Work Drug

Nature's Gatorade


When Boston Celtics forward Kevin Garnett was rehabbing a knee injury, his new massage therapist turned him on to the benefits of an all-natural lifestyle. "I've been doing yoga, eating right," he says. He also began drinking coconut water, which, like sports drinks, helps athletes to replenish potassium, sodium, and electrolytes lost in sweat. Coconut water presented a problem, however: Since 2004, Garnett has endorsed Gatorade, starring in memorable ad campaigns including last year's "The Quest for G."

Garnett now says that quest is over. Last month, he signed on to rep Zico coconut water, which was founded in 2004 in Hermosa Beach, Calif., when CEO Mark Rampolla decided that the world needed a natural sports drink. "This is not a financial deal for him," says Rampolla, who added that KG, now Zico's highest-profile spokesperson, was motivated by his impact on kids. "He's walking away from a multimillion-dollar opportunity."

Garnett's decision comes at a pivotal time for sports drinks, whose $7 billion market is three-quarters owned by Gatorade, with the rest dominated by Powerade. PepsiCo (PEP) bought Gatorade in 2001, and increased the number of cases sold 71 percent from 2002 to 2007, according to independent auditor Beverage Digest. Coca-Cola's (KO) Powerade more than doubled its case sales in the same period as both companies marketed to the widest possible audience. But the chase for couch potatoes alienated core consumers—athletes—who became turned off by added sugar and artificial ingredients. This opened the door for competitors such as electrolyte-infused water, like Vitaminwater, and now coconut water.

In 2009, Coca-Cola paid nearly $15 million for 18 percent of Zico (which expects to be a $100 million brand by yearend). The same year, PepsiCo bought coconut water-maker Amacoco, with brands Kero Coco and Trop Coco. Another player, Vita Coco, founded in 2003, is still independent. And CocoZona debuted last week from privately held AriZona Beverages.

Sports drinks are fighting back against these players by offering healthier alternatives such as Gatorade's stevia-sweetened G Natural and sucralose-sweetened Powerade Zero. Which is why Zico, a drink that is naturally nutritious, seems to have everything to gain. "The amazing thing," Rampolla says, "is that Gatorade even needed to exist."

Stanford is a reporter for Bloomberg News in Atlanta.

We Almost Lost the Nasdaq
LIMITED-TIME OFFER SUBSCRIBE NOW

(enter your email)
(enter up to 5 email addresses, separated by commas)

Max 250 characters

 
blog comments powered by Disqus