Sports Authority: Sports Drinks Rebound

With a level of intensity like that of the athletes it targets, Gatorade is getting disciplined about distribution.

Its refined push surrounds the launch of G Series Fit, a three-part line targeting “passionate exercisers” ages 18-24, who hit the gym four or more times per week.

Designed for pre-, during and post-workout consumption, Fit includes energy bites for before exercise; a 20-calorie drink for workout hydration; and a 120-calorie restorative protein smoothie.

If you don't merchandise G Series Fit, it's likely that you're not located near enough to what Gatorade coins the “point of sweat.” Gatorade's controlled approach involves sampling in gyms and education in the places fitness consumers stop before heading there.

“We've been very nuanced about where the product is going and very diligent around making sure that we're aligning it with where the consumer is shopping,” Andrea Fairchild, vice president of brand marketing for Gatorade, told SN.

“You won't find Fit everywhere right now and you may not be able to find it everywhere over the next two to three years because we have to ensure that consumers understand what the product is and that it's specifically made for them.”

Much of Gatorade's effort centers on immediate consumption outlets like drug stores, and Walgreens in particular. But Fit can be found in Kroger and Safeway locations near fitness centers.

Last spring Deerfield, Ill.-based Walgreens accommodated the Fit launch with products in its cold cases and on endcaps. Some featured educational videos about product use and benefits, Fairchild said.

Shoppers learn to eat energy bites up to two hours before exercise to give muscles the nutrients they need to get the most out of a workout, and that when consumed 30 to 60 minutes after activity, the smoothie restores muscles.

“We're trying to ensure that the products are grouped together and that we're telling a very cohesive story as to what each is for,” explained Fairchild.

Rather than package the products as a trio, Gatorade promotes trial of all three with coupons and access to exclusive content from Gatorade's G Fit trainers.

In places where fitness shoppers are used to grabbing a single sports drink on their way to the gym, Gatorade is making the case for tripling their basket size.

“We're seeing a trend of products being bought as we intended, as part of a system to ensure you're maximizing your workout,” Fairchild said.

The same is not true of Gatorade's G Series, a more widely distributed line launched last year and targeted to competitive high school athletes, she explained.

Like Fit, G Series is made up of before, during and after parts, but since conventional Gatorade comprises one-third of the line, that product sells better than the others.

“Gatorade has been in the market for such a long time,” Fairchild acknowledged.

Shaping Up

Gatorade's innovations, along with the wildly successful Powerade Ion4, which brought in the most revenue of any new food or beverage in 2010, are breathing new life into the previously sidelined category.

Led by Gatorade Perform (the workout drink in the G Series targeted to teens), volume sales of non-aseptic sports drinks jumped 12.5% in the food channel during the 52 weeks ending Oct. 2, according to SymphonyIRI Group.

The spike is partly attributed to heavy merchandising with 62% of volume sold on feature, as part of a display or at a reduced price, according to Sue Viamari, editor of SymphonyIRI's Times & Trends.

At United Supermarkets, Lubbock, Texas, sports drink sales have skyrocketed 25%, according to category business manager Mark Stewart.

“Some was certainly due to the long hot summer in our sales area, and some was the result of aggressive promotions offered by our partners,” he said.

Also impacting sales is a sharper focus on core consumers: those who drink isotonic beverages for their intended purpose. The strategy is helping separate sports drinks from those associated with casual refreshment.

In 2008 and 2009, sports drinks experienced steep declines as emerging categories like enhanced waters siphoned sales from isotonic drinks, explained Sarah Theodore, global drinks analyst for Mintel Food and Drink.

“Enhanced waters took off as an alternative to sports drinks since some saw them as being less caloric and therefore healthier,” she said. “They also had a broader appeal to consumers since they weren't necessarily targeted at athletes, but active consumers in general.”

During that time Gatorade changed its named to “G” and reformulated an extensive line of drinks. The changes left consumers confused and even some category managers scratching their heads.

“The brand tried to be too many things to too many people,” said Gary Hemphill, managing director of Beverage Marketing Corp.

But in the last three years sports drink manufacturers have redeemed themselves with 12 new formulas bringing in at least $7.5 million in first year revenue, according to SymphonyIRI.

Contributing to those dollars are the premiums attached to these highly specialized and research-backed drinks.

“In many instances, they are enticing consumers to ‘pay more to get more’ despite budgetary pressures,” Viamari said.

Sporting Role

When consumers were asked if they drink sports drinks, young adults most often said yes.

SOURCE: Mintel/Experian Simmons National Consumer Study/National Hispanic Consumer Study