Hy-Vee seeks to fuel its growth with IndyCar partnership during Indianapolis 500

INDIANAPOLIS — Two-hundred-eighteen mph wasn't enough.

It was May 16, and Christian Lundgaard was growing frustrated with his car as he practiced to qualify for this Sunday's Indianapolis 500.

He'd be able to go about 5% faster during qualifying May 19, when the team could turn on the car's turbo boost. But starting from 218 wasn't going to get it done in a race where the average speed exceeds 230 mph.

He aborted his first run of the day on the fabled track in the No. 45 Hy-Vee Honda, telling his team the handling wasn't up to race standards: "Losing it. I'm free. It doesn't feel good."

For the next 20 minutes an engineer adjusted the car's left front wing. When Lundgaard went out again, the car was barely faster. With each lap, his average increased only incrementally.

Finally, he hit 221.561 mph. With an extra 10 mph on qualifying day, it turned out to be enough to grab the No. 28 spot among the 34 cars entered.

If there's a parallel between what Lundgaard and his main sponsor do, it's that attention to the margins. Just as in racing, where a few tenths of a mile per hour can make the difference between competing and watching from the pits, Hy-Vee's trade, running supermarkets, is a game of pennies. Convincing customers your products and services are worth a few cents more at the checkout can translate to millions of dollars.

One of the ways Hy-Vee does that is through image-enhancing sports promotions. For the fourth year, it will be the primary sponsor of Lundgaard's car in the Indianapolis 500, America's most-watched annual auto race. More than 330,000 fans will pack Indianapolis Motor Speedway and nearly 5 million will tune in on TV.

It's exposure Hy-Vee needs as it prepares to build its first Indianapolis stores, part of an expansion into Indiana and the Southeast that began with the recent purchase of northwest Indiana grocery chain Strack & Van Til. The stores' logo will adorn one of Lundgaard's troublesome front wings.

A group of executives from West Des Moines-based Hy-Vee will be on hand to watch the race, about 20 miles south of where the company plans to build two stores in booming northern Indianapolis suburbs.

Since 2020, Hy-Vee has spent millions sponsoring IndyCar, and this season it will be the title sponsor for four of the circuit's 17 races, or almost a quarter of the schedule.

It promotes its participation with television advertising and giving away three Chevrolet Corvettes to customers during the NTT IndyCar Season. There also was an appearance by Lundgaard on May 8 at Hy-Vee's flagship Grimes store.

Hy-Vee roughly breaks even on its IndyCar marketing, said Hy-Vee Executive Vice President Anna Stoermer. But IndyCar gives stores promotions to rally around in what normally would be quiet summers, she said.

And Hy-Vee's connection to the Indy 500 gives it exposure to people outside the chain's eight-state territory, Stoermer said.

"One of the lucky extras that has come from IndyCar is this national brand awareness," she said. "Especially in Indianapolis you have brand awareness because we're going there eventually. But the ability for people to see and learn about and ask questions about our brand has been cool."

Phil Lempert, a grocery industry analyst in Santa Monica, California, seconded that.

“Going into a market like Indianapolis where you’ve got recognition is certainly easier and less expensive than going into a market that has never heard the term ‘Hy-Vee,’” Lempert said.

'It's one of the most talked-about brands in the sport'

With Hy-Vee now in its fifth season of sponsoring IndyCar, the phrase “Hy-Vee Honda” has become as ubiquitous as Firestone references on IndyCar broadcasts. Hy-Vee has become one of the most important "consumer-facing" companies in the series outside IndyCar's engine manufacturers Honda and Chevrolet; its tire partner, Firestone; and legacy sponsors like Verizon, PNC Bank and Pennzoil, said Indianapolis Star motorsports reporter Nathan Brown.

In online fan forums, Indiana residents leave comments like "Hy-Vee stores are awesome! Cannot wait until they open the planned Indy stores," "Come to Indy," and, "We need Hy-Vee in Greenfield, IN!"

The chain has developed a loyal following of fans who seek out Hy-Vee stores when they're in Iowa for the annual Hy-Vee-sponsored IndyCar Iowa race weekend at the Iowa Speedway in Newton, Brown said.

"Hy-Vee is one of the few, if not the only big-time consumer brand that has come into the sport in the last five years, and they came in a big way," he said. "It’s one of the most talked-about brands in the sport right now."

All this happened quickly. Hy-Vee began its involvement with IndyCar In July 2020, sponsoring now Lundgaard-teammate Graham Rahal's No. 15 car for the second of two races at Iowa Speedway. He finished third, Lundgaard said.

In 2021 the chain sponsored Spencer Pigot's Indy 500 entry. The following year, it became a full-time sponsor of the No. 45 Rahal Letterman Lanigan Racing entry that Lundgaard now pilots. In 2022, it stepped up another notch, leading efforts to get Iowa Speedway, dropped from the circuit in 2021, back on the IndyCar schedule. It would become both the sponsor and promotor of two races there, as well as a concert with top-notch stars like this year's Post Malone.

That earned Hy-Vee a lot of credit with drivers, Lundgaard said.

"Iowa Speedway is safe to say not the best facility, but Hy-Vee make it look like (Indianapolis Motor Speedway) on race day," Lundgaard said. "The attention to detail and to how they deliver the message and deliver the product is extraordinary. They're doing everything right."

Sports marketing has long been a big part of the company's tool kit, Stoermer said. During the 2014 and 2015 World Series, its ads on the outfield walls of the Kansas City Royals' Kauffman Stadium exposed millions of people around the country to Hy-Vee. Since then the chain has endorsed athletes like Kansas City Chiefs quarterback Patrick Mahomes and all-time leading NCAA basketball scorer Caitlin Clark of the University of Iowa Hawkeyes.

In stepping up its involvement at Iowa Speedway, "it's about doing something great for the state of Iowa, about that rural community and being able to make it more vibrant by supporting this race out in Newton," Stoermer said.

In February Hy-Vee tripled-down on its IndyCar support when the chain announced plans to be the title sponsor of two 250-mile Labor Day Weekend races at the legendary Milwaukee Mile, one of America's oldest tracks.

It's rare that a sponsor goes from being outside the sport to part of its fabric this quickly, Brown said.

"They’ve jumped in feet first. Because of that they’ve become a really well-respected brand," he said.

What is next for Hy-Vee and IndyCar?

Those inside the IndyCar paddock are cautiously optimistic that Hy-Vee will continue sponsoring IndyCar well into the future, Brown said.

Stoermer said that Hy-Vee's focus is on getting through this year but that ticket sales for the July 13 and 14 Iowa Speedway Doubleheader are strong.

"I don't know for sure what the next steps are, but I know that we're all in for 2024," she said. "We're really gung-ho about the race season and look to make that decision here after this year's race. We've doubled down on our investment yet again, and to hopefully have another success at the speedway, and we'll take it from there."

But insiders are nervous that Hy-Vee may get more for its money from an IndyCar competitor. In March, Hy-Vee announced it would sponsor the NASCAR Xfinity Series race at Iowa Speedway June 15, part of a weekend that culminates with a top-tier Cup Series race, Iowa's first since 1953. Hy-Vee also became a sponsor at Kansas Speedway in Kansas City, Kansas, where NASCAR runs two Cup Series races per season.

When Hy-Vee revived the IndyCar race at Iowa Speedway, the goal always was to bring a Cup Series date there, Stoermer said.

"That's been one of the cooler things about our IndyCar sponsorship is that it's opened the door for the Iowa Speedway to get a huge event there," Stoermer said.

Philip Joens covers retail, real estate and RAGBRAI for the Des Moines Register. He can be reached at 515-284-8184, pjoens@registermedia.com or on Twitter @Philip_Joens.

This article originally appeared on Des Moines Register: How an IndyCar sponsorship is helping fuel Hy-Vee's growth