Gatorade Losing Sports-Drink Category Share To Upstart Rivals

Gatorade Losing Market Share To Upstart Rivals

Gatorade last year controlled 82% of the sports-drink category, but that is "down more than 10 share points from two decades ago, when it owned 93% of the market," according to Natalie Zmuda of AD AGE. The company is getting "more volume out of existing customers but losing a nearly equal amount to rivals at the same time," and while sports-drink volume "gained 2.5% last year, volume for the Gatorade family was up just 1%." Deutsche Bank analyst Marc Greenberg in a report noted that the hydration category has seen "more than 200 new brand introductions in the past two years." Greenberg: "Gatorade retains strong metrics in terms of consumer loyalty and purchase frequency. The growth slowdown in an expanding category ... reflects competitive losses, not only to direct substitutes like private label and Powerade but newer enhanced-water products like Vitaminwater." Industry insiders noted that Gatorade's message "hasn't been consistent," and several said that there were "few advertising messages in [Q1] around the brand's core functional competencies." Technomic Exec VP Bob Goldman: "They've kind of wavered a little bit. But at the same point in time, competitors aren't ... doing anything that's all that memorable." Gatorade has had trouble "attracting new customers." Greenberg's report indicated that loyal Gatorade drinking are consuming 7.7% more by volume, but another 8% of its volume "is being lost to rivals." Also, just 0.4% of its "volume growth is coming from new users." A former PepsiCo exec said that the "lifeblood of many of these brands, young consumers, has been a challenge for Gatorade." The former PepsiCo exec: "The risk to the franchise was at the younger end -- kids who were just starting to play sports and didn't know that Gatorade was first, best and only" (AD AGE, 4/21 issue).