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QUAKER OATS LOOKS FOR ENERGY FROM GATORADE
Published June 22, 1995
Quaker Oats CEO Bill Smithburg is leading Quaker "into the rowdiest marketing war of many summers, taking on the beverage brutes Coca-Cola and PepsiCo in two categories," sports drinks and natural beverages, according to a piece in the current FORTUNE. FORTUNE's Patricia Sellers writes that Smithburg deserves credit for keeping Gatorade on "top of its game," as the brand's visibility in pro leagues like the NBA is "unparalleled." Sales hit $1.2B in '94, but Coke and Pepsi are "applying a full- court press" with All-Sport and PowerAde. Pepsi is increasing All-Sport's ad budget by 40%, and, since '94, Gatorade's market share has dropped three points to 81%. Michael Jordan is "trying to help Gatorade rebound," but he is "being double-teamed by" Shaquille O'Neal and Ken Griffey, Jr., who pitch for All-Sport. Smithburg says Gatorade, available in 27 countries, can remain No. 1 worldwide (FORTUNE, 7/10 issue). MARKET SOURS ON SNAPPLE? Shares of Quaker Oats fell in trading yesterday after the company warned that the acquisition of Snapple soft drinks "had been failing to live up to expectations." Quaker told analysts that sales of its Snapple iced tea and juice drink brands are running 15% behind last year (FINANCIAL TIMES, 6/22). In the current FINANCIAL WORLD, Jason Vogel asks, "Snapple shareholders made a killing selling out to Quaker. What about Quaker shareholders" (FINANCIAL WORLD, 7/4 issue). FORTUNE also notes that many feel Quaker overpaid for Snapple and that the brand "has a crowd of competition" (FORTUNE, 7/10). COKE FEELS LIFE: Coca-Cola is expected to post "strong second quarter earnings fueled by continued double-digit growth internationally and healthy U.S. results," according to Chris Roush of the ATLANTA CONSTITUTION. Overseas case sales are expected to increase 11-12%, while domestic sales could rise as much as 6% (ATLANTA CONSTITUTION, 6/22).