67 Coronga Crescent
Killara  NSW  2071
scribepj@bigpond.com
0434 715.861 mob
9498.3684 home ph

22 March 2011

Sara Lee Australia                                       02 9551 3000 ph
35-37 Ryde Rd                                                            
Pymble NSW 2073                                         

Attention: Amy Castaldo                             Amy.Castaldo@SaraLee.com             

 

Dear Sir/Madam

Invitation to align Piazza D'Oro Espresso, which recognises the need for a sustainable future, with the burgeoning bicycle sport by -

a)                 the Piazza D’Oro Espresso logo prominently appearing on the front and back of 50 bicycle jerseys in Piazza D’Oro Espresso colours purchased and worn by Muggaccinos.com Cycle Group which also displays -
*        Team Muggaccinos across the top of the front; and
*        Hornsby Cycles (bicycle shop) across the top of the back,
hereinafter the generic Piazza D'Oro Espresso bicycle jersey and the property of Sara Lee Australia to sell to other interested bicycle groups, and individuals, across Australia 

b)                 display in Sara Lee’s Pymble office a 500mm x 400mm photo of at least 30 Muggaccinos cyclists wearing the generic Piazza D’Oro Espresso bicycle jersey; and

c)         hang a framed generic Piazza D’Oro Espresso bicycle jersey in large cafes that serve Piazza D’Oro Espresso coffee that are frequented by cyclists

Piazza D’Oro Espresso would not pay the $750 ‘in toto’ Sole Coffee Sponsorship Fee until all the Conditions Precedent in Annexure “B” are achieved

Opportunity to increase demand for the generic Piazza D’Oro Espresso bicycle jersey by a bicycle component supplier logo also appearing on the initial 50 generic Piazza D’Oro Espresso bicycle jerseys

 

1.        Background

Saeco sponsored an international road cycling team which won the Giro d'Italia in 1997, 2003 and 2004 and merged into Lampre in 2005, no doubt with a large annual budget.

Muggaccinos.com is a recreational road bicycle group which has conducted +100km recreational road rides each Sunday since 1996 which attracts between a dozen and 15 road cyclists on fine weather Sundays. 

Muggaccinos is an Incorporated Entity, Muggaccinos Inc.

Its recreational Sunday bicycle rides cover the entire perimeter of Greater Sydney visiting over 50 different cafes each year.

Muggaccinos cyclists want their own dedicated bicycle jersey which epitomises that their riders are a coffee drinking, cake eating, cycle group which marches on its stomach.

Due to our name and ethos, we would like to attract a leading coffee, or coffee equipment, providor to agree the design of an initial order of 50 jerseys which prominently display their logo on the front and back of the jersey in their products’ marketing colours.

Muggaccinos cyclists are happy to have Hornsby Cycles prominently displayed across the top of the back of its initial order of 50 jerseys, because –

(a)       the owners, Peter and Cathy, are friendly, ethical bicycle retailers – feel free to ‘phone Cathy at their shop 9477.3738 about this invitation, as Peter only works there on weekends; and

(b)       Hornsby is central to many Muggaccinos ride starts.

2.        Why align Piazza D’Oro Espresso coffee products with cycling? 

Cyclists who ride with Muggaccinos are proud of their ride group which has existed since 1996, with some cycling 300km a week.  Cyclists like to wear a jersey which has an international ambience.  When I cycled from Bordeaux to Barcelona over the Pyrénées in 2000, Piazza D’Oro Espresso was available in cafes in Bordeaux.   Piazza D’Oro Espresso coffee is sold at our most visited pie shop, Pie in the Sky, Nth Cowan.  Many cyclists like drinking fresh coffee whilst visiting cafes either during their rides, or after them, because the social element within a community group is integral to cycling.

 

3.         Description of the generic bicycle jersey 

This letter invites you to accept this Sole Coffee Sponsorship Invitation to have the Piazza D’Oro Espresso logo prominently appear on the front and back of an initial order of 50 bicycle jerseys (paid for by the writer and then purchased by 50 Muggaccinos cyclists) which would be in Piazza D’Oro Espresso colours.  A Piazza D’Oro Espresso logo could also appear on each upper arm, with Team Muggaccinos (in red text) appearing across the top of the front and Hornsby Cycles appearing across the upper back (in black text) which would facilitate greater sales as the bicycle shop receives favourable publicity and enables easier sales and collection by additional purchasers.  Alternatively, a bicycle component supplier’s logo (eg. Schwalbe or Michelin bicycle tyres) could appear on the upper arms which would add integrity and enable cross-marketing benefits to both the coffee merchant and the bicycle component supplier.

4.         Why is the jersey called Generic?

As explained in clause III. of Annexure “A” Eight Benefits To Sole Coffee Sponsor, Piazza D’Oro Espresso could sell the generic Piazza D’Oro Espresso bicycle jersey on their website to other ride groups/clubs with their ride group’s name on the front and their local bike shop on the back.  Or their ride group’s name on the front and back, if other interested ride groups did not want to align with a particular bike shop as I am prepared to do with Hornsby Cycles.

 

5.         Importing jerseys directly from China is materially cheaper

I have purchased and imported two Litespeed bicycle framesets air freight from the Tucson USA and two bicycle framesets sea freight from Xi’an China, the later necessitated me purchasing Digital Certificates from VeriSign to lodge a Self Assessed Clearance with Australian Customs.  I then collected the Framesets from CEO Global Logistics at Port Botany which was a big learning curve.

An order of 50 jerseys from Australian garment manufacturers cost approx $75 for short sleeve and $90 for long sleeve, with one-off design costs of up to $500.  I can purchase the same quality jerseys directly from China at approx 55% of those prices with lower design costs which would be delivered air freight by DHL.  I can show you one of their jerseys and other sample materials of their heavier Winter fabric, and the Chinese supplier’s item prices.

6.        Not all cyclists are welcome at some cafés due to thoughtless behaviour

You may be aware that not all café owners appreciate cyclists visiting their cafes.  I understand why.  Pattisons Patisserie on Mona Vale Rd, St Ives has banned a few cycle groups, but not Muggaccinos.

Not unsurprisingly, cyclists who commit the following sins do not endear themselves to most café staff or other patrons: 

(i)         making too much noise; or

(ii)        chewing their own snack bars in cafés.

Our regular cyclists are on the lookout not to allow rookie cyclists amongst us to commit the above faux pas.  Muggaccinos has never experienced a problem at a café because we do not commit (i) or (ii) above. 

7.         Conditions Precedent which must be achieved before Piazza D’Oro Espresso Australia would pay the $750 Sole Coffee Sponsorship Fee

Annexure “B” is “Conditions Precedent which must be achieved” to Piazza D’Oro Espresso Australia’s satisfaction prior to it paying Phil Johnston the once only $750 Sole Coffee Sponsorship Fee.

 

8.         My credentials 

Prior to retiring in 2007, I held various senior positions in Commonwealth Bank.  I have an Undergraduate Degree and a Master Degree in Applied Finance from Macquarie University.  I am adept at documenting agreements so that all parties know their duties, rights and obligations.

9.         Risks of the sponsorship 

There are over 30 different risks which a bank evaluates before embarking on a partnership venture.  These include credit, market, professional indemnity/3rd party liability and reputation risk.  Reputation risk is about the only pertinent risk.  The calibre and track-record of the management associated with any business venture is a high priority.  I invite you to meet a few of our working party for this jersey project. 

Muggaccinos is 16 years old.  It will be around for many more.  Muggaccinos.com website evidences my diligence to provide >100km hilly road rides each Sunday and long weekends cycling away, with a high emphasis on Risk Management.  Tony Henderson and Natelle Palfrey who work full time for Bicycle NSW will attest to my diligence. 

10.       Summary 

Compared to the cycle promotion costs that Saeco funded, $750 for a minimum of 50 jerseys seems low for the “Eight Benefits To Sole Coffee Sponsor” listed in Annexure “A”. 

I welcome any of your employees, or their friends, cycling with Muggaccinos on a Sunday +100km hilly ride or participating in our cycle weekends away. 

I would appreciate your ‘phone call to me 0434 715.861 to discuss this unique offer, predicated on material synergies existing between – 

·                    a recreational road bicycle group determined to promote road cycling with a coffee theme; and  

·                    a global coffee merchant. 

Yours sincerely

 

Phil Johnston