PepsiCo Looks To Boost Gatorade Sales With New Drinks
PepsiCo announced a 13% increase in Q2 profit “on the strength of international sales and raised its full-year earnings outlook,” but its shares yesterday “skidded 1.3% to $65.76 in pre-market trading as the company announced declines” for Gatorade and Tropicana, according to Vinnee Tong of the AP (7/24). At presstime, shares of PepsiCo were trading at $67.35, up 1.65% from yesterday's close (THE DAILY).
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PepsiCo To Relaunch
SoBe LifeWater |
TAPPING WATER: The WALL STREET JOURNAL’s Betsy McKay reports PepsiCo this fall plans to introduce a new “low-calorie beverage with electrolytes that will be marketed to athletes as a non-workout drink.” The company also plans to introduce a “new version of its Propel fitness water with nutrients, and relaunch its SoBe LifeWater.” The Q2 decline in Gatorade sales is “partly the result of unusually strong sales of Gatorade early last year: sales of the sports drink rose 29%” in Q2 ’06. PepsiCo said that it “expects Gatorade sales to improve” in Q3 and Q4 and that Gatorade is “expected to post growth over the long term in the ‘high single digits.’” Morgan Stanley analyst Bill Pecoriello said that the new electrolyte beverage “would help boost sales of the Gatorade franchise because it is meant for ‘nonsweat occasions’ in which athletes and other consumers had been reaching for competing drinks” (WALL STREET JOURNAL, 7/25). Beverage Digest Publisher John Sicher added, “There is certainly a movement towards no- and low-calorie beverages, so trying this new version of Gatorade is certainly at least worth a shot.” But he noted that a lower-calorie version of Coca-Cola's Powerade introduced a few years ago "had not sold well” (N.Y. TIMES, 7/25).
GLACEAU: In a Q&A with the WALL STREET JOURNAL’s Stephanie Kang, Glaceau Senior VP/Marketing Rohan Oza discussed the growth of the company’s vitaminwater and Smartwater brands. When asked about Glaceau's relationships with celebrities, Oza said, "All the celebrities that have embraced the brand are fans of Glaceau. ... A lot of our celebrity relationships are driven by celebrities discovering the brand at their gyms, in their hotels when they're on the road, and then deciding to become a part of the company.” Oza said of Vitaminwater’s “Try It” campaign, “We are going to extend the campaign with a variety of other partners. ... [Heat C Shaquille O’Neal] came to us and said, ‘It's time for mine.’ And who's going to argue with Shaq?” (WSJ.com, 7/25).
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