Gatorade Sales Plummet

Posted by: Burt Helm on April 24, 2009


blog gatorade bottle.jpg Does this look like Gatorade to you? Gatorade’s volume sales fell by 13.7% in the first quarter, according to a Beverage Digest report out today , and some blame the new bottle design. The idea is that the new design, on most store shelves since January, is so different from the old one that consumers don’t recognize it. The brand faces other problems: Coca-Cola is putting Gatorade in a vise, running attack ads on the brand from the lower-priced Powerade, and spending heavily on sports advertising for the higher-priced Vitamin Water, which was a sponsor of the NCAA basketball tournament in March.

Here’s what happened to sports drinks sales in the first quarter, according to Beverage Diget’s John Sicher:

Sports Drinks 1st Qtr 2009      
  Vol Share Share +/- Vol +/-
Gatorade 73.7 -6.3 -13.7%
Powerade 25.1 6.1 23.6%
Other 1.2 0.2  
Category 100   -6.3%
Source: Beverage Digest      

Meanwhile, PepsiCo Americas Beverages CEO Massimo D’Amore told Sicher he thinks the sales decline is due to consumers trading down to cheaper beverages, not the redesign.

I think all those factors are contributing - a 6 point loss of market share in 3 months is severe. Earlier in the month I wrote about the massive overhaul underway inside PepsiCo, which includes an overhaul of seven major brands. At that point, the jury was still out, except for the failed rebranding of Tropicana. If Gatorade sales don’t recover, this will give D’Amore two serious losses, with the future of five brands still to be seen.

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Reader Comments

Bob Gilbreath

April 25, 2009 08:56 AM

You forgot to account for and lay blame on the horrible, star-laden ad campaign, "Got G?", for these very poor results. The company likely spent well north of $50 million on commercial production and media placement in the quarter. I wonder if this failure is admitted in D'Amore's office. Or maybe results would have been even worse without this remarkable creative work...

I would suggest that Gatorade nix the expensive ads and follow Nike's lead: Combine meaningful events and digital services that actually help athletes reach their goals. That might be a reason for choosing Gatorade and paying a little more. Expensive ads and celebrity shills won't cut it anymore.

Udjo

April 27, 2009 01:11 AM

Why would you want to overhaul a brand that is proven successful in the market (in the US at least)?
Unless the change is to gain acceptance in other part of the world...
The lost of sales in the US, maybe compensated by the increase sales in other market who are less "sport" driven...
It's one of the downpart of moving to a global brand...

Former Gatorade Drinker

April 27, 2009 01:46 PM

I never provide input on this stuff but I am a consumer and ran across this article and felt like I should respond. I could not find my old gatorage bottle so i tried Powerade and a couple of others.....take it from a basic consumer your bottle redesign did not work. Fire your ad company that came up with that one.

Sports Drinker

April 27, 2009 02:46 PM

Of course this happened. It was easy to be the leader when you're the ONLY drink in the category advertising. It wasn't until a year or so ago Coke started to actively challenge the Gatorade brand. And look what happened. Now, people have a choice rather than only one option. Even the folks at the former ad agency knew this day would come. You can blame whomever does the current advertising, (just like sports do by making the coach the fall guy when the team is doing bad) but everyone on the brand, Pepsi and all the agencies involved knew this slide was inevitable.

mcelroy

April 30, 2009 03:40 AM

This was definitely a bad idea. How can you change the the label that must when you have such a product as Gatorade. This is a brand that had no need for a brand overhaul. They should have done the research and see that customers would not like it.

STS

May 18, 2009 10:48 AM

New label, "what's G" confusion campaign, Jungle Book cartoons, athletes dressed as knights and weird break dancing... this brand is seriously confused!

Is it still even a sports drink?

Dan Finlinson

June 2, 2009 04:37 PM

I own the company that put Gatorade on the map. We invented the Gatorade towel and did all of Gatorades clothing and accessories for several years. When we started with Gatorade in Indianapolis, it was doing approx 80 million in business and when Gatorade breached a contract with us it was doing around 1 billion. What else do I need to say. I can put together the old team. Call me. Dan Finlinson 765-349-9979

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News, opinions, inflammatory meanderings and occasional ravings about the world of advertising, marketing and media. By marketing editor Burt Helm, Innovation Editor Helen Walters, and senior correspondent Michael Arndt.

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