ATLANTA -- It's shaping up to be a record-breaking season for isotonic sports drinks in this market.
Not only have the 1996 Summer Olympics brought the eyes of the world to "Hotlanta," but they have also poured an additional two million visitors into the streets.
Couple that with a traditional, sweltering, steamy Southern summer; new flavors and formulations from the three leading manufacturers; and hometown Coca-Cola's PowerAde isotonic being the official sports drink of the Olympic Games, and all the ingredients are there for a gold medal in sales potential.
"With isotonics, we see a big peak in the summer. Our sales are trending positive over the prior year, and probably will double if not triple what we were doing at this time [last year]," Craig McKenzie, operations manager at Region VII for Charlotte, N.C.-based Harris Teeter, told SN.
"We'll advertise All Sport, PowerAde and Gatorade throughout the summer. We'll have one of them in the ad almost every week, especially around the holidays," said Paul Sides, director of grocery merchandising at Cub Foods, owned by Super Discount Markets, Lithia Springs, Ga.
"The glass juice/isotonic category is one of the top 10 categories in the store and it is still growing," he said.
Sides said his chain uses temporary price reductions, which last about four weeks to offer the lowest prices on the items in the market.
"On the isotonics we buy in pallet 'modules' quantities. All throughout the summer we buy pallet modules from Gatorade, which reduces labor and cost of handling," he said, noting that Cub's Gatorade sales are up approximately 20% over last year.
"With Gatorade, we start earlier than anybody in the market. We start in March and put it on our wall of values and leave it up longer than anybody else, through October. Down here the weather is warm and the category is definitely growing," he said.
At Ingles Markets, isotonic sales also have been sizzling. According to Bob Truex, assistant manager of the chain's Suwanee, Ga., location, sales were so brisk that a large floor display that was put up at the start of the season in April had to be dismantled in early June because it was depleted.
"Our store is located right across from where the Atlanta Falcons play, and we're in the middle of a couple of parks. Between team drinks and the hot summer we sell a lot of it," Truex said.
Rich Flaherty, vice president of sales and merchandising for A&P's Southeast Group here, said his chain is stepping up the advertising of the isotonic drinks this summer.
"With PowerAde being an Olympic sponsor, we will be advertising and promoting it throughout the Olympic time frame. With Gatorade being a strong player in the market also, they will get similar types of promotion activities throughout the summer," he said.
"There is no question the isotonics are gaining in sales each year," Flaherty added. "For the U.S., sales are up somewhere around 15% and it is running at a much faster rate than the national average in Atlanta. We're seeing that on both Gatorade and PowerAde."
In Atlanta private label is also a factor. Harris Teeter stocks the proprietary President's Choice Power Quencher in lemon/lime, orange and fruit punch varieties, priced at two 64-ounce bottles for $3.00.
Market leader Kroger also has its own private-label Sports Shot brand, in orange, grape, lemon/lime and fruit punch flavors, which was on sale for 99 cents a 64-ounce bottle during SN's visit last month.
"Kroger advertises its private label pretty heavily. Sports Shot has been advertised on Kroger's in-store radio, and is a good- tasting product at a great price," a local observer told SN. Kroger officials declined to comment about its sports drinks departments.
The observer told SN PowerAde has also been advertised through in-store radio, in print and on in-store billboards and floor boards.
Kroger heavily merchandises the category, using end caps to merchandise PowerAde, and sharp prices. In mid-June, PowerAde was featured at two half-gallon bottles for $3.00, a savings of 35 cents, while Gatorade was the same price, a savings of 59 cents. All Sport was $1.59 a half gallon, a $1.10 savings, compared to Sports Shot's 99 cents.
Despite the influx of private label, the national brands still reign supreme over the category.
Nationwide, isotonic beverages had supermarket sales of $492.2 million, an increase of 12% over the previous year for the 52-week period ended May 19, 1996, according to Information Resources, Chicago. Gatorade is the market leader by far, with sales of $392.9 million, and a market share of 79.8%. Second place is held by All Sport from Pepsi-Cola, with sales of $39.1 million, and a market share of 7.9%, closely followed by Coca-Cola's PowerAde, with sales of $35.3 million, and a market share of 7.2%. Atlanta-specific figures were not available.
The Gatorade Co., a division of Quaker Beverages North America, Chicago, this year introduced Cherry Rush and Strawberry Kiwi flavors in 20-ounce sport bottles.
"We've been very aggressive in cold placement in grocery. We are the market leader both in Atlanta and nationally, and plan on being that way for a long time," said Mark Noonan, director of integrated marketing.
All Sport, from Somers, N.Y.-based Pepsi-Cola Co., has reformulated its products to include B vitamins and has added Blue Ice and Cherry Slam flavors to its mix, according to John Talbot, All Sport director of marketing.
But in Atlanta all eyes are focused on PowerAde, which is an official Olympic sponsor, giving it the exclusive marketing rights to all metro Olympic properties including Olympic Village, Olympic Stadium and various concession stands downtown. Residents and visitors will see the PowerAde brand and logo on everything from billboards to bus wraps.
"We have placed 50 in-line 4-foot coolers in the middle of the isotonic section in leading supermarkets, including many area Kroger stores," said John A. "Gus" Eurton Jr., brand development manager of new beverages at Coca-Cola USA Operations.
"We have had them in from May and they are doing gangbusters," he said.
PowerAde has introduced a new Tidal Burst sour fruits flavor, along with a proprietary 24-ounce sport bottle.
Thomas J. Reddin, director of consumer marketing, noncarbonated beverages at Coca-Cola USA Operations, described PowerAde as the sports drink for serious athletes.
"Our 24-ounce sports bottle will be on the field of play at the Olympics, which is huge. PowerAde also has a close working relationship with A&P, having a permanent full endcap display called an Oasis Rack. In addition, it partnered with A&P for the dedication of the Olympic Stadium.
"For the dedication, we had a promotion in the stores where the customer was able to buy discount tickets if they purchased specific Coca-Cola or PowerAde products. It went over very well," A&P's Flaherty said.
McKenzie of Harris Teeter said his chain was developing special water and isotonic displays and is expecting a boost in sales of these products because of the proximity of its three Georgia stores to Olympic events. A marathon will pass by the Atlanta Brookhaven store, biking and swimming are near the Atlanta Dunwoody store and a soccer tournament is being held near the Athens store.
Harris Teeter features 64 linear feet of ready-to-drink and powdered sports drinks in a 12-foot section. In addition to Gatorade, PowerAde and All Sport, the chain also stocks Twin Labs Hydra Fuel at $1.29 a bottle. The chain cross-merchandises its sports drinks with high-energy nutrition bars, such as Power Bars, Torque Bars and Sports Pep Thunder Bar, with 12 facings placed on the next-to-top shelf, just under the Gatorade instant and six-pack cans.
"The cross merchandising is doing real well. We just took that strategy about a year ago in certain markets, and we have seen increased movement on the bars," he said. "They were originally sold in the end of the natural foods section, but we thought it tied in a lot better with sports drinks.We also wanted to create more of a sports nutrition center." Cub Foods finds massive in-store displays and "cheapest in town" prices work best at moving sports drinks.
