Gatorade enters new categories — even unflavored water — as competition to hydrate consumers ramps up

As
Gatorade
approaches
its
60th
birthday,
the
brand
is
staying
spry,
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
U.S.
sports
drink
market
in
2023,
according
to
Euromonitor
International
data.

Owner


PepsiCo’s
archrival


Coca-Cola
takes
the
second
and
third
slots
with
Powerade,
a
perennial
No.
2
choice
to
Gatorade,
and
Bodyarmor,
a
newer
addition
to
its
portfolio.
But
combined,
Coke’s
two
brands
account
for
only
about
a
quarter
of
the
U.S.
sports
drink
market.
Last
year,
Pepsi
reorganized
its
portfolio
to
house
Propel,
Muscle
Milk
and
other
fitness-related
brands
under
the
Gatorade
name.

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

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

Pepsi’s
rivals
are
looking
to
steal
its
market
share
as
they
branch
into
new
products.


Unilever
bought
drink
mix
company
Liquid
I.V.
in
2020
for
an
undisclosed
amount;
Gatorade’s
individually
packaged
hydration
powders
resemble
the
upstart’s.
Nestle
Health
Science
bought
hydration
tablet
maker
Nuun
in
2021,
the
same
year
that
Coke

bought
Bodyarmor.

With
Coke’s
acquisition
of
Bodyarmor,
it
bought
a
brand
that
could
price
its
sports
drinks
higher,
thanks
to
its
marketing
as
a
healthier
option.
Coke’s
other
sports
drink,
Powerade,
is
typically
cheaper
than
Gatorade,
appealing
to
consumers
looking
for
a
deal.

“That
means
they
have
a
different
and
better
story
to
tell
the
retailers
to
try
to
get
more
shelf
space
and
to
take
some
of
that
from
Gatorade,”
Watson
said. “That’s
where
Gatorade
has
to
come
up
with
all
kinds
of
new
innovations
so
they
have
a
new
story
to
tell
the
retailers
so
they
keep
all
of
their
shelf
space.”

Even
smaller
brands
without
the
firepower
of
Coke
or
Unilever
have
been
putting
pressure
on
Gatorade. 
PepsiCo
CEO
Ramon
Laguarta
called
out
influencer
Logan
Paul’s
Prime
Energy
as
one
brand
stealing
share
from
Gatorade.

“It
is
true
that
the
emergence
of
Prime
in
the
category
took
some
share
from
Gatorade,
[though]
less
than
other
brands
in
the
category
or
less
proportionally
to
the
size
of
the
brand,”
he
said
on
the
company’s
third-quarter
conference
call
in
October,
adding
that
Prime’s
market
share
weakened
as
summer
turned
to
autumn.

Gatorade’s
market
share
should
improve
this
year
but
will
likely
still
fall
from
the
prior
year,
according
to
a
Citi
Research
note
from
February.

Gatorade
President
Mike
Del
Pozzo
told
CNBC
that
the
competition
is
good
for
the
category
overall
–
and
shows
his
brand’s
own
strength.

“There’s
plenty
of
loud
voices
right
now,
trying
to
make
a
name
for
themselves,”
said
Del
Pozzo. “This
is
a
competitive
business,
and
because
we’re
in
the
business
of
sports,
we
love
competition.
Clearly,
we’re
winning,
and
I
think
many
of
them
are
spending
more
time
on
talking
about
us
and
less
about
their
own
brand,
the
consumer
approach.”

For
its
part,
Gatorade
has
been
thinking
about
its
own
pitch
to
consumers.
Del
Pozzo
said
that
the
line
between
hydration
and
wellness
has
blurred,
and
more
consumers
are
focused
on
hydrating
throughout
their
day,
not
just
during
exercise.

They
now
like
low-
or
no-sugar
drinks, “functional”
beverages
that
tout
health
benefits
like
improving
immunity
and
alkaline
water,
he
said.

Gatorade
has
responded
by
branching
out
with
new
products:
Gatorade
Zero
Sugar,
tablets
with
vitamin
C
and
zinc
for
immune
support,
a
Pedialyte
lookalike
called
Gatorlyte,
a
caffeinated
spinoff
called

Fast
Twitch
and
its
first
unflavored
alkaline
water,
which
launched
nationwide
in
February.

“It’s
off
to
a
great
start
so
far,
but
we
were
super
patient
to
get
it
right,”
Del
Pozzo
said
about
Gatorade
Water,
which
has
about
a
fifth
of
the
electrolytes
found
in
classic
Gatorade.

Year
to
date,
Gatorade
is
gaining
share
in
every
hydration
category
it
has
products,
according
to
market
research
firm
Circana.
And
Propel’s
annual
sales
are
projected
to
cross
$1
billion
for
the
first
time
this
year,
Del
Pozzo
said.

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

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

For
now,
classic
Gatorade
remains
the
brand’s
top
seller.