,” said Arnold.

Although the financial value of the deal has not been made public, it is “an important investment,” said Maturana. Concha y Toro also sponsors the Chilean football team Universidad Catolica, but the agreement with United is a much bigger marketing gamble.

If it pays off, Concha y Toro hopes to extend the deal. “We really need three to five years to have a real impact and build up our brand recognition,” said Maturana.

But that also depends on the strength of the Manchester United brand. Although the team continues to draw new fans and win games – United finished a narrow 2nd to Chelsea in Barclays Premier League in 2009/10 - the Club’s owners, the American Glazer family, are deep in debt after buying a controlling stake in the club in 2005.

The Glazers are also despised by many United fans for raising ticket prices and failing to retain star Portuguese international Cristiano Ronaldo last year. But Maturana does not expect Concha y Toro’s deal to be affected by these problems.

“We made the deal with the club and the team, not with the owners,” he said.

Building a premium brand

By associating with one of the top clubs in the English premiership, Concha y Toro is hoping to change the image of Chilean wine internationally and, in the process, increase demand for its premium wines.

The idea is to make football fans associate Concha y Toro with premium, or oak-aged, wines, which is why its campaign will feature Casillero del Diablo and higher end wines like Terrayuno and Marqués de Casa Concha.
 
“A lot of people don’t think Chilean wine is good quality, but we are trying to change that image because Chile produces great premium wines,” said Maturana.

Still, other Chilean wineries can only dream of Concha y Toro’s marketing clout. “Concha y Toro is probably the only winery brand name that has truly global reach,” said Michael Cox, the UK Director of the Chilean wine industry association Vinos de Chile.

“The deal especially helps them in their progress to make further inroads into the Far East markets where United’s brand strength is very strong,” said Cox.

Japan and South Korea are key markets for Casillero del Diablo partly because a Korean, Park Ji-Sung, plays for United. “The team has many followers in Asia and we hope to build on that,” said Maturana.

Of course, most of United’s fanbase watches their team on television, so Concha y Toro is negotiating with ESPN for the sponsorship rights to games shown in Latin America and other markets.

As for the U.S. market, Maturana’s “dream” is to sponsor the New York Yankees or the New Jersey Devils, but he is limited by the company’s marketing budget.

At any rate, United has millions of fans in North America and after the World Cup in July the club will play several exhibition games in Canada and the U.S.

“We hope the team also comes to South America in the short-term, but this is a complete package for us in terms of global and local exposure,” said Maturana.

Global marketing

Concha y Toro’s deal with Manchester United is groundbreaking, not just for a wine brand but for any Chilean company.

“The deal marks a turning point in the internationalization of Chilean companies,” said Andrés Palma, head of corporate affairs at Chilean public relations firm Tironi Asociados.

Other companies like LAN Airlines have sponsored sporting events such as tennis tournaments, but this is the first time a Chilean firm will sponsor a top tier football club in Europe.

“Concha y Toro has developed a global communications strategy, not just by sponsoring individual events but by maintaining a permanent presence in spaces of high exposure,” said Palma.

Being the club’s ‘official wine’ will also allow Concha y Toro to offer wine tastings at Old Trafford, which should drive all-important word-of-mouth advertising, said Palma.

But few other Chileans companies have the money and brand power to launch global marketing campaigns.

“I don’t think other top Chilean retail brands are in the condition to follow in Concha y Toro’s footsteps,” said Emilio Sanfuentes, the general manager of public relations agency Burson-Marsteller’s Chile office.

“Concha y Toro is the only company that has a significant market share at a global level and enough brand power to take such a leap forward,” he said.

But that’s not the case in the services sector where LAN could follow Concha y Toro given its excellent reputation and presence in other markets, especially in Latin America, said Sanfuentes.

“LAN has already shown interest in becoming a global brand by sponsoring the Key Biscayne tennis tournament in Miami,” noted Sanfuentes.

Other Chilean companies with global aspirations, such as technology firm Crystal Lagoons which builds huge salt-water lagoons, could consider global marketing campaigns to raise brand awareness, said Sanfuentes.

But they need lots of cash and shareholders willing to support a long-term marketing strategy, said Palma, adding that sponsoring a professional sports team is not for everyone.

“There must be affinity between the brand being sponsored and the sponsor,” he said.

There is clearly brand synergy between Concha y Toro and United, but football may not suit other brands. “Where should salmon producers or fruit exporters be? Probably not in a stadium, but they should be exploring new formats of mass publicity,” said Palma.

Such formats, he adds, might include reality TV shows or PR events in foreign cities like Paris, Milan or New York.

As Chile advances towards its goal of becoming a developed country by 2018, it will not only require more investment but also companies with the imagination and drive to market themselves to consumers around the globe.

Concha y Toro has recognized the value of the global exposure offered by one of the most powerful brands in sport and continues to strengthen its brand in foreign markets. Whether other Chilean companies follow suit remains to be seen, but the door, at least, has been opened.

From United’s red shirts, to the club’s nickname and Sir Alex Ferguson’s love of wine, the two brands look to be a match made in heaven, or maybe in the other place since it was, after all, the Red Devils that brought them together.

Julian Dowling is Editor of bUSiness CHILE