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Gatorade changing its game plan

The sports-drink unit of PepsiCo is refocusing on competitive athletes after courting aspirational drinkers in the last two decades.

January 01, 2011|By Emily Bryson York

Battling back from a dismal 2009, Gatorade is refocusing on competitive athletes, and a new ad campaign seeks to carve out a market for three workout beverages.

The Chicago-based unit of PepsiCo Inc. is airing commercials that promote its G Series, a trio of drinks it introduced last year that target student athletes' needs before, during and after a workout or athletic event.

"It's a more holistic view," said Morgan Flatley, director of consumer engagement at Gatorade.

"In our mind there's a tremendous amount of opportunity for the types of product we can deliver in the future for before, during and after activities," Flatley added, hinting at Gatorade's plans to introduce products other than beverages next year.

In April, Gatorade plans to move beyond the high-school-age athlete to 18- to 24-year-old exercisers with G Series Fit, another trio of products designed for consumers involved in solo activities such as yoga or running. The new line will include energy bar bites, a low-calorie drink and a fruit-based protein drink.

PepsiCo's sports drink sales were hit by the recession as consumers limited their spending and Gatorade refocused on competitive athletes instead of the aspirational drinkers it had amassed over the previous two decades. In 2009, Gatorade volumes declined 16%, according to nonalcoholic-beverage industry newsletter Beverage Digest. The company's sports drink market share also took a hit when it discontinued several products, including Gatorade Tiger Focus in November 2009, Beverage Digest publisher John Sicher said.

"It became a brand which was cool to walk up and down the street with," Sicher said. "And in 2009, it lost some of that volume."

In April, Gatorade introduced the G Series, which helped boost PepsiCo's growth in the second quarter. Gatorade sales volumes were up 15% in 2010, and it has about 71% of the $6.7-billion sports-drink category, Beverage Digest said.

Gatorade "is basically taking the brand back to its core, which is a hydration beverage for athletes, and that has begun to resonate, which is why base Gatorade is back to double-digit growth," Sicher said.

As the original sports drink, Gatorade boasts a commanding market share, but it has dwindled over the last decade as the segment has expanded and competition has become fierce. Coca-Cola's Powerade is also popular with athletes, and its VitaminWater is seen as a lower-cost alternative, particularly for non-athletes. Sports drinks are designed to help with hydration and typically boast electrolytes and other nutrients.

Gatorade's ads seek to elevate the G Series above its competitors' products.

The commercials that recently started airing feature New York Jets running back LaDainian Tomlinson and Orlando Magic center Dwight Howard. A third commercial featuring Jamaican sprinter Usain Bolt is slated for this month.

The company has said that Gatorade is focusing on athletes, rather than couch potatoes who had been drinking it for the cool factor. The G Series is aimed at teenage athletes, and ads tout the benefits of each product.

In one of the new ads, the camera closes in on Tomlinson's dirty, sweaty face after a rough game as a voiceover describes how Gatorade Recover is helping his body prepare for the next one. Another ad depicts Howard on the bench during a basketball game, sipping Gatorade Perform to get a second wind, and then heading back in for a slam-dunk. Bolt will push Gatorade Prime early this year.

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