Ironically, the sports drink category wasn’t very competitive for a while. That has all changed thanks to increased competition, a recent spate of innovation and a new player on the field for Gatorade. Former Nike exec and Dallas Cowboys linebacker Kalen Thornton shares his vision for Gatorade’s brand marketing as it looks to the future of sport.
Gatorade has dominated the sports drink category since its inception in 1965. For much of its run, the PepsiCo-owned beverage has leveraged its powerful heritage and high-profile partnerships with some of the world’s top athletes. And try as they might, Coca-Cola could never really find a way to compete via Powerade or any of its other products.
It got to the point where, only a few years ago, PepsiCo barely invested in the product. But that’s all changed now that aggressive upstarts led by Bodyarmor have stepped into the arena. Bodyarmor is in the final stages of being purchased by Coke – to, finally, give Gatorade a formidable competitor. Then there’s BioSteel, NFL legend Jerry Rice’s G.O.A.T. Fuel and many others. New products touting no calories, proteins, caffeine and more have ignited a once-sleepy category. Along the way they woke up the giant.
Gatorade has responded by beefing up its own product pipeline with Gatorade Zero (no calories), Gatorlyte (less sugar), G Organic, G Juiced (juice-based), Bolt 24 (caffeine), Gatorade Recover (protein) and even its first non-beverage product: the Gx system. It includes a sweat patch that helps you monitor your body via an accompanying app.
The brand also has a new campaign, ‘Greatness Starts with G’, which debuted in late May, and new chief marketer Kalen Thornton joined the brand five months ago after 10 years at Nike. Thornton says the groundwork has been laid for taking Gatorade “from a sports fuel company to a brand that truly fuels sport”.
The brand is about to become more inclusive by embracing all forms for athletes from dance to pickleball; more youthful by looking to court gen Z and alpha on new platforms like Discord; and more innovative as it looks to “create a 360° relationship” with athletes, Thornton says. “We’re just trying to serve a broader aperture of athletes.”
Evolving the playbook to include all athletes
As Thornton looks at the back half of this year and into 2022, he is viewing the brand through a different lens. While Gatorade will still embrace its roots as the drink of choice for high performers, it is now thinking about the people who make up “what is now an ever-changing and evolving definition of sport,” says Thornton. “There’s a proliferation of more activities that are now defined as sport. There are more people who want to participate, so we’ve got to empower their voices. That, in turn, requires more innovation and connection with youth and the next generation.”
The “evolved playbook” for Gatorade means looking beyond traditional sports to activities where “people are happy, moving and going out there and being the best version of yourself,” says Thornton.
Reaching a wider range of athletes calls for many new products, which are now in the pipeline. “There are tons of solutions we are exploring,” says Thornton. This includes launching more products that aren’t “just what we put in the bottle”, such as the Gx Sweat Patch.
That’s not to say the brand is moving away from its support of major sports leagues like the National Football League – although Thornton promises new narratives. “One of the first people who called me was Coach [Bill] Parcells. He was my coach when I was on the Cowboys and he let me know he was the first person to ever get [a cooler of Gatorade poured on him by the players]. That’s one tease I’ll give. There’s some interesting storytelling around what it means to win a championship and have a relationship with the NFL.”
The competition is getting thirsty for more
After decades of the status quo, the sports drink sector has become one of the most interesting. Its dollar share was up 7.3% in Q1 and volume share was up 2%. The category is expected to have grown even more in Q2 as more people left their homes and headed to convenience stores and ballparks, according to Duane Stanford, editor of Beverage Digest.
In fact Gatorade, which owns 69.3% of the category at retail, would likely have sold more if it wasn’t experiencing supply chain issues as a result of Covid, says Stanford.
Still, there’s a challenger brand coming up the ranks that has served as a spark. “The whole segment has started growing again. At Bodyarmor, [chief executive] Mike Repole likes to make the case that his brand lent a burst of energy and creativity that’s worked to lift all boats, rather than just grabbing share from the incumbents,” says Gerry Khermouch, editor, Beverage Business Insights.
Coke owns a minority stake in Bodyarmor and is expected to make that a majority ownership before year’s end. This could allow the beverage giant to “sandwich” Gatorade by offering Bodyarmor at a premium price and Coke-owned Powerade at a discount price, says Stanford.
Then there is a flock of other contenders from Ready Nutrition (with NBA champion Giannis Antetokounmpo an investor) to Hoist “trying to ride in the wake of Body Armor,” says Khermouch. “Not least, there’s incredible investor interest and DTC sales for the powdered brands like Hydrant after some conspicuous exits like Liquid IV.”
Thornton says that as an athlete he welcomes the fact the competition won’t be listening to their footsteps. Instead, “we will listen to the voices of athletes and use that as a catalyst to come up with solutions.”
This includes leveraging its Women’s Advisory Board, which was formed earlier this year to elevate women’s sports. It also include some advice from Thornton’s own children. “I’m trying to understand Discord. My kids are on it ... There are more and more platforms out there where we need to be present, serve athletes and move the conversation forward.”