Gatorade Turns 50 in 2015

Gatorade celebrate's its 50th birthday with a commercial highlighting its most memorable sports moment.
Gatorade celebrate’s its 50th birthday with a commercial highlighting its most memorable sports moment.

It’s been 50 years since Gatorade was created by a team of University of Florida scientists to help the Gators football team stay hydrated.  Since then, the sports drink giant has created a beverage category that helps athletes replenish  lost electrolytes.  The brand kicked off its half-century birthday celebrations with a commercial titled “50” that highlights memorable moments in its history.  While I’m not familiar with most of the memorable moments, the folks over at Slate have captured these 50 Gatorade memorable moments (link here).  The commercial highlights some athletes multiple times, as it would appear that some athletes have been critical to Gatorade’s place in history.  Will the brand embrace more retro ads this year?  It seems they have already done so.  Check out the Gatorade “50” commercial below:

After releasing this ad to close off 2014, Gatorade also went retro with another one of their more recent advertisements.  They have gone back to one of the brand’s most popular athletes to help commemorate their birthday.  Near mid-February, Gatorade released a remastered version of their “Be Like Mike” Micheal Jordan commercial.  Jordan was one of the company’s first athlete spokespersons, and serves as a symbol of their longstanding partnership with the NBA. See the new (old) commercial below:

This isn’t the first time that Gatorade has gone back to Micheal Jordan or retro advertisements to tout the brand’s place in sports.  Consumers certainly still connect with Micheal Jordan as one of basketball’s greatest athletes, and the athlete himself can be seen with Gatorade products frequently through his successful NBA career.  Putting a second focus on something that has worked well in the past is also nothing new in the advertising world.  Brands go back to defining moments to stir up nostalgia in hopes of recreating the magic.

This would make sense for Gatorade since the hydration segment has become fragmented in the years since its inception.  Next to Powerade are energy drinks, coconut water, flavored water, and a host of other alternatives.  Consumers have more beverage choices now when it comes to hydration and recovery.  Gatorade’s competition is stronger than ever, and it would serve the brand well to remind consumers of why it mattered to them in the first place.  And to help remind them, Gatorade is also bringing back Citrus Cooler, one of its discontinued but more popular drink flavors. Further cementing the retro theme, Citrus Cooler will return in old Gatorade bottles and labels.

Gatorade has accumulated a rich history over the past 50 years and has developed a dominant market position relative to its main competitor.  Bringing back a sports icon to commemorate a birthday is one thing and a great first step.  For their next act, Gatorade must search out new moments to relate to today’s athletes and consumers.

Gatorade's Citrus Cooler returns to the market in March 2015.
Gatorade’s Citrus Cooler returns to the market in March 2015.
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Is Mountain Dew Kickstart Taking on Gatorade?

Mountain Dew Kickstart's line-up: Fruit Punch, Orange Citrus, Pineapple Orange Mango, Strawberry Kiwi, Black Cherry, and Limade.  Image courtesy of stupiddope.com.
Mountain Dew Kickstart’s line-up: Fruit Punch, Orange Citrus, Pineapple Orange Mango, Strawberry Kiwi, Black Cherry, and Limade. Image courtesy of stupiddope.com.

Following on one of their most successful drink launches in recent memory, Mountain Dew has added two additional offerings under their Kickstart drink portfolio.  The Kickstart offshoot started to segment drinks by dayparts in 2013 and brought out two beverages targeting morning consumption.  In 2014 they followed on the morning drinks with two more flavors catered toward evening occasions.  Their most recent offerings – Pineapple Orange Mango and Strawberry Kiwi – are infused with coconut water (full press release found here), but does not overtly fit an actual drinking occasion.  This makes the latest launch appear off strategy because it’s not geared specifically toward the morning, afternoon, or evening.  How do these two drinks fit into the Kickstart portfolio?  What is the purpose of this launch?

The “fit” debate may very well go back to the purpose of coconut water.  Coconut water was targeted as a healthier alternative to sports drinks like Gatorade and Powerade.  On an equivalized volume comparison, coconut water contains similar amounts of electrolytes but fewer calories and sodium, making it a strong substitute for the sports drinks marketed toward fitness-oriented consumers.  In essence standalone coconut water is meant for hydration and recovery purposes.  When mixed with Mountain Dew’s caffeinated citrus sodas, these drinks could be positioned as competition to sports drinks.  A lightly carbonated energy drinks – with juice flavors and coconut water – can be termed as a hydration drink to compete with the Gatorades and Powerades out there.  These latest release of Mountain Dew Kickstart would not need to fit under a daypart segmentation.  It could be a morning drink for people that exercise in the morning, or it could also serve an evening recovery drink after workout or recreational sports.

Mountain Dew's Kickstart newly launched flavors: Pineapple Orange Mango and Strawberry Kiwi.  Both variants are infused with coconut water.  Image courtesy of PRNewswire.com.
Mountain Dew’s Kickstart newly launched flavors: Pineapple Orange Mango and Strawberry Kiwi. Both variants are infused with coconut water. Image courtesy of PRNewswire.com.

If this is Mountain Dew Kickstart’s positioning around the new offerings, the only challenge would be where caffeine fits into the equation.  Sports drinks are supposed to replenish what the body loses during sport events (electrolytes, sugars, salts, liquids) and caffeine would not fall under this criteria.  While the body may craves some energy following an intense workout, it could be debated that the workout itself provides energy as a result of the activities.  Caffeinated sports drinks may not be detrimental like alcoholic energy drinks but it’s relevance is questionable due to the caffeine.  This may ultimately be an attempt to expand the Mountain Dew masterbrand beyond soda and energy drinks by reaching toward athletic consumers.

Or is it?

This brings us to the purpose of launching these two flavors of Mountain Dew Kickstart.  Bevnet’s Neil Martinez-Belkin suggested this launch had more to do with creating success for O.N.E coconut water brand than extending Mountain Dew’s reach (article link here).  Martinez-Belkin reminds us that months ago PepsiCo expressed intentions to include coconut water as an ingredient across multiple lines of business.  Driving Kickstart infused with coconut water is simply a method of increasing coconut water;s public exposure.  It may be because after buying O.N.E. coconut water that the beverage brand is still lacking robust market exposure.  This make senses given both Coca-Cola and Pepsi – owners of ZICO and O.N.E – have re-deployed efforts to focus on their core business: carbonated soda.  Marrying a powerhouse brand like Mountain Dew with coconut water increases coconut water’s consumer relevance without having to fully invest behind coconut water as a beverage brand.  This is not to say that Pepsi may not be supporting O.N.E. coconut water in the future, it just means they are looking for creative options to build up the coconut water segment.

The Mountain Dew Kickstart launch raises a few eyebrows though it helps coconut water more than it appears in the public eye.  For a global beverage manufacturer where many products fighting to keep their budgets, this is a creative way to grow a business that may be losing the fight to maintain funding against other beverages in Pepsi’s portfolio.  O.N.E. coconut water would justify increased budgets if these two new Kickstart flavors sold well.  And if this experiment is a hit between Mountain Dew and coconut water, we could see Tropicana infused with coconut water or even Pepsi cola infused with coconut water in a few years.  If that does happen, you can point to the success of Mountain Dew, which has been one of Pepsi’s increasingly consumed soda brands despite the overall declines in soda.

 

The O.N.E. coconut water line-up for Canada. Is the U.S. looking to grow this brand by marrying up coconut water with more lines of product?
The O.N.E. coconut water line-up for Canada. Is the U.S. looking to grow this brand by marrying up coconut water with more lines of product?

Vegetable Beverages Hitting Mainstream

Gatorade Lime CucumberWould you drink a cucumber lime-flavored Gatorade?  How about blueberry mint-flavored water?  An article on Beverage Industry on emerging beverage trends claim that vegetable-flavored beverages are increasingly popular because of their “healthy halo” (article link here).  With everyone focusing on healthier options, it makes sense that vegetable flavors reach mainstream status and consumers seek to take in more vegetables.  After all, berry and other fruit-flavored beverages can only deliver so much momentum.  That said, the article describes that consuming a vegetable-only flavor is still in uncommon and many beverage options are a combination of both vegetables and fruits.  How will this particular flavor trend impact beverage makers?  Will these drinks ever reach a level of popularity to take down mainstream colas, juices, or waters?

Beverage manufacturers constantly monitor flavor trends and Pepsi has locked into this trend since 2011, when they launched a Cucumber Lime flavor under the Gatorade franchise.  Pepsi Japan’s limited-time releases of Pepsi Shiso and Pepsi Ice Cucumber also proves this point.  Since most (if not all) beverage organizations monitor consumption trends, it would not be surprising to see manufacturers build momentum and launch more vegetable-infused variants over the next few years.  It just needs to make its way into the North American market.  And this is beginning to catch on more in the U.S.; research firm Mintel tracked over 100 U.S. beverage innovations with vegetable or vegetable-fruit flavors launching in the past year, representing a 20% increase from 2013.  It still stands to be seen whether these vegetable-flavors will launch under the most popular and mainstream beverage lines like Gatorade, Coke, and Pepsi or launch under emerging beverage brands.  No matter the case, any approved product launch puts sales pressure on other items to perform or risk losing the shelf space.  This flavor trend may not have been successful replacing other products’ sales to justify shelf space though it looks that will soon change.

On the topic of reaching critical mass to take down mainstream product categories, it doesn’t look promising.  This isn’t to say that vegetable-flavored beverages will not reach mainstream status themselves, just that it will not overtake other mainstream categories.  For one, this is a flavor trend that integrates the product under a specific beverage segment; it is not a standalone beverage category in itself.  Consider these vegetable-flavored products to pattern after  Campbell’s V8 juices or Bolthouse Farm smoothies, where they represent a growing portion of a drink category (juices and smoothies, respectively) but are not large enough to overtake juices as a whole or smoothies as a whole.  Regardless, these healthier options will compete aggressively for retail shelf space alongside other beverage options.

Image courtesy of foodbusinessnews.net
Image courtesy of foodbusinessnews.net

The Beverage Industry article also describes other beverage flavor trends, include a growing preference toward sweet and spicy combinations.  Consumers increasingly look for flavors that will satisfy multi-sensory experiences.  Some examples include chocolate gojuchang tea (gochujang is a Korean spicy sauce),  spicy ginger mango juice, and mango jalapeno water.  So be on the lookout, soon enough you’ll see more cross-flavored beverages on store shelves.  Be in sweet and spicy or vegetable-fruit flavored, it will sound exotic but your taste buds and your body will thank you for choosing that over another drink.

Red Bull Celebrates Summer With New Flavor

The new Red Bull Summer Edition is available exclusively at 7-Eleven locations across Canada and the U.S.
The new Red Bull Summer Edition is available exclusively at 7-Eleven locations across Canada and the U.S.

Building on their momentum of the Red Bull Editions, the energy drink manufacturer will launch a new flavor exclusive to 7-Eleven locations in Canada and the U.S.  Aptly named the “Summer Edition”, the drink’s packaging is a sunny-yellow colored 12oz (355ml) can.  The tropical fruit-flavored drink adds to the Red Bull Editions line-up of the Red (cranberry), Blue (blueberry), and Silver (lime) flavor offerings.  7-Eleven has exclusivity of the Summer Edition in July and August, with a consumer promotion running until September 2nd (per the corporate 7-Eleven news release).  After that, no guarantees whether this becomes available across other retailers or it is truly an exclusive, limited-time offering.  If history proves to be repeated, then the Summer Edition will be here to stay.  Red Bull had previously launched their Red Bull Editions exclusive to 7-Eleven in March, followed by availability at other retailers a few months later.

It’s not the first time beverage companies have partnered with 7-Eleven for exclusive offerings.  Most recently, Gatorade had launched their Gatorade Fierce Green Apple flavor exclusively with the convenience retailer.  The results of that launch is detailed in this Pepsico news release.  The proven success of exclusive launches help 7-Eleven secure more preferred agreements with other beverage manufacturers.  After all, the convenience retail channel generates healthy sales and even healthier profit margins.  And with 7-Eleven adding more retail locations across North America, they certainly have the clout to command more customized products.  For Red Bull, this arrangement is preferable since it helps the energy drink manufacturer lock up more valuable shelf space in the nation’s leading convenience retail chain.  In addition, this also allows them to focus their advertising support behind one product at one retailer, helping to drive a stronger, more focused message.

Red Bull has previously launched the Red Bull Editions exclusive to 7-Eleven before opening it up to all retailers.  Courtesy of flippies.com
Red Bull has previously launched the Red Bull Editions exclusive to 7-Eleven before opening it up to all retailers. Courtesy of flippies.com

In BevNet.com’s article on the Red Bull launch, the publication detailed that Red Bull is slower to launch new products relative Monster Energy, leading to slower sales growth (link here).  The comment is not without merit, as it appears that Red Bull’s sales are more reliant on existing drinks rather than new innovations – especially with a innovation history that includes unsuccessful attempts to diversify with  Red Bull Cola and Red Bull Energy Shots.  However, their recent product launches came from an area where they are the clear leaders and have been quite successful.  And with fewer launches, Red Bull is able to put more attention into each launch, and ensure that it receives full support across media outlets as well as.  Case in point: their launch efforts behind Red Bull Total Zero and the Red Bull Editions have been well executed with media and in-store support.  Even their BULL Energy Drink has garnered strong attention despite catering the beverage to a highly specific market.

The lower frequency also helps Red Bull convey a stronger brand presence that coincides with their premium pricing.  Fewer launches highlight a prestige that will be harder to sustain if launches become fast and frequent.  So with the Summer Edition now available in 7-Eleven, let’s see how Red Bull celebrates with their Summer Edition.  It won’t be forever until they have another product launch, but it will surely be after they make sure the Summer Edition is successfully entrenched with  the customers and consumers.

Pepsi Brings Propel Back to Gatorade

Propel - from the makers of Gatorade
Propel – from the makers of Gatorade

After a couple years differentiating itself focusing on the lifestyle space, Pepsi is re-launching Propel water under the Gatorade hydration portfolio.  From AdAge, Natalie Zmuda shares that the enhanced water brand will update its product packaging, remove the “zero” from its product name, and position itself as a hydration beverage for regular exercisers (article link here).  Unlike Gatorade, which is targeting the serious athletes and is a sports drink, Propel helps fulfill an athlete’s need with water – not an isotonic.  Still, the question remains how effective can Propel compete within the crowded enhanced waters space?  And given all the changes to the Propel franchise, how will consumers perceive Propel after another restage?

With popular brands like glaceau vitaminwater, glaceau smartwater, and SoBe Lifewater in leading market positions, Propel still manages to control a 13% market share.  It has remained competitive as a result of the brand’s equity and the consumer’s affinity with the hydration beverage.  The franchise will look to strengthen its market position by catering toward “routine exercisers” and piggy-backing on the Gatorade name.  Their updated packaging will feature the line “from the makers of Gatorade” to drive awareness and availability.  This point is critical to Propel’s growth, as owning a part of the consumer’s mind becomes increasingly important with the enhanced waters market expanding to include with more brands in recent years.  Even Pepsi themselves has plans on introducing a premium water brand – Qua – within the year. (article link here).  The competition within this segment is fierce, and owning a particular segment – the casual athletic segment – helps Propel stake its claim in enhanced waters.  With Gatorade also catering to the athletic segment, it would not be surprising to see more promotional efforts where Propel and Gatorade products complement one another.

Propel Water. In 2009 (L) and in 2014 (R).
Propel Water. In 2009 (L) and in 2014 (R).

The issue surrounding product perception could have been a tougher obstacle to overcome.  Propel was originally introduced under the Gatorade before moving away from the athletic consumer in 2011.  As consumers and their drinking habits evolved, the Propel brand followed the moving target to become more of a lifestyle water brand.  Instead of continuing to target males/females 25 and above, their core target demographic moved up to Boomers and Generation X.  Measured media spend to celebrate the new positioning was over $10 million.  Three years following this direction, Propel is changing their focus and advertising message.  Again.  If not for leveraging the Gatorade brand name, Propel may have a tougher time connecting to younger consumer segments after structuring the communication toward a difference audience.  With the sports drink’s backing, Propel has a stronger platform to broadcast their marketing message toward athletes and exercisers.

Regardless of the marketing message and target demographic, the product fits into the changing needs of consumers.  Propel is well-received as evidenced by their market position.  With the support of Gatorade, Propel’s path on the road to success becomes much less challenging.

Propel The Workout Water
Propel The Workout Water

Coca-Cola Expands “Official” Olympic Drink Portfolio

Courtesy of eprize.com

It’s another year for the Olympic games, this time in Sochi.  For Coca-Cola, every Olympic year is a boon based on the event partnership agreement where they hold the distinction of official Olympic non-alcoholic beverage partner.  As one of the Olympics’ global partners, the beverage giant pays about $100M to monopolize non-alcoholic beverage serving rights in all Olympic venues (other global partners hold exclusivity in their respective industries).  In recent years, the definition of “non-alcoholic beverage” has expanded to include more than just carbonated soft drinks.  Coca-Cola has gained exclusivity to serve sports drinks (Powerade), juices (Minute Maid), and waters (Dasani, vitaminwater) over the past few Olympics games.  The “Olympic Wolrdwide Partner” logo has also started appearing on Coca-Cola’s ZICO coconut water brand lately.  So given the substantial cost, how beneficial is it for Coca-Cola to be a worldwide Olympic partner?  And with the expanded definition of “non-alcoholic beverage”, which product categories are next to gain Official Olympic product status?

Despite a cost of $100M each active Olympic year, Coca-Cola has renewed their Olympic partnership until 2020.  It would appear that this agreement delivers substantive returns.  For one, Coca-Cola has blocked out their global competitor in all product categories that the conglomerate participates in.  No Pepsi-branded soft drinks, Aquafina, Gatorade, or Tropicana can be served within all Olympic-event venues.  Brand visibility is another partnership benefit.  Every game or after-party event that becomes broadcasted will feature a Coca-Cola logo or Coca-Cola beverage product.  Live viewers and spectators may only celebrate with Coca-Cola branded products and nothing else.  Positive associations is another partnership benefit.  Spectators seeing their athletes win also see them hydrating themselves with Coca-Cola products.  These same spectators will associate hard work, performance, and winning all being supported by Coca-Cola.  From a qualitative perspective, these are invaluable benefits that Coca-Cola has been able to enjoy – reduced competition, brand visibility, and positive associations.

Courtesy of designyoutrust.com

With changing taste preferences among spectators and athletes alike, incorporating other product categories as “Official Drinks” certainly makes sense.  Some people will choose carbonated soft drinks, some will want flavored water, and still some people prefer juices.  With coconut water emerging as a beverage category, expansion to include this as an Olympic-approved beverage makes sense.  However, increased exposure of Olympic branding potentially cheapens the Olympic brand with broader availability on all products – not just beverages.  Furthermore, not all products will be suitable to display the Olympic logo on its packaging.  For example, energy drinks may be one category that could be denied Official Olympic product status given possible negative associations despite the category growth.  Within Coca-Cola beverage portfolio, it’s likely that liquid enhancers (Dasani Drops, Powerade Drops) and teas (Honest Tea, Fuze) could gain approval should they apply for it.  Both these categories are enjoying growth and have fewer negative associations portrayed by the media.

Coca-Cola has been one of many key sponsors that has supported the Olympic games through the years, and it appears that both parties are satisfied with the results.  2020 is still three more Olympic games away, but given the goodwill both parties have been generated, it’s very possible that this relationship goes well beyond 2020.

MiO Sport: Fit For Any Occasion

Courtesy of funnycommercialsworld.com
The office worker is now a basketball celebrity.  Courtesy of funnycommercialsworld.com

MiO Sport is Kraft’s latest innovation in their liquid enhancers Canadian product line (MiO Fit is what is introduced in the U.S).  While the product has been available since their February 2013 Super Bowl ad, they had not implemented any video promotions in Canada.  Until now.  Re-positioning the product as “MiO Sport”, they have released two commercials to talk about MiO Sport in the Canadian marketplace.

Here’s the MiO Sport commercial “Swish” from early May 2013:

It doesn’t take long for the viewer to guess what is being advertised in these commercials.  Notice that neither of these commercials mentioned anything about it “changing everything?”  It is because they have already educated the consumer on what MiO is and how to use it; the video itself implies that MiO Sport changes everything.  The next step is to show different situations to use MiO Sport.

With regard to the Swish commercial, the commercial follows the same structure as their previous MiO ad spot.  The original video was based in an office setting and featured the same office guy.  Every time the scene cuts from one person talking to another person, something changes.  This commercial’s ultimate message is very similar to the original MiO video: squirting MiO Sport into your water changes everything.  And then you see all the crazy situations of how this regular office worker (definitely not athletic) transforms into an outrageously successful basketball player.  It’s so over-the-top that its believable.  MiO Sport is not advertising that squirting MiO turns you into a successful athlete, rather it is making fun of it.  And that keeps with the brand’s personality.

And here’s their latest commercial “Eye of the Squirter” from July 2013:

Their second commercial “Eye of the Squirter” is different from their previous commercials.  While the main character is still the same person in the previous two ad spots, they are no longer set in the same environment that changes multiple times.  This time it is sporting activities in various environments, such as the track, the swimming pool, and the hockey locker room.   Notice that these sports also have a stronger Canadian tone to them?  While MiO itself wasn’t introduced outright from the beginning, it becomes obvious what is being advertised given the visual cues.  The advertisement’s goal is to show you that MiO Sport is a fitting hydration choice for any activities – even if it is power walking on the track.

Do either of these commercials spur you to hydrate yourself with MiO Sport?  After all, it does appear that MiO Sport is targeting a different consumer segment.  While Powerade and Gatorade are after the serious athlete, MiO Sport is only targeting the casual athlete and the average-fit consumer.  There are more people that match this consumer group than that of the serious athlete.  My guess is that the MiO Sport does have a strong appeal in the Canadian marketplace, and we should see sales taking off soon enough – if it hasn’t already.

It’s also an interesting note that these commercials are not strictly made for TV, rather it is made for YouTube and a version of it is released for TV (a topic I will highlight in a separate post).  If you don’t believe me, feel free to click into all the separate “hidden” commercials that they talk about.

Gatorade One More – Conscious Fitness

Gatorade recently kicked off new commercials to showcase a slight modification of their positioning.  Has anyone seen the Gatorade “One More” commercials?  The first one was to introduce Gatorade Frost, while the second one built on the foundation of what the words “One More” means.  While older commercials portrayed Gatorade as a valued aspect of a continuously winning athlete’s training regime (the Lightning Bolt commercial below), the “One More” series focuses more on delivering a message that personal training and perseverance is what leads to success.  Given that the sports drink’s tagline is “Win from Within”, which one of these two commercial series fit better with Gatorade’s message and communication?

Both commercials play a role in Gatorade’s “Win from Within” top-level messaging.  However, the order itself seems reversed, or even disjointed.  What may work better would be the One More series was launched first, or have the commercial extended to incorporate scenes from the “Lightning Bolt”.  As a summary, the “Lightning Bolt” commercial displays the development and purpose behind the beverage and culminates with the athlete’s penultimate.  The focus on this appears to be on how drinking Gatorade can ultimately lead to athletic success.  But how realistic is it for Gatorade alone to get you there?  Drinking Gatorade will not make you perform any better – unless you are disciplined with your training.  Which is the final scene about an athlete training in the bleachers.

Enter the “One More” series of Gatorade commercials.  These recent commercials illustrate a more realistic interpretation of the how Gatorade – or any hydrating beverage for that matter – can lead to athletic success.  The focus is on the training and pushing yourself to the limit.  And when you reach your limit, you do “One More”.  Similar to Al Pacino’s “Game of Inches” speech in the film Any Given Sunday, the commercial inspires to leave an image of rewards translated from your collective efforts.  That said, the final scenes in the commercial didn’t really showcase success in its most typical form like championships, champagne showers, and celebrations.

Ultimately, it may be best served to combine the two commercials into a single commercial spot.

How about leading off with the concept of Gatorade, followed by cuts to modern day training with the athlete pushing themselves to the limit, and ending with a championship celebration?

Of course, the development of the “One More” series of commercials may not have happened until Gatorade got a read on their “Lightning Bolt” commercial.  The development of “One More” may have been a response to what consumers and viewers thought of the previous series.  What are your thoughts: does the One More commercial inspires you to train harder?  And do you think that drinking Gatorade during your training regimen will lead you to glory one day?

Liquid Enhancer Segment Legitimized With Powerade Launch

Sourced from www.coca-colacompany.com
Sourced from http://www.coca-colacompany.com

Funny how just a few years ago, no one has ever heard of liquid flavor enhancers but now many people have heard about and possibly tried MiO.  This is due in no small part to Kraft, which created the product segment and put a lot of marketing support behind their MiO to introduce and educate consumers on how to use this product.  And as Dasani introduced their own liquid enhancer to capitalize on the market trend, Kraft innovated to stay ahead of its competition.  These innovations include employing a dual brand strategy by launching Crystal Light Liquid, as well as extending MiO’s platform by branching out to energy and sports drinks.  With recent news about Powerade coming out with a liquid enhancer, this segment appears to provide legitimate profitable returns for manufacturers.  However, is the segment itself big enough for so many different branded offerings?  Will this spur Pepsi to participate in some shape or form?  Possibly with a Gatorade drop to maintain their market share in sports drinks?

Courtesy of www.makeitmio.com
Courtesy of http://www.makeitmio.com

Liquid enhancers have enormous growth potential and despite its infancy, have extended across sports drinks and energy drinks.  This has certainly broadened its consumer appeal and increased the segment’s awareness and adoption rates.  However, the segment still appears to be crowded with four branded players: MiO, Crystal Light, Dasani, and now Powerade.  And it only looks that way because the segment itself is still small.  For all the excitement around MiO, it is still only a $200-$300 million brand.  Combined with Crystal Light, Dasani, Powerade, and even private-label offerings, the segment itself is not predicted to be over $500 million.  But with more advertising support behind each of these beverage properties as well as higher levels of consumer adoption, the segment will grow to be large enough to house these four liquid enhancer brands.  MiO will certainly be rewarded for being the first mover.  Consider this the initial stage of energy shots, when 5-Hr Energy was the only one in the segment and it took some time to gain sales.  As more companies introduced their own energy shots, the segment gained popularity and market size.  Through all this, 5-Hr Energy became the de facto leader in energy shots and rebuffed Red Bull, Rockstar, and Monster.  5-Hr Energy capitalized on the news that other energy drink manufacturers brought to the segment and benefitted from being the most recognized name among the consideration set.  So while it currently appears that liquid enhancers is congested, the potential size of the segment mirrors energy shots, and may even outpace it given less consumer backlash.

With great potential, comes great competition.  We’ve seen Coca-Cola wait for Kraft to prove that this is a viable segment, and then furiously pursue them with their own offerings.  Why has Pepsi not done anything yet?  A Gatorade Drop would certainly gain lots of attention among athletes, not to mention give them another extension to complement their Gatorade Chew.  Pepsi could also come out with a tea offering to start off in a segment where there are no current liquid enhancers (though there are rumors that AriZona is coming out with one soon.)  Given that liquid enhancers can be sold warm and are so compact, they can be stocked on shelves and also at the cash register as consumers complete their purchases.  Pepsi would be missing out on a large opportunity if their only presence were in coolers or displays – far away from the point of purchase.  My guess is that they are likely in the works to launch their own enhancer soon, but only time will tell.

Liquid enhancers are here to stay and has proven to be rich opportunity for the participants.  As the segment gets bigger, it will spell of a missed opportunity for Pepsi if they remain on the sidelines.

Gatorade Lightning Bolt: Part of Every Athlete’s Success

I’m hoping by now that almost all consumers have seen this ad by Gatorade titled “Lightning Bolt”.  The ad starts off by depicting tired athletes during a football game and the school’s science professors oncocting a beverage that will refresh and energize the players.  The rest of the commercial showcases athletes training, performing, and celebrating key moments with quick clips of Gatorade logos and cups.  The ending is what we are all accustomed to with the “With From Within” tagline.  Does this advertisement’s message come through clearly?  Does it inspire action from the viewers, leading to incremental sales for Gatorade?

The former about message communication is simple and clear.  Gatorade is training and celebrating with you, as you reach for the height of your sport.   The hydration beverage shows successful athletes during different cycles of their sports life to communicate the fact that winning doesn’t just happen over night.  This requires regimented training and preparation first.  Even as an athlete competes and finally reaches the pinnacle of their respective sports, Gatorade is a partner with them at these different touchpoints.  So the message remains pretty clear that if you want to win, you need Gatorade to help you train.  And when you reach the end goal, Gatorade is there to celebrate with you.

The Gatorade beverage in its original state, glass bottle with “Gatorade” written on tape. Image sourced from fastocreate.com

The latter question is a little more challenging to answer.  Whether sales are truly incremental (or wholly generated) as a result of the commercial are very difficult to track.  However, consider the timing of when this commercial was introduced: during NCAA March Madness when Powerade released their own ad (read my analysis on that commercial here).  The point of Gatorade’s advertisement may not actually have been to stimulate sales, rather it was to protect their sales.  Since Powerade always plays up its underdog status, and there were many people watching March Madness, Gatorade needed to react and maintain their presence.  So the key measure of whether the “Lightning Bolt” media spot actually reached measured success may actually been seeing that sales levels held constant to prior year or prior months, rather that a decline in sales due to Powerade’s activity.

Large corporations – or business units in this case – typically conduct a high level of tracking to monitor competitive activity.  That’s just good business sense in order to preserve your own level of success.  Gatorade’s message is clear and a continuation of what they have advertised in the past few years.  Gatorade will help you prepare and later celebrate the victory.  It certainly will be interesting to answer the question of whether sales activity shifted in any direction as a result of this ad, but only those within the two beverage units will truly know the answer to that.