Rebranding of category leading products as well as no- and low-calorie varieties has helped the sports drink market rebound in dollar sales as well as unit sales. Sales of non-aseptic sports drinks increased 12.2 percent to more than $3.7 billion for the 52 weeks ending Feb. 20 in supermarkets, drug stores, gas and convenience stores and mass merchandise markets excluding Wal-Mart, according to SymphonyIRI Group, Chicago. Unit sales experienced a 17.2 percent growth during the same time period, according the market research firm’s data.

In 2010, notable changes took place in the sports drink marketplace as Gatorade, a brand of PepsiCo, Purchase, N.Y., rebranded its product line with the release of G Series and G Series Pro, which are both three-tiered product lineups. The systems’ products are arranged in the following platforms: Prime 01, a pre-game fuel; Perform 02, designed for during activity rehydration; and Recover 03, a post-performance muscle recovery variety.

“While many consumers were initially confused with the rebranding efforts, they have slowly come on board and sales reflect that,” says Ty Law, research associate at Euromonitor International, Chicago.

Gatorade Perform, the rebranded identity of Gatorade Thirst Quencher, ranked No. 1 in dollar sales at more than $1.8 billion for the year ending Feb. 20, SymphonyIRI states. Gatorade Thirst Quencher still accounted for more than $445.4 million in sales, SymphonyIRI states. Gatorade branded products made up 76.2 percent of the market share and accounted for nearly $2.9 billion for the 52 weeks ending Feb. 20, according to SymphonyIRI data. G2 Perform, the rebranded identity of low-calorie G2, ranked fourth with more than $323.4 million in sales, while G2 still experienced dollar sales of more than $87.9 million during the time period, SymphonyIRI reports. Gatorade’s focus on performance and targeting hardcore athletes has helped to stimulate category growth for sports drinks, says Garima Goel Lal, senior analyst at Mintel International, Chicago.

Sports drinks companies are “targeting core consumers and launching products that speak to their needs,” she says. Goel Lal says that Gatorade also is expanding its demographic reach with the development of G Series Fit, which in addition to low-calorie drinks and fruit-based protein drinks offers energy bar bites. The product lineup is targeted to the 18- to 34-year-old demographic, which shows a higher incidence of drinking energy drinks as well as bottled and enhanced waters, she says.

The other top-selling brand, Powerade Ion4, owned by The Coca-Cola Co., Atlanta, ranked No. 2 in sales with more than $635.1 million, while Powerade accounted for more than $44 million in sales, SymphonyIRI states. Powerade branded products made up 23 percent of the market share and more than $871.6 million in sales during the time period, according to SymphonyIRI.

Earlier this year, SymphonyIRI named Powerade Ion4 as the No. 1 food and beverage New Product Pacesetter. Susan Viamari, editor of Times & Trends, referenced the product’s convenience and health-focused image as some of its positive attributes.

“Powerade Ion4 is positioned as a healthier-for-you alternative to traditional sports drinks,” she says. “Powerade Ion4’s healthier-for-you message is appealing to athletes for its formula that replenishes essential electrolytes that are naturally lost in sweat and for boosting energy metabolism. But it is appealing to ‘everyday Joes’ that are trying to eat healthier for the same reasons.”

But branding efforts aren’t the only ways analysts see potential for the sports drinks category to grow.

“Another way sports drinks can regain market share is to create more opportunities for consumption,” Euromonitor’s Law says. “Sports drinks are typically only consumed after exercise so their consumption levels are constrained by frequency of athletic events.”

Based on what has taken place this past year in the sports drinks category, Mintel’s Goel Lal anticipates new product momentum to continue.

“We are projecting a positive outlook for the category based on the innovation of the category and how consumers have responded to the innovation,” she says.

Making calories count
In addition to refocusing its branding on athletes, the sports drink category also benefited from offering low- and no-calorie varieties.

Powerade Zero ranked No. 5 as it exhibited an 81.6 percent increase in sales to account for more than $185.5 million for the 52 weeks ending Feb. 20, according to SymphonyIRI data. Gatorade’s low-calorie options of G2 and its re-branded identity G2 Perform also were in the top 10 of sports drinks.

“Many consumers left sports drinks over the 2008 and 2009 years due to the high amount of calories,” Euromonitor’s Law says. “As consumers became more health-oriented, they started to pay more attention to labels and what is being put in their bodies. Part of the reason for success in 2010 is the success of the new low-calorie sports drinks.”

Law says that G2-branded products and Powerade Zero both showed success in 2010, which helped drive the recovery of the sports drink marketplace.

Another health and wellness trend that Law says could help the sports drink category are natural products and ingredients.

“In addition to the low-calorie options, natural products and ingredients may also help sports drinks regain market share,” he says.

Available at Whole Foods Markets in select cities, Gatorade offers its G Natural Thirst Quencher and its G2 Natural Thirst Quencher. G Natural and G2 Natural contain electrolytes and carbohydrates from natural ingredients including sea salt, fruit flavors and natural sweeteners, Gatorade says.

Mintel’s Goel Lal says a number of products in the category do not contain additives and preservatives. This practice is a good way to speak to current consumer trends, she says.

Variety expansion
Arizona Beverages USA LLC, Woodbury, N.Y., released its own natural sports drink line earlier this year. The company launched Arizona Sports, a line of 100 percent natural isotonic sports drinks made with a proprietary formula that contains cane sugar and a balanced concentration of salts and minerals, the company says. The three flavor varieties contain 50 calories for each 8-ounce serving. Distribution began in the Northeast in February and will continue a nationwide rollout throughout the year.

Although private label makes up less than 1 percent of the sports drink category, the segment experienced notable growth last year. Private label sports drinks saw an 89.4 percent increase in sales that equated to $21.1 million in sales, according to SymphonyIRI data.

Even though private label sales increased, Goel Lal says that compared to other beverage segments, private label sports drinks did not grow exponentially. To gain market share of the sports drink category, private label and smaller brands will need to find a way to differentiate themselves from likes of Gatorade and Powerade, Euromonitor’s Law says.

“In the U.S., the sports drink category is synonymous with Gatorade and Powerade — the two brands account for 95 percent of the sports drink category,” he says. “Smaller brands and private labels are struck with trying to differentiate themselves from the two powerhouses. Private label companies try to compete with using low-price points and there are some smaller companies who only produce ‘all-natural’ sports drinks in efforts to stand out.”

Jeff Daanen, vice president of retail sales with Green Bay, Wis.-based Winona Foods Inc., a hot-fill co-packer for sports drinks, says that sports drinks continue to be a growing category.

“It’s a perfect addition to private label because of the profit margin that’s involved,” he says.

Daanen says retailers could double, and in some cases triple, their profit margins by opting for a private label sports variety.

Emerging competition
Analysts note that the recession, coupled with consumers turning to enhanced waters had an effect on sports drink sales in years past. However, sports drinks could find more competition from natural beverages, such as coconut water. “Coconut water naturally contains high amounts of electrolytes and potassium with a low-calorie content,” Law says. “This natural hydration beverage appeals to the health and wellness consumers who desire more natural products and fewer calories in their drinks.”

Mintel’s Goel Lal says that coconut water remains fairly niche at this point, but she does anticipate sports drinks will face competition as coconut water receives more exposure and companies release more products. However, price points could keep coconut water from becoming a mass product, she says.

But coconut water is not the only variety that is finding its niche in the sports drink category. Celsius Holdings Inc., Boca Raton, Fla., makers of Celsius non-carbonated pre-exercise fitness drinks, is positioning its products as part of consumers’ sports drink regimen.

“Sports drinks are going to have to get more into the fitness world — back to the athletes, and a little bit less the general population that is looking for a refreshing drink,” says Steve Haley, Celsius’ founder and chief executive officer. However, Celsius is focusing its efforts on filling a void of how to get your body prepared for the fitness world, he says.

“We’re positioning Celsius as your ultimate fitness partner,” Haley explains. “The main drink occasion where it’s the most beneficial is prior to exercise.”

Celsius helps the body to burn calories, reduce body fat, energize metabolism and provide lasting energy through its formulation of green tea with EGCG, ginger, calcium, chromium, B vitamins and vitamin C, the company says. The company provides information from clinical studies about the products on its website, Haley says. The studies state that when consuming Celsius it might result in burning calories, providing lasting energy, reducing body fat, increasing endurance and providing greater resistance to fatigue.

Earlier this year, the company extended its flavor line with Apple Orchard Blend, which is sweetened with a natural stevia-based sweetener. BI