What G Isn't Is a Sales Success

But CMO O'Hagan Says Restaging Is on Right Path

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CHICAGO (AdAge.com) -- Gatorade maintains that "What is G?" is right on track, despite plummeting sales, consumer confusion and reports that creative is back on the drawing board.

PepsiCo restaged its iconic Gatorade brand earlier this year. According to Beverage Digest, Gatorade's volume plummeted 18% in the first half of 2009, when the effort, from TBWA/Chiat/Day, Los Angeles, asked and then answered "What is G?"

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Executives say Gatorade is continuing to evolve, with changes being made to the brand's marketing, advertising and even product offerings.

During a call with investors last month, PepsiCo Chief Financial Officer Richard Goodman described Gatorade as an area where "we have work to do." But Gatorade Chief Marketing Officer Sarah Robb O'Hagan said the beverage's restaging is right on target.

"The transformation is a long journey we started in 2009," she said in an interview. "And really our focus this year was broadening our perspective on athleticism."

Stronger interest
When asked if Gatorade would have cratered worse without the restaging, Ms. O'Hagan said, "None of us know." Sales, she said, "are just another dynamic in play." She added that Gatorade searches hit a five-year high in January, and the brand has generated three and a half times as much social-media interest as in 2008.

Two decades ago, Gatorade owned about 90% of the market, but its share slipped below 80% earlier this decade. In the past six months, however, Gatorade lost four full points and now claims only 75% of the market. Coca-Cola-owned rival Powerade, meanwhile, climbed to 24% market share by volume during the first half of this year after spending the past year at 22%.

Ms. O'Hagan declined to comment on the changes she said were coming to Gatorade's marketing by early 2010 but did say they will include a new slate of products, presumably geared at a variety of sports-related needs and usage occasions.

Executives close to the matter said Gatorade won't revert to previous creative, as Tropicana did earlier this year when its own rebranding was deemed a disaster.

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