Comment - Soft Drinks & Water - Olympic Tension for Sports Drinks
The flags have been folded away, the medals handed out and the Olympic flag handed to the Mayor of Rio: London 2012 is over and Richard Corbett, like many, enjoyed it. But, did sports drinks producers get as much from the Olympics as he did?
Only the Olympics can get you transfixed for sustained periods of time by events like archery or taekwondo just because a compatriot has an outside chance of a medal. It is for this reason that the global beverage heavyweights responsible for the big sports drinks brands got their cheque books out once again and invested sizeable amounts to be associated with the Games. No other sporting event offers such an opportunity to reach the audience for sports drinks.
According to beverage researchers Canadean, the sports drink market is big business: Around the world, we drink more than 11bn litres of the stuff, which is in excess of one-and-a-half litres per capita; enough to fill 4,457 Olympic swimming pools. Of course, that is nowhere near CSDs, but sports drinks sell for nearly 50% more than regular soft drinks and that is what justifies the big players' huge marketing spend.
Authenticity is key, that is why advertising activity often has a scientific slant to it. No expense is spared to sign up global sporting superstars to be pictured training and guzzling the relevant product, often with somebody in a white coat nearby measuring something. The Olympics is where many of these sporting superstars congregate.
Timing is also an important part of the marketing mix. It is probably no coincidence that the British Medical Journal chose this month to publish a series of articles disputing the advertising claims of the sports drinks and training shoe players. Not surprisingly the British Soft Drinks Association and the American Beverage Association have had their noses put out of joint: It is criticism from a high-brow source that undermines the credibility of the products of some of their members. It will rankle a bit when you think they have just invested a small fortune supporting and promoting the greatest show on earth. The Olympics is Christmas for sports drinks.
I have some sympathy with the ABA and the BSDA because there is undoubtedly science behind the drinks. Science is expensive and that is why just three companies - Coca-Cola Co, PepsiCo and GSK - account for two-thirds of the world’s sports drink sales. You have to have the resources to develop products in a part of the drinks market that is bordering on pharmaceutical.
There are many that agree with the two trade associations when they say that the British Medical Journal is guilty of cherry-picking the scientific studies to bash the sports drink industry.
There is, of course, likely to be some gap between the science and the advertising. No ad agency would be doing its job without exaggerating the claims of its client a little bit. The problem with sports drinks is that a lot of the people who drink them have not undertaken strenuous activity. They may be appropriate to Usain Bolt after an intensive training session but not for the rest of us, who have not. Sports drinks are too often consumed for refreshment not for replenishment. For this reason, they probably have as high a profile in convenience stores and garage forecourts as they do in gyms and sports clubs. It is for this reason more than a shortfall in their scientific credibility that make sports drinks vulnerable to criticism. Sports drinks are often contributing to the obesity issues so well-publicised in the developed world.
The ABA and the BSDA are right to defend their corner, though, because they have much to lose from any backlash against sports drinks. UK drinkers consume nearly three litres of sports drinks each per year, while Americans consume as much as 15 litres, considerably more than the global average. In fact, the US accounts for four in every ten litres of sports drinks consumed around the world, according to Canadean.
If the US sports drinks market sneezes, then it is likely that the global sports drinks market will catch a cold.
- Can craft breweries compete in lager arena?
- SABMiller's Q1 sales performance by region - Focus
- A Wild Geese, Pernod Ricard conspiracy theory?
- Remy Cointreau's Q1 performance by brand, region
- A snapshot of the UK spirits market - Focus
- Diageo appoints new Smirnoff head
- Brown-Forman takes distribution in Spain in-house
- AB InBev halts VAIP incentive plan
- New Hendrick's Gin would have to be "unusual"
- Gruppo Campari trials Negroni pre-mix
- Adultifying Soft Drinks; Capitalizing on rising adult demand for non-alcoholic beverages
- Global RTD insights - market forecasts, product innovation and consumer trends
- Global non-Scotch whiskies insights - market forecasts, product innovation and consumer trends
- Global travel retail insights - market forecasts, product innovation and consumer trends
- Global Scotch whisky insights - market forecasts, product innovation and consumer trends