Gatorade is expanding into new products including plain water – Business News (Trending Perfect)


As Gatorade approaches its 60th birthday, the brand remains energetic, branching out into new categories from unflavored water to energy drink mixes.

Since its founding in 1965, Gatorade has been the dominant sports drink. It accounted for 63.5% of the US sports drink market in 2023, according to data from Euromonitor International.

What is with you PepsiCo Arch-rival coca cola It ranks second and third with Powerade, Gatorade's perennial No. 2 choice, and Bodyarmor, a more recent addition to its portfolio. But Coca-Cola's two brands combined represent only a quarter of the U.S. sports drink market. Last year, Pepsi reorganized its portfolio to include Propel, Muscle Milk and other fitness-related brands under the Gatorade name.

But Gatorade's dominance doesn't mean it can rest on its laurels. As more competitors entered the market, the brand tried to reinvent itself.

“There has probably been more change in the industry in the last five years than there was 20 years ago,” said Jim Watson, beverage analyst at Rabobank.

Pepsi's competitors are looking to steal market share by branching out into new products. Unilever Liquid Mix Company purchased Liquid IV in 2020 for an undisclosed sum; Gatorade's individually packaged hydration powders are similar to entry-level hydration powders. Nestle Health Sciences bought hydration tablet maker Nuun in 2021, the same year Coke bought Bodyarmor.

With Coca-Cola's acquisition of Bodyarmor, it bought a brand that could price its sports drinks higher, thanks to its marketing as a healthier option. Coca-Cola's other sports drink, Powerade, is usually cheaper than Gatorade, attracting consumers looking for a deal.

“It means they have a different and better story to tell retailers by trying to get more shelf space and take some of it away from Gatorade,” Watson said. “This is where Gatorade has to come up with all kinds of new innovations so they have a new story to tell retailers so they retain all their shelf space.”

Even smaller brands that don't have the firepower of Coca-Cola or Unilever have been putting pressure on Gatorade. PepsiCo CEO Ramon Laguarta called Prime Energy influencer Logan Paul one of the brands stealing share from Gatorade.

“It is true that Prime's presence in this category has taken some share from Gatorade, [though] “Less than other brands in the category or less proportional to the size of the brand,” he said on the company's third-quarter conference call in October, adding that Prime's market share had weakened as summer turned to fall.

Gatorade's market share should improve this year, but will likely decline from the previous year, according to a February Citi Research note.

Gatorade President Mike Del Pozo told CNBC that the competition is good for the category overall — and shows the strength of his brand.

“There are a lot of loud voices right now that are trying to make a name for themselves,” del Pozo said. “This is a competitive business, and because we're in the sports business, we like to compete. And obviously we're winning, and I think a lot of them spend more time talking about us and less time talking about their own brand, consumer approach.”

For its part, Gatorade was considering offering its own offering to consumers. Del Pozo said the line between hydration and health is blurring, and more consumers are focusing on hydration throughout their day, not just while exercising.

He added that they now like low- or no-sugar drinks, which are “functional” drinks that tout health benefits such as improved immunity and alkaline water.

Gatorade responded by branching out with new products: Gatorade Zero Sugar, tablets containing vitamin C and zinc for immune support, a Pedialyte lookalike called Gatorlyte, a caffeinated spin-off called Fast Twitch and the first unflavored alkaline water, which was launched worldwide. country in February.

“It's been a great start so far, but we've been very patient to get it right,” Del Pozo said of Gatorade water, which contains about one-fifth the electrolytes of classic Gatorade.

Year-to-date, Gatorade is gaining share in every hydration category in which it has products, according to market research firm Circana. Del Pozo said Propel's annual sales are expected to exceed $1 billion for the first time this year.

Gatorade's long history has given the brand the ability to enter new categories and blur the lines, according to Rabobank's Watson.

“This is one of the brands with the best marketing campaigns, such as great brand equity, consumer awareness and consumer love,” he said.

For now, classic Gatorade remains the brand's best-seller.



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