Beverage Industry

Tournament of Champions

June 1, 2007

Tournament of Champions

By JENNIFER ZEGLER

Rookies challenge MVPs of sports drinks

Functional beverages are all the rage, which is increasing the competition for sports drinks. Energy drinks, functional waters and powdered beverage mixes all promise similar benefits, including vigor, hydration and endurance, which were previously a signature of sports drinks. The popularity of functional beverages in all categories are crowding in on the inherently competitive sports drink field.  
As powerhouse brands, including Gatorade and Powerade, continue to dominate, the category also faces competition from within. PepsiCo’s Gatorade continues to lead, holding eight spots in the Top 10 brands, according to data from Information Resources Inc. (IRI), Chicago. Even its own rookie, Gatorade A.M., debuted in the Top 10 best sellers in the $1.6 billion sports drink category. Yet, new brands — with a competitive edge — are adding to the category. The new formulations appeal to industry trends, such as natural and organic.
Sports illustr-aded
The suffix “-ade” means both “action” and “product, especially a sweet drink,” according to Webster’s Dictionary. Influenced by both definitions, “-ade” has taken over the sports drink category as a powerful end to a name brand. Where Gatorade started, Coca-Cola’s Powerade and Accelerade from Cadbury Schweppes have used the suffix to define the category.
Gatorade continues its influence. The various formulas and flavors of the iconic brand make it a constant in the category it created in 1965. The PepsiCo brand now has nine incarnations, which generally are brand names for different flavor profiles all boasting Gatorade’s proprietary formula. Though the majority of its 22 flavor options are bold fruity flavors, the brand’s largest gainer was Gatorade Rain, which is formulated for a lighter flavor that finishes clean, according to the company. Introduced in 2006, Rain experienced a 376 percent increase, according to IRI data, and introduced a new Strawberry-Kiwi flavor early this year.
Top sports drinks by brand
Brand Dollar sales% change vs. prior year Market share % change vs. prior year
Bottled, non-aseptic
gatorade$678,388,000-0.1%44.3-4.2%
powerade$202,712,9008.9%13.2-0.1%
gatorade frost$141,009,5003.0%9.2-0.6%
gatorade rain$131,158,000376.1%8.66.6%
gatorade all stars$114,140,10020.8%7.50.7%
gatorade x factor$90,229,730-7.6%5.9-1.1%
gatorade fierce$82,736,050-19.1%5.41.9%
powerade option$16,173,66070.0%1.10.4%
gatorade xtremo$15,310,560-29.3%1.0-0.5%
gatorade a.m.$14,908,250na1.01.0%
total category$1,532,962,0009.3%100.0
Powdered drink mixes
gatorade$21,983,060-7.8%62.512.5%
propel$6,435,521na18.318.3%
gatorade frost$3,433,134-25.7%9.84.8%
powerade$1,693,918-10.5%4.8-1.1%
gatorade fierce$492,818-37.9%1.4-1.1%
capri sun sport$360,354na1.01.0%
private label$310,75325.6%0.90.1%
super c energy$175,735-1.5%0.5-0.1%
gatorade all stars$157,584-27.1%0.5-0.2%
sport sensations$80,477488,225.4%0.20.2%
total category$35,188,48010.7%100.0
Aseptic
capri sun sport$18,366,700-28.8%68.7-3.2%
gatorade$3,999,809-16.5%15.01.6%
gatorade frost$3,576,383-16.3%13.41.5%
gatorade fierce$737,910-28.5%2.8-0.1%
harvest bay$44,935na0.20.2%
total category$26,739,980-25.5%100.0
total sports drink category$1,594,890,0008.4%
Source: Information Resources Inc., Chicago. Total food, drug and mass merchandise channels, excluding Wal-Mart, for the 52 weeks ending April 22, 2007.
Specially formulated for morning exercisers, Gatorade A.M. was launched in December. The morning sports drink was formulated to replenish fluids and energy lost during sleep, according to company materials. It also was formulated in breakfast-inspired flavors — Tropical Mango, Orange Strawberry and Cran-Raspberry. Though it only launched in December, the formulation had nearly $15 million in sales, breaking IRI’s Top 10 sports drink brands for the year ending April 22, 2007.
Another new addition from the company that posted impressive sales was Propel’s Powder Packets. Taking from its bottled fitness water line, Propel Powder Packets were the No. 2 sports drink mixes in sales, IRI reports. Akin to beverage mix stick packs, Propel powder packets are ready to be added to a bottle of water. The product debuted in a Lemon flavor in September and has since added Kiwi-Strawberry and Berry flavors.
Despite an overall Gatorade dominance in the category, two Powerade formulations were able to break into the ranks. Both Powerade and Powerade Option registered on IRI’s Top 10 as the No. 2 and No. 8 sellers, respectively. As part of Coca-Cola’s “Grape Collection,” low-calorie Propel Option received a Grape flavor last summer.
Cadbury Schweppes got into sports drinks last year with its acquisition of Accelerade from PacificHealth Laboratories. The company announced plans to re-launch Accelerade nationwide in April. The brand is popular among the fitness set, the company says, and Cadbury Schweppes hopes it will appeal to regular exercisers. In contrast to other brands that replenish electrolytes, Accelerade uses a protein-based formula, which the company says will be the focus of its $50-million marketing campaign. Due to its formulation, 20-ounce bottles of Accelerade will sell for $2.79. The price tag is 20 cents less than the suggested retail price for a 64-ounce bottle of Gatorade.
Draft picks
Consumers continue to rank natural beverages and foods as important to them, and actively minded consumers are no exception. Thus, companies have created sports drink options for what one company coins “the natural athlete.” According to Jasen Cusick, brand manager for R.W. Knudsen Family, Orrville, Ohio, Recharge was formulated for the natural athlete. Cusick describes the natural athlete as “someone looking for a sports drink that offers hydration and electrolyte replenishment in a clean form — no artificial flavors, preservatives or added sugar.”
Unlike other sports drinks, Recharge is made with 50 percent juice, water and sea salt for the source of electrolytes. In addition to its Lemon, Grape, Tropical and Orange flavors, the Recharge lineup also features an Organic Lemon variety.
“The main objective in providing an organic version of Recharge is to offer consumers a choice,” Cusick says. “But there also are consumers that are looking for organic products, whether it’s for the taste, the benefit to our environment or for their health. Our goal is to offer options for our consumers, since tastes, preferences, and priorities are different for everyone.”
This spring Recharge’s packaging and label design received a facelift. The natural sports drink, which launched in 1985, is now available in 16-ounce recyclable plastic bottles in both natural food stores and grocery retailers. In the next year, Cusick says R.W. Knudsen will be implementing a multimedia marketing campaign. In addition, the brand is looking into expansion of new flavors, sizes and options, including additional organic flavors.
LIV Natural is an additional sports drink that is leveraging the natural appeal. Nancy Dince, chief operating officer of the Princeton, N.J.-based Ritorna Natural says plenty of sports drinks are on the market, but many use high-fructose corn syrup as a sweetener.
The company formed in 2005 and LIV Natural was created after 15 months of formulation, taste tests and athlete tests. The brand launched in the summer of 2006 in the initial Lemon and Berry flavors. The lineup is made without preservatives, artificial colors and flavors. It does include rice syrup as its source of carbohydrates and agave nectar for a sweetener.
“Rice syrup is a way to deliver carbohydrates that are gut-friendly,” Dince says. “Some people claim that after drinking nutritional sports drinks, they experience cramps; rice is a healthy, neutral, gut-friendly carb source.
“In terms of agave, it is something that is very unprocessed and the fact that agave nectar has low-glycemic index rating is a benefit to most athletes,” she continues. “Unless you’re a very high performance athlete, what you need is slow delivery of nutrients and energy to body.”
This spring, the company launched LIV Orange flavor.
“We’ve have had great success introducing the third flavor,” Dince says. “It’s really popular across all demographics. Within the next month, we’ll be launching a new flavor called Citrus Passion.”
Dince says expansion plans also are in the works for the company. LIV Natural’s three flavors are currently available in 12- and 20-ounce sizes in Manhattan, New Jersey and Pennsylvania as well as in Denver. She says the company is in test phases for new flavors and hopes to expand to as many as six SKUs “to hit everyone’s palate.”
In addition to natural ingredients, the market has welcomed new drinks leveraging the natural benefits of well-known fruits, vegetables and dairy products. Last fall, CherryPharm, Geneva, N.Y., launched a line of CherryPharm sports drinks that claim to use the natural benefits of cherries to help recover from muscle damage and pain experienced after strenuous exercise. Expanding its unique sports drink lineup, Golden Beverages Inc., Mesquite, Texas, added a Dill pickle variety to its Pickle Juices. The Dill variety has added vitamin C and E, zinc and potassium, which are all designed to help boost electrolytes.
Athletically minded consumers have had CytoSport’s Muscle Milk and other products that harness the benefits of dairy, but a new product is set to debut this summer with a fresh take on dairy. Bravo Brands plans to roll out Slammers Sport Milk. According to the North Palm Beach, Fla., company, Sport Milk is developed in response to a growing body of scientific and empirical evidence that suggests milk can play an important role in post-exercise recovery and rehydration.
In addition to the traditional benefits of sports drinks, Bravo claims that Slammers Sport Milk will allow cells to rebuild by increasing the absorption of milk protein. The product also is fortified with CoQ-10 and a vitamin B complex for fast and long-lasting energy. Slammers Sport Milk will be available next month in 14-ounce Chocolate, Vanilla and Tangerine-Orange flavors. The company says Slammers Sport Milk is one of the first of its sports and energy focused beverage line, including an energy milk beverage that is in its development stages.