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PepsiCo and Coca-Cola in litigation over sports drinks -- Gatorade vs. Powerade

The war between Coca-Cola (NYSE: KO) and PepsiCo (NYSE: PEP) is becoming as fierce as the fight between the two monsters in the classic Japanese flick War of the Gargantuas (don't tell me you don't remember that one!).

This time, the conflict is over the duo's respective sports drinks. According to Bloomberg, PepsiCo believes that Coke has been promoting its Powerade beverage by issuing false claims against PepsiCo's Gatorade.

Continue reading PepsiCo and Coca-Cola in litigation over sports drinks -- Gatorade vs. Powerade

Can PepsiCo's (PEP) Gatorade rebound?

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.

Coca-Cola having issues with Wal-Mart requests

In another purported Wal-Mart heavy-handed tactic, it appears to have asked the Coca-Cola company to alter its century-old beverage distribution model and deliver its products direct to Wal-Mart's warehouses. This would allow Wal-Mart increased scale and efficiency since it could replenish Coke products within its own supply chain instead of having Coke bottling partners visit stores daily to re-stock Wal-Mart stores nationwide.

The suspected threat? That Wal-Mart would launch a competing sports drink product to sit alongside Coke's Powerade product in all Wal-Mart stores -- and that would dent Coke's profit a tad. While this is a rumor at this point, it seems plausible -- Wal-Mart has so many private-label products (Sam's Choice products, for example) already. Many of those third-party manufacturers would jump at the chance to make a sports drink product for Wal-Mart stores.

Continue reading Coca-Cola having issues with Wal-Mart requests

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Last updated: November 24, 2009: 11:02 AM

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