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Sports Biz
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Pepsi [PBG
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] announced today a group of new products, including G2, a Gatorade with half the calories of your normal variety Gatorade. While Pepsi called this innovative and new, it's actually part of a strategy that failed more 25 years ago.
I know because I happen to be the foremost expert of Gatorade in the world--maybe with the exception of a few people who actually work there. For those of you who don't know, I wrote the book on the brand's history, "First in Thirst."
The drink was called Gatorade Light. And it was specifically geared to women who wanted to be hydrated during workouts, but didn't want to put all the calories back. It all made sense. Gatorade, throughout its history, has always been challenged by folks who ask exactly why they need Gatorade over water. It does, after all, take about 15 minutes at 6.0 on the treadmill to burn off a full bottle of the stuff.
Gatorade Light never worked, mostly because the people running the brand were concerned that coming out with a Gatorade Light would send the wrong message to those who were drinking "full-bodied" Gatorade.
So what's the difference now?
Well, first of all, the sports drink category isn't as defined as it once was. Gatorade, which still has an 80 percent market share, is getting challenged in the water, energy drink and enhanced water space. So much so that Pepsi's Gatorade is now competing more for mindshare and shelf space with Coca Cola's [CCH
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] Vitaminwater than it is Coca Cola's Powerade. Part of this has to do with the fact that Pepsi's enhanced water, Sobe LifeWater, doesn't have nearly the traction that Vitaminwater has. It's why Coke agreed to pay $4.1 billion for it.
Gatorade is also a changed brand. Back in 1990, there weren't any sub brands. Today, we have Fierce, Endurance Formula and the lighter flavored Rain to go along with its enhanced water brand Propel. This means that Pepsi is less sensitive towards affecting the core brand so much.
Finally, as Gatorade has grown, so too has its use. There are more people than ever before drinking Gatorade with their pizza and that means that while they won't specifically market it that way, they're better off coming out with a lower calorie version than have that non-athletic user switch over to another non-carbonated alternative. Or perhaps better put, they are doing better business if they are willing to cannibalize themselves to save potential exposure to the competition.
Although it wasn't a fair comparison, Coke made Pepsi uncomfortable when it compared its 10 calorie Option water against the 50 calorie per serving Gatorade in commercials.
We expect the next move to come from Coke since Vitaminwater is actually just as high in calories as Gatorade (part of this announcement included the reducing of calories in its LifeWater too). I've only been able to find the lower calorie Smartwater on the East Coast.
Questions? Comments?
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