As Gatorade turns 60, the brand remains dynamic, expanding into new categories, from unflavored water to energy drink mixes.
Since its founding in 1965, Gatorade has been the dominant sports drink. It will account for 63.5% of the U.S. sports drink market in 2023, according to Euromonitor International.
owner Pepsi’s main competitor Coca Cola Rounding out the second and third spots are Powerade (Gatorade’s perennial No. 2 choice) and Bodyarmor (a new addition to its portfolio). But Coca-Cola’s two brands combined account for only about a quarter of the U.S. sports drink market. Last year, PepsiCo reorganized its product portfolio to include Propel, Muscle Milk and other fitness-related brands under the Gatorade umbrella.
But Gatorade’s dominance doesn’t mean it can rest on its laurels. As more competitors enter the market, the brand attempts to reinvent itself.
“The industry has probably changed more in the past five years than it did 20 years ago,” said Rabobank beverage analyst Jim Watson.
PepsiCo’s rivals are venturing into new product areas in an attempt to capture its market share. Unilever In 2020, it acquired beverage mixing company Liquid IV for an undisclosed amount; Gatorade’s individually packaged moisturizing powder is similar to the upstart’s. Nestlé Health Science acquired hydration tablet maker Nuun in 2021, the same year Coca-Cola acquired Bodyarmor.
As Coca-Cola acquires Bodyarmor, it buys a brand that can raise the price of its sports drinks thanks to its marketing as a healthier option. Coca-Cola’s other sports drink, Powerade, is generally cheaper than Gatorade, making it attractive to consumers looking for a deal.
“That means they have a different, better story to tell retailers to try to get more shelf space and take some away from Gatorade,” Watson said. “That’s where Gatorade has to come up with all kinds of new innovations so they have new stories to tell retailers so they can keep all that shelf space.”
Even smaller brands without the firepower of Coca-Cola or Unilever have been putting pressure on Gatorade. PepsiCo CEO Ramon Laguarta calls influencer Logan Paul’s Prime Energy a brand taking share from Gatorade.
“It’s true that Prime’s presence in the category has taken some share away from Gatorade, but not as much as other brands in the category or as large as the brand’s size,” he said on the company’s third-quarter conference call. A smaller proportion.” In October, as summer turned into fall, Prime’s market share weakened.
According to a February report from Citi Research, Gatorade’s market share should increase this year, but it may still decline from last year.
Gatorade President Mike Del Pozzo told CNBC that this kind of competition is good for the entire category and demonstrates the strength of the Gatorade brand itself.
“There are a lot of loud voices right now trying to make a name for themselves,” Del Pozo said. “It’s a very competitive industry and because we’re in the sports industry we love to compete. Obviously we’re winning and I think a lot of them spend more time talking about us than they do talking about their own brands, consuming method.”
Gatorade, for its part, has been thinking about marketing its products to consumers. Del Pozo said the lines between hydration and health have blurred, with more consumers focusing on hydrating throughout the day, not just during exercise.
He said they now favor low-sugar or sugar-free drinks, as well as “functional” drinks that tout health benefits such as immunity-boosting and alkaline water.
Gatorade has responded with new products: Gatorade Zero Sugar, an immune-support pill containing vitamin C and zinc, a Pedialyte-like product called Gatorlyte, a tablet containing caffeine-derived products, and the first unflavored alkaline water (launched nationwide in February).
“It’s a good start so far, but we’re very patient to get it right,” Del Pozo said of Gatorade water, which has about five times the electrolytes of classic Gatorade. one part.
So far this year, Gatorade has grown share in every hydration product category it owns, according to market research firm Circana. Del Pozzo said Propel’s annual sales are expected to top $1 billion for the first time this year.
Rabobank’s Watson said Gatorade’s long history gives the brand the ability to enter new categories and blur the lines.
“This is one of the brands that has the best marketing campaign, such great brand equity, consumer awareness and consumer love,” he said.
Currently, Gatorade Classic remains the brand’s best-selling product.
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