Powerade is renewed for the first time in more than a decade

For the first time in 13 years, the sports drinks brand is redesigning its packaging and launching two new, calorie-free and sugar-free products: Powerade Ultra and Powerade Power Water. Both are coming to the shelves this winter.

For Coca-Cola, which manufactures Powerade, renewal is a way to boost the brand by attracting a wider group of people: those those who work casually, people who focus on strength training and serious athletes.

Powerade Power Water is designed for casual athletes, for example, people jogging, doing yoga or doing crossfit for exercise. The flavored water product is enhanced with electrolytes and comes in flavors of berry cherry, tropical mango and cucumber lime.

Powerade Ultra is for people who are more focused on building strength. The product comes in mixed flavors of berries, white cherries and citrus. In addition to electrolytes and vitamins, Ultra contains creatine, which can be consumed as a supplement.

Both products present Powerade’s new stylish look, which includes plastic bottles that can be grabbed. They also show a slightly different logo, where “power” is on a separate line of “ade”. Each Powerade package, including the classic Powerade and Powerade Zero Sugar, will feature the new design elements. Old packages should be off the shelves in a few months.

Sports drinks in general are an attractive market for companies such as Coke (KO) Y PepsiCo (ENERGY). Although they are a little more expensive to prepare than soft drinks, they are sold at a higher price, explained Laurent Grandet, food and beverage analyst at Guggenheim Securities.

“Those products are very profitable,” he said. According to Nielsen, sales of sports drinks in the US UU. They reached $ 6.5 billion in 2019, an increase of 6% over the previous year.

Gatorade, the main competitor of Powerade, launched a sugar-free version of its product in 2018 to keep the brand fresh. But Powerade, which introduced its own sugar-free product in 2007, has not updated the brand since then, allowing competitors to gain some ground.

In 2020, with new knowledge about how people exercise, Coca-Cola is “re-engaging” with Powerade, said Shane Grant, who runs the water, sports, tea and coffee businesses for Coca-Cola North America. “We are really optimistic about the brand.”

Blurred categories

Power Water is for casual athletes.

Coca-Cola says its goal is to be “a total beverage company” selling sports and energy drinks, soda, coffee, water, tea juice and other beverages to all types of consumers. The new Powerade platform is a way to attract more customers, even if that means competing with itself.

People used to drink sports drinks when they played sports, coffee for caffeine and beer for alcohol. Today, new types of beverages, such as alcoholic or caffeinated beverages, for example, are blurring those categories.

That means that competition between traditionally different drinks is warming up. And that trend has made Powerade look a bit stale in comparison.

“If it expands beyond sports drinks, it has many other products that compete for the attention of athletes and exercise enthusiasts. Coconut water, electrolyte water, alkaline water … those are all products that people are resorting, “said Duane. Stanford, executive editor of Beverage Digest.

An example is Hoist, who “hydrates like an IV, tastes like a sports drink,” according to the brand’s website. Stanford refers to this as part of a group of products that are like “Pedialyte for adults.” Electrolit, another drink that fits into that category of recovery, is presented as a way to hydrate after spending time in the heat, exercising, or after a drunk night.

Old Powerade packing. Old Powerade packing.

“Consumers look for the functionality of beverages in a growing number of categories, which will continue to put pressure on sports, performance and nutritional drinks,” said the research firm Mintel in a March 2019 report on the beverage category. sports. “The lines also blur when it comes to what constitutes a nutritional beverage versus a performance or weight loss beverage.”

These smaller start-ups do not represent an individual threat to traditional sports drinks, Stanford said. But “when you add all that, it becomes a significant enough challenge.”

As the categories mix, the products in the Coca-Cola portfolio begin to look alike. If Power Water is stored together with other water brands, it can compete with Coca-Cola Smartwater and its alkaline and antioxidant products.

Grant is not too worried about the overlap.

“As these categories blur, we are seeing a crossroads of users, sure. But we see a slightly different type of user, a slightly different type of occasion,” he said. “We are quite deliberate about targeting different segments.”

Powerade is in more direct competition with Gatorade, the segment leader, and a fast-growing, albeit much smaller, competitor, called BodyArmor, which is distributed by Coca-Cola bottlers.

The competition heats up

Body Armor is a promising brand of sports drinks. Body Armor is a promising brand of sports drinks.

For years, the sports drinks market has been dominated by two players: Gatorade, the leader of the segment by far, and Powerade.

Gatorade was developed at the University of Florida in the mid-1960s as a way to help hydrate athletes who suffer from heat. Years later, in 2001, PepsiCo swallowed Quaker, largely to acquire the powerful brand of sports drinks. It has remained an important part of PepsiCo’s portfolio.

Powerade was launched in 1988 and is the second sports drink in the US market by sales and volume after Gatorade, according to research company Euromonitor International.

The couple is still by far the biggest sports drink brands. But recently, a young company called BodyArmor has begun stealing market share from both brands, and has captured Coca-Cola’s attention. Today, Coca-Cola is a minority shareholder in BodyArmor. The company could one day acquire the brand directly.

“Coca-Cola is in a unique position,” Stanford said. “Now they have to manage these two brands at any end of the spectrum. It’s a challenge.”

BodyArmor, which is made without artificial sweeteners, flavors or dyes, is a “more premium” product, Stanford said. It also has a water line, as well as a reduced option in sugar and calories.

Grant said Powerade is not trying to serve as a complement to BodyArmor. “We treat BodyArmor like a competitor,” he said. “Our approach is really to build the Powerade business.”

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