Clash of the Titans

Posted By elissa on Jul 2, 2010 | 2 comments

Pepsi – the maker of Gatorade – is still the king of the sports drink market hill – Coca Cola’s Powerade hasn’t even come close to challenging Gatorade’s dominance.  But GlaxoSmithKline apparently believes it can succeed where Coke has failed.

GlaxoSmithKline is taking on the might of Pepsi’s Gatorade in the US sport beverages market by announcing its intention to launch Lucozade as part of a strategy to take the brand global.

Lucozade sells in excess of $550m – about 90 percent of which is in the UK with smaller returns in Ireland and Hong Kong, but sales have been stagnating in these markets.

…The US non-carbonated, sports beverage space is dominated by Pepsi’s Gatorade, which controls about 75 percent of the market despite the best efforts of Coca-Cola’s Powerade, which in 20 years has managed to capture a share of only about 20 percent.

Beverage market analyst and consultant, Jim Tonkin, of Arizona-based Healthy Brand Builders, said it would take an enormous effort for any player to leverage serious market share from Pepsi’s Gatorade lines, as Coke’s Powerade has found out.

“The thing is Pepsi have been very aggressive with Gatorade anyway – they have been spending big marketing dollars and they definitely won’t sit back and allow Lucozade to waltz onto the market,” Tonkin told NutraIngredients-USA. “Pepsi is a tough competitor. They will definitely make Glaxo earn whatever market share they are able to attain.”

“A lot of companies have tried to knock off the platform and failed. That said, Lucozade is a good product, Glaxo is huge and has the muscle to stick out a long term campaign. But will they have the patience? I see them having to invest 10s of millions of dollars to gain a few percentage points market share.”

I honestly can’t say that I care who “wins” this three-way clash of the (corporate) titans, alhough I expect consumers – especially the under 21 set – will be the ultimate losers. It’s not like the world needs more sugar-and-electrolyte drinks, especially since the majority of people who drink them are kids, who are already at risk for obesity/overweight.