For the first time since 2012, domestic Gatorade (PEP) sales have slipped; -.5% to $5.9 billion in fiscal 2017. Health conscious consumes opting for alternatives to a sugary sports-drink and increased competition from upstarts like BodyArmor (no artificial sweeteners, coloring), have cut into Gatorade sales. Despite the negative news, the company still owns 75% of the U.S. market-share (Powerade has 18%, BodyArmor has 3%). Powerade sales remained flat, while BodyArmor doubled sales over the same period.
Howie Long-Short: Back in October, PepsiCo Inc. (PEP) CEO Indra Nooyi indicated the sales decline was temporary, attributing it to a down summer and slowing convenience store sales; but, trends showing consumers leaning towards healthier alternatives indicates PEP has a larger fundamental problem on its hands. Particularly, when you consider that Gatorade makes up +/- 20% of the company’s North American sales; but, Gatorade Organic (no artificial sweeteners, coloring) is responsible for just $20 million (out of $7 billion, .003%) in revenue since the products’ ’16 launch. The product simply hasn’t caught on.
Fan Marino: Gatorade is title sponsor of the NBA’s official minor league basketball organization. The league has been actively seeking distribution, signing noteworthy (these are not your father’s NBA on NBC broadcasts) deals with both Twitch and Eleven Sports. JWS recently sat down with porn star turned Twitch G-League color commentator Mia Khalifa, to discuss co-streaming and the future of sports broadcasting.
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