You are in:
Gatorade
Sports drinks in the UK have long been dominated by one brand, but now it has a serious competitor in the form of Gatorade. It's going to be very, very popular with runners, as it sits nicely in the stomach, it doesn't leave you feeling heavy after you've necked a bottle and, the manufacturers say, it supports and replenishes precisely what your body requires during and after exercise. It even tastes nice, which makes a refreshing change from the norm. Kevin answered our questions about the drink and their plans for the future...
SGB: Is Gatorade actually new to the UK market?
Kevin Scoles: It's been around in a number of formats for a while, and has sponsored Triathlon in the UK for many years. This year we introduced a new formulation specifically for the UK market. You'll notice on the bottle that it states 'No artificial colours or flavourings'; the formula still has the same functional efficacy but without those elements which we know UK consumers are moving away from.
SGB: What else is different about how Gatorade's done things this year?
KS: A big factor in the past was that it was not produced in this country, so as it was being shipped in there was a limit to how much success it could have, without causing ourselves an enormous amount of problems. For a long while it was made in Italy and shipped to the UK. With that model, one big order and the supply chain would be unable to cope.
We needed to move production to the UK to really make the effort required to make the product a success.
We have rigorous standards when it comes to the drink, obviously, as it has to be made up in exactly the right way or otherwise it doesn't have its efficacy; we couldn't take a chance on doing half a job with it. It's being produced in our factory at Leeds.
SGB: The brand is owned by PepsiCo - what does that mean for the brand? Presumably it brings an established supply chain, but surely supplying this to sports stores is outside that chain's experience. Is that a problem for you going forward?
KS: PepsiCo is obviously a big company that has influence across the world, but when it comes to distribution they have different franchisees and different bottling agreements around the world. In the UK, Britvic has been the bottler for Pepsi for many years and because of the great job we've done with that, they've entrusted Gatorade to us which is a huge endorsement when you understand that as the biggest selling sports drink in the world, Gatorade is one of the jewels in their crown,
48 per cent of all sports drinks sold in the world are Gatorade.
SGB: 48 per cent? That's an incredible number.
KS: It's a massive success story around the globe. We're a long way behind in trying to catch up with its success elsewhere, so there's plenty for us to be getting our teeth into.
SGB: Is finding stockists a problem with a new brand, especially a sports-related one?
KS: It is a problem because there are established people in the market already. As hard as we work trying to sell our wares to everybody, there's a defensive strategy put in place by other companies, as you'd expect. Lucozade Sport have been incumbent for quite a long time and they've had the market pretty much to themselves, with the exception of Powerade, which is Coca Cola's version of a sports drink. It's really a me-too brand. Lucozade Sport has put up a lot of barriers and done a lot of work to try and defend their place, as you'd imagine, like cutting prices, doing promotions and setting up long-term agreements with customers to try and fend us off. That's the world of commerce - it's all healthy competition. It helps us sharpen our pencils, get down to business and work harder to get that distribution.
SGB: There's a strong argument that having more strong brands available will grow the market, rather than dilute it. Greater choice leading to greater sales for two prominent brands, rather than one brand suffering...
KS: For a long time the sports drink market in the UK has been pretty static; only around 14 per cent of people who exercise on a regular basis are drinking sports drinks. Most of them are drinking other things, like water, juices or going in different directions entirely. What Gatorade's done is bring a whole load of people back into the category, buying and using sports drinks again. 42 per cent of the gain in sales we've had are people who have not been drinking the current offering, or what's already out on the market; they're new users of sports drinks.
SGB: For many people, sports drinks are related to an upset stomach, and they've had bad experiences with them.
KS: A small proportion of people do sometimes suffer from stomach cramps after drinking sports drinks in the same way which is often caused by people not mixing powdered sports drinks correctly or formulations which don't have an optimal mix of carbohydrate. As the most-researched and widely used sports drink in the world, Gatorade will do the job for the vast majority of athletes. This research means that Gatorade has exactly the right amount of minerals in it that your body needs to replace and exactly the right amount of salts, so you can still metabolise the sugar content of the drink. There's no more than you can take and no less than you need to be completely efficacious.
At the Gatorade Sports Science Institute in Chicago they have a sweat chamber which is used to analyse the performance of athletes as they're put through their paces. This data is studied and used to optimize the formula to ensure the product contains the right amount of minerals, salts and water to replenish what's leaving the body. Simple, but also very scientific.
SGB: It doesn't taste like a sports drink - or like we think of sports drinks.
KS: That's where the natural flavourings and natural colourings come in. Gatorade also doesn't contain any artificial sweetener so it doesn't suffer from the poor aftertaste that other drinks can have - It is a lot more 'sessionable'. When you're asking what you need for a sports drink and at what level of exercise does one become valid to use, you could say that for half an hour's exercise, you don't need a sports drink. It depends on how much you sweat though; for a heavy sweater, half an hour's running could easily mean a sports drink is a good idea to replace lost minerals and salts.
SGB: You're coming into a market dominated by one competitor - how do you break into that market? What steps are you taking?
KS: We sponsor something like 30 races, including the London Triathlon - the biggest in the world - which all helps to raise awareness. We're spending a lot of time trying to influence the influencers, so it's about getting hold of the people that organise the training sessions - the dieticians, the coaches, the fitness experts, and really seeding the brand with those kinds of people. Many British sports professionals already know Gatorade well from experience in other countries so we've been lucky in that we're pushing on a half open door.
Now we're spreading our wings a little wider and we've just finalised a huge partnership with the Guinness Premiership. Also, at the recent Leisure Industry Week we were on pretty much every stand where people could try out equipment. We were all over the place.
It's a many-pronged attack; what we haven't tried to do is come in and spend a lot of money on a TV advertising campaign, because we didn't think it was the right way to do it. There's a lot of science behind what we're doing, and we want to get the message across that it's the right thing for people to drink in an active occasion. Once people understand that it's a piece of sporting equipment for all sports people, then the next step is that they try it.
SGB: What's in store then in a marketing sense? What are your plans?
KS: For the interim period it will be more of the same. We do have a new flavour coming to join the lemon and the orange flavours, which will be launched early next year, which we're very excited about. Then we'll probably plateau at the level we've reached before pushing on further, making sure we're comfortable where we are before moving on.
The limit of our ambition is only the limit of our capability; if Gatorade doesn't reach the same kind of distribution as it does in other countries, we've really got to look at ourselves because there's really no reason why it shouldn't. Once people get hold of it and taste it, and use it in a sporting occasion we know they'll see the benefit themselves so hopefully it will become a self-fulfilling prophecy for us.
SGB: What are you doing in terms of POS and retail merchandise for independents?
KS: We have lots of different customers with different needs; it depends how they want to sell the equipment like posters, dump bins, banners, that kind of thing as well as towels and water bottles to encourage people to buy. It depends how the retailer wants to display it on their shelves, really.
