Steep declines in pari-mutuel wagering on horse racing are analogous to the struggles of iconic Coca-Cola brands. Beverage Digest reports that sales of the flagship Coca-Cola drink (as measured in billions of cases) fell by 9.4% between 2007 and 2013. Diet Coke did much worse, plummeting by 19.2%.
Coca-Cola leaders and industry analysts tend to differ on how Coca-Cola should respond to the unfamiliar world it faces, a world characterized by marked changes in consumer tastes and stagnant global sales of soft drinks. Top executives at Coca-Cola view the situation as one that can be turned around by significantly increasing expenditures for advertising and sports sponsorships. But many analysts outside Coca-Cola believe that sales of carbonated soft drinks are in a largely irreversible downward trend due to cultural changes having to do, for example, with concerns about health. In the latter view, Coca-Coca’s ideal strategy, given the circumstances, is diversification into new kinds of beverages.
The same sort of difference of opinion about appropriate strategy is seen in the horse racing industry. As pari-mutuel wagering has deteriorated, the racetrack companies have diversified away from horse racing into alternative forms of gambling. Horse racing has been maintained in the product line, but not aggressively cultivated.
Horse racing does not have access to the billions of dollars that Coca-Cola is committing to its effort to reverse its sagging soft-drink fortunes. But racing does have an intrinsic strategic advantage that purveyors of bubbly sugar water do not possess. Wagering on horse racing is an intangible and can be delivered digitally almost anywhere via the information and communications technologies so ingrained in hurried present-day lifestyles. Continually embracing new ways of combining the centuries-old sport of horse racing with the latest in technologies is the best bet for keeping the sport relevant in an age in which even venerable Coca-Cola drinks are faltering.
Copyright ©2014 Blood-Horse Publications. Used with permission.
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