US: PepsiCo eyes more Gatorade innovation
Recent years have shown tepid sales results for Gatorade
PepsiCo has told just-drinks that it is looking to innovate further with its Gatorade sports brand.
The soft drinks giant is understood to be testing a series of new products under the Gatorade brand, that will cross over from beverages and into food also. According to local reports the firm is planning to launch a range of "energy and after-workout recovery" products, including energy bars, gels, protein shakes, and other energy boosters.
PepsiCo confirmed to just-drinks today (1 December) that it does have plans to "continue to innovate new sports nutrition products" for Gatorade. But, it declined to provide specific details.
Over the last two years, PepsiCo has sought to reinvigorate the Gatorade brand by tying it more closely to athletes, rather than positioning it as a mainstream sports drink.
There are signs that this has yielded some positive results. In PepsiCo's latest third-quarter results, non-carbonated beverage volume growth in North America was led by a 9% increase in Gatorade.
The group has also spoken of using Gatorade as a way in to nutrition. Earlier this year, PepsiCo said that it is looking to accelerate the growth of its nutritional segment, with a focus on Gatorade and newly-acquired Wimm-Bill-Dann.
Regarding potential plans to launch Gatorade energy bars, however, there is some caution among market observers. Speaking to just-drinks today (1 December), Datamonitor's consumer packaged goods analyst, Michael Hughes, outlined two key challenges: “The first is convincing athletes that these products should be incorporated into their existing training and sports regimes.
"The second is ensuring that brand prestige is not impacted among its core audience, because the new range of products become more associated with casual, non-athletic users.” Hughes said that PepsiCo risks getting “dragged into a price war among competitors” in an “already saturated” energy market.
In 2010, PepsiCo embarked on a US$30m rebranding campaign for Gatorade, relaunching the brand as 'G' and reformulating the beverage into a three-tiered line of drinks. Prior to that, the brand faced problems. In 2007, sales for the brand declined by mid-single digits. In 2008, PepsiCo scrapped plans to build a new plant for Gatorade in Oregon, due to lack of consumer demand.
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