Can PepsiCo's (PEP) Gatorade rebound?

Posted Oct 7th 2007 3:10PM by Zac Bissonnette
Filed under: Industry, Consumer Experience, Competitive Strategy, PepsiCo (PEP)

PepsiCo's (NYSE: PEP) Gatorade brand has been struggling (WSJ subscription required) of late with competition from alternatives including Coca Cola's (NYSE: KO) Vitamin Water, a lower calorie, perhaps more-nutritious beverage. With the added pressure of aggressive pricing from Powerade, sales of Gatorade were down 2% in the last quarter, a sharp drop from the 29% increase in the prior year's quarter.

While PepsiCo expects Gatorade to rebound somewhat, its best days are probably behind it. People are realizing they just don't need that many calories in a drink, and Vitamin Water tastes just as good anyway.

The future of the Gatorade brand may very well rest squarely on the shoulders of G2, the company's soon-to-be launched lower-calorie alternative sports drink. Given the strength of the Gatorade brand, I like the company's chances with G2, and Coke may need to start worrying.

Tags: Coca-Cola, G2, Gatorade, inthenews, KO, PEP, PepsiCo, Powerade, sports drinks, Vitamin Water

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Reader Comments (Page 1 of 1)

10-09-2007 @ 12:18PM

Ana said...

Actually, Vitamin Water has as many calories as Gatorade (50 per 8 fl. oz.), which does not make it as healthy as your post suggests.... And Gatorade's hydration benefit has been proven through scientific testing over the past 3 - 4 decades. I've yet to see evidence of Vitamin Water's proven nutritional benefits....

10-10-2007 @ 9:12AM

Madison said...

Vitamin Water also has a very high sugar count to go along with all the extra/empty calories that it contains. It does contain vitamins but it does not compare to the vitamins that can be obtained by eating healthy and balanced meals. Gatorade is used to rehydrate and replenish electrolytes into the body and is proven to work. I've always enjoyed gatorade and will continue to drink it.

10-23-2007 @ 2:42PM

Lola said...

I think people are realizing that Gatorade has been proven to help athletes for years, while other beverages such as Vitamin Water have very little nutritional value and lots of sugar.