Powerade is redesigned for the first time in over a decade

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For the first time in 13 years, the sports beverage brand is reworking its packaging and launching two new calorie and sugar-free products: Powerade Ultra and Powerade Power Water. Both will hit the shelves this winter.

For Coca-Cola, which is Powerade, the revision is a way to strengthen the brand by targeting a wider group of people: these Exercise casually, focus on strength training and serious athletes.

Powerade Power Water was developed for casual athletes – for example for people who jog, do yoga or cross over for exercises. The flavored water product is enriched with electrolytes and is available in berry cherry, tropical mango and cucumber lime flavors.

Powerade Ultra is intended for people who value strength more. The product is available in mixed berry, white cherry and citrus flavors. In addition to electrolytes and vitamins, Ultra contains creatine, which can be taken as a dietary supplement.

Both products are characterized by the new, slimmer look from Powerade, which includes non-slip plastic bottles. They also show a slightly different logo, with "power" on a different line than "ade". Every Powerade package, including the classic Powerade and Powerade Zero Sugar, will include the new design elements. The old packaging should be on the shelves within a few months.

Sports drinks are generally an attractive market for companies like Coke (KO) and PepsiCo (PEP), While they are only slightly more expensive to produce than soft drinks, they are sold at a high price, said Laurent Grandet, a food and beverage analyst at Guggenheim Securities.

"These products are very profitable," he said. According to Nielsen, sports beverage sales in the U.S. were $ 6.5 billion in 2019, an increase of 6% over the previous year.

Powerator's main competitor, Gatorade, launched a sugar-free version of its product in 2018 to keep the brand fresh. Powerade, which launched its own sugar-free product in 2007, has not upgraded the brand since then, allowing competitors to gain ground.

In 2020, with new insights into how people train, Coca-Cola is "re-engaging" with Powerade, said Shane Grant, who runs Coca-Cola North America's water, sports, tea, and coffee businesses. "We are very optimistic about the brand."

Blur categories

Power Water is for casual athletes.

Coca-Cola wants to become "a beverage manufacturer" by selling sports and energy drinks, soda, coffee, water, tea juice and other drinks to all types of consumers. The new Powerade platform can attract more customers – even if it means competing with yourself.

People used to grab sports drinks when they did sports, coffee for caffeine and beer for alcohol. Nowadays, new types of beverages – such as alcoholic or caffeinated seltzer – are blurring these categories.

This means that competition for traditionally different drinks is increasing. And this trend has made Powerade somewhat stale in comparison.

"If you go beyond sports drinks, you have a lot of other products that compete for the attention of athletes and sports enthusiasts. Coconut water, electrolyte water, alkaline water … all of these are products that people turn to," said Duane Stanford , Editor-in-chief of Beverage Digest.

One example is Hoist, which, according to the brand's website, "hydrates like an infusion, tastes like a sports drink". Stanford describes it as part of a group of products that are like "Pedialyte for Adults". Another drink that fits into this recreational category, Electrolit describes itself as a way to hydrate after spending time in the heat, exercising, or going out after a night of drinking.

The old packaging from Powerade.

"Consumers are looking for functionality for drinks in a growing number of categories, which will continue to put pressure on sports, performance and nutritional drinks," said research firm Mintel in a March 2019 report on the sports drinks category. "The lines also blur when it comes to what constitutes a nutritional drink versus a performance or weight loss drink."

These smaller promoters do not in themselves pose a threat to traditional sports drinks, Stanford said. But "if you add it all up, it will be a big enough challenge."

If the categories coincide, the products are similar across the entire Coca-Cola portfolio. When Power Water is in stock along with other brands of water, it can compete with Coca-Cola's Smartwater and its alkaline and antioxidant products.

Grant is not particularly concerned about the overlap.

"With these categories blurring, we're sure to see a change of user. But we're seeing a slightly different type of user, a slightly different type of opportunity," he said. "We are very deliberately focused on different segments."

Powerade is in more direct competition with Gatorade, the market leader in the segment, and a rapidly growing, albeit smaller, competitor called BodyArmor, which is itself marketed by Coca-Cola bottlers.

The competition is getting tougher

Body Armor is an aspiring sports drink brand.

The sports drinks market has been dominated by two players for years: Gatorade, by far the market leader, and Powerade.

Gatorade was developed at the University of Florida in the mid-1960s to moisturize athletes suffering from the heat. Years later, in 2001, PepsiCo Quaker largely devoured to acquire the high-performance sports beverage brand. It has remained an important part of PepsiCo's portfolio.

Powerade was introduced in 1988 and, after Gatorade, is the second sports drink in terms of sales and volume on the US market, according to the research company Euromonitor International.

The couple is still by far the largest sports beverage brand. Recently, a young company called BodyArmor started stealing market shares from both brands – and caught the attention of Coca-Cola itself. Today, Coca-Cola is a minority stake in BodyArmor. The company could one day acquire the brand entirely.

"Cola is in a very unique position," said Stanford. "You now have to manage these two brands at both ends of the spectrum. It's a challenge."

According to Stanford, BodyArmor, which is made without artificial sweeteners, flavors or colors, is a "premium" product. It also has a range of water, as well as a reduced sugar and calorie option.

Grant said Powerade is not trying to supplement BodyArmor. "We treat BodyArmor as a competitor," he said. "Our focus is really on building the Powerade business."