GATORADE

 Disruptive technology? created an entirely

new “sports drinks” category
 Typical odd origin—early ‘60s—Univ. of
Florida—hot, humid, football
 1965: tested on ten members of the Univ.
of Florida’s Gator football team
 Serendipity: Gators had a winning season
 reputation as team that excelled during the
second half of play. Was it Gatorade?
 word-of-mouth and unpaid publicity
 January 1, 1967—Gators beat Georgia
Tech in the Orange Bowl 27-to-11
 More serendipity: Georgia coach quoted
by Sports Illustrated: “We didn’t have
Gatorade. That made the difference.”
 coaches all over the country clamored for
Gatorade.
A Product in Tune With the Times
 1967: Stokely-Van Camp, a canned fruit
and vegetable company, bought the
exclusive rights to make Gatorade
 NFL’s “official” sports drink
 professional athletes promote image of
magical elixir to armchair athletes
 good for you: Gatorade versus Kool-aid
Sales Soar Higher: More Money Needed

 1983: Quaker Oats buys Stokely-Van

Camp
 sports drink sales are $85 million per year
 Quaker Oats money creates larger market
 heavy promo spending for Michael Jordan
 1993: Gatorade sales reach $1 billion/year,
22 percent of Quaker Oats profits
 CONSUMER SIDE FIGURED OUT
Competitors Enter: Brand Transference
 1992: Coke introduces Powerade
 official sports drink of ‘92 and ‘96
Olympic games and World Cup Soccer
 Distribution and marketing advantage used
to muscle market share
 1992 Pepsi All Sport
 hires Basketball’s Shaquille O’Neal
 1995: Gatorade hold over 80% share
 Powerade and All Sport less than 4% each
 Jan 2000: Gatorade still 80% market share
but losing share
 2000: 40% OF QO SALES/profits.
NUMBER ONE PRODUCT
 Oatmeal, Life cereal, Aunt Jemima, Rice-
A-Roni, Near East, Cap’n Crunch
 DO THE SAME WITH SNAPPLE?
Summer 2001: Pepsi Buys Quaker
 Pays $13.8 billion (Coke passes)
 Pepsi has distribution—Gatorade has
“brand equity”
 Powerade gains share—up 2.5% points to
13% by 2002
 Gatorade loses share—down 2.5% points
to 78%
 Still holds a virtual monopoly
 2005: Gross Retail Sales exceed $3 billion
 2006 sales grow by double digits
 2007 sales flat
 Challenge lies in international markets
 80 countries—Canada ’84, Asia ’87,
Europe and South America ‘88
 Market still growing briskly BUT merging
with other categories
Product Proliferation—Is it
“Hyperextension?”
 Endurance Formula in 2004 (more
electrolytes—calcium and magnesium)
 Meal supplementation—energy bars
 Thirst quenchers
o A.M.
o Rain
o Front
o Fierce
 Propel Fitness Water in 2000
 G2—half the calories
o “off-field hydration
 Tiger (Woods)?

ARE THEY HURTING

THE BRAND?
 GLACEAU
VITAMIN WATER

 Created in 1996 by J. Darius Bikoff

 From that hotbed of innovation—
Whitestone, Queens
 What makes it special?
 It is vapor distilled
 Deionized
 Reverse osmosis
 Sweetened with crystallized fructose
 Slogan—“hydrate responsibly
 The rapper 50-Cent was an early investor
 April 5, 2005—Pepsi’s SoBe “Life Water”
I sued by Glaceau for violation of Trade
Dress

 May25, 2007—Coke buys

Glaceau for $4.1 billion
 Rapper 50-Cent makes $400 million
 Coke uses Vitamin Water to attack
Gatorade
 Product Proliferation—Smart Water,
Fruit Water