As Coca-Cola chairman and chief executive Neville Isdell battles from his Atlanta base to transform the Coca-Cola company into a “total soft drinks provider”, arch-rival PepsiCo seems to be achieving Coke’s goal with relative ease.
Now Britvic, PepsiCo’s UK branding and distribution partner, is to launch Pepsi’s all-conquering Gatorade sports drink into the UK vending market. The company has hired Chelsea and England midfielder Frank Lampard to front a marketing campaign for the drink in the run-up to the 2006 World Cup finals. Some say it is only a matter of time before the brand becomes a powerful force in the UK sports drink market.
While Coca-Cola is still number one for sales of carbonated soft drinks both globally and in the UK, PepsiCo has the edge where it matters – in the fast-growing sectors of waters, juices and sports drinks.
Much of PepsiCo’s global success in the sports drink category is owed to its 2001 purchase of Quaker Oats, which owned Gatorade, a brand that Coke backed out of buying. Gatorade has enjoyed an almost unshakeable 80 per cent share of the US sports drinks market.
The drink itself is popular among athletes all over the world, including the UK. Gatorade’s claim is that it quenches thirst by replacing fluids and minerals to optimise athletic performance. Its origins date back to the University of Florida in the mid-1960s, when sports physiologists created the drink to improve the performance of the school’s American football team, the Gators. Following the introduction of Gatorade, the Gators become the top US college team for many years.
In 1988, Gatorade established its own scientific research facility, the respected Gatorade Sports Science Institute, which aims to expand knowledge of exercise and help enhance performance and wellbeing in athletes.
In the UK, Gatorade will face strong competition from GlaxoSmithKline’s Lucozade Sport, which holds a 42 per cent market share by value. Coke is increasing its presence through Powerade, which almost doubled its market share between 2002 and 2004 to 11 per cent.
But with endorsement from Lampard, Gatorade could become as popular in the UK as it is in the US. With orange and lemon flavours initially available in sports and leisure outlet vending machines only, Gatorade is already focusing on its key market. Sponsorships and athlete endorsements are the key to driving success in the sports drinks categories and Gatorade is to become the official sports drink for the England football team for next year’s World Cup.
Lucozade Sport marketing already features the face of one of the England team’s most popular players in Steven Gerrard, while Coke’s Powerade was the official drink of the British Lions’ tour of New Zealand earlier this year. With more than 9 million people in the UK regularly using gyms, sports drinks look likely to continue the growth which has seen the market increase in value by 180 per cent to &£137m since 2000.
One industry insider says: “Britvic will put Gatorade in the vending market to start with, but it won’t be too long before it widens distribution to include grocery multiples, which account for 40 per cent of retail sales in the category. The development of convenience stores by Sainsbury’s and Tesco provide the ideal environment for impulse purchasing.
“Meanwhile, gyms will provide good opportunities for growth with many of the owners now putting greater emphasis on secondary spend through retail offerings.”