Gatorade Takes a Gamble With Its Heritage by Heading Off Field

While a Light Version Fizzled in 1990, Beverage Giant Has Learned Its Lessons Since Then (Think Propel)

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YORK, Pa. (AdAge.com) -- Brand Consultant Rob Frankel is flummoxed by Gatorade's plan to market a low-calorie electrolyte beverage for athletes when they're not exercising. "Why would I need Gatorade at my book-club meeting?" he asks.
After the failure of Gatorade Lite in 1990, can the brand successfully branch out with another lower-calorie beverage?
After the failure of Gatorade Lite in 1990, can the brand successfully branch out with another lower-calorie beverage?

Why indeed. PepsiCo's Gatorade owns a commanding 80%-plus market share of the $4 billion sports-drink category it created in 1967. But that also works against it, as its immense market share allows for little in-category growth. And with its sales recently lagging, Gatorade has little choice but to grow through new products -- and new reasons to drink them.

The gamble is whether this as-yet-unnamed "off-the-field hydrator," first revealed during a second-quarter earnings call with analysts, will push Gatorade too far from its core competency. "Why does a competitive athlete need a hydrating drink when they're not exercising?" asked Cymfony Chief Marketing Officer Jim Nail. "I can see the appeal for Gatorade in finding new occasions to drink it, but what's the compelling reason of an electrolyte beverage when you're not losing electrolytes?"

Info not forthcoming
Gatorade isn't saying much about marketing -- at least not yet. A spokeswoman said the company isn't releasing any more information until next year. She did say the drink will have 25 calories per eight ounces. (Regular Gatorade drinks have about 50 calories per eight ounces.) Gatorade agency Element 79, Chicago, referred calls to the client and said it is not working on marketing for the new product.

"It's an important distinction that this is from the Gatorade Co. as opposed to Gatorade the product," the spokeswoman wrote in an e-mail. "This is a low-calorie hydrator with electrolytes for athletes off the field (not a sports drink for on field)."

Gatorade has been down this road before. It introduced Gatorade Light in 1990, and as described in "First in Thirst: How Gatorade Turned the Science of Sweat into a Cultural Phenomenon," by Darren Rovell, that was "one of Gatorade's greatest mistakes." He wrote: "Loyal drinkers -- over 80% male -- made clear they wanted full-strength Gatorade or nothing. Though Gatorade Light fizzled, Quaker learned valuable lessons. The eventual result was the creation of Propel, a vitamin-enriched flavored water with just 10 calories per serving."

The image side
The genius of Propel is that it carries a name that isn't Gatorade, calling itself "Propel Fitness Water, from the makers of Gatorade." Launched in 2000, it was the first enhanced water to break the $100 million mark in 2002 and continues to be the market leader in enhanced water.

Beverage watchers expect Pepsi to follow a similar plan for the new beverage. John Sicher, editor of Beverage Digest, characterized the Gatorade Light era as "a different time and place," adding: "Today, consumers are looking for lighter, low-calorie beverages."

Some believe the company may plan to push the image side of Gatorade -- that is, competitive athletes drink it, so consumers can benefit from the same athlete image while taking in fewer calories.

A 'decent shot'
"The wonderful secret of Gatorade is that there is a lot of use already in nonathletic occasions even though the brand is marketed for the performance athlete," Mr. Sicher said. "Certainly we already see people using it as a lifestyle beverage, probably because of the way it's marketed. It's aspirational. So the new product certainly has a decent shot of picking up more of that."

But others aren't convinced the average Joe will clearly grasp when and why he should drink yet another Gatorade. "I'm having to think about this too much," said branding consultant Joe Calloway. "'Wait, now when am I supposed to drink this?' If consumers have to be the ones to figure out when and where to use your product, I would say that's not a good thing," he said.

If it succeeds, Mr. Calloway said it could be one for the advertising history books. "It will be an interesting story in that it opens up that whole subject again of how far can you go with a brand franchise before you push it too far?" he said. "It's a calculated risk. ... But innovative companies take risks. As Edison said, 'To have a great idea, you have to have a whole lot of them,' and this is an idea."
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