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Vitaminwater's sports endorsers raise profile as brand moves in on its better-known rival.
The Atlanta Journal-Constitution
Published on: 05/27/08
Coca-Cola's Glaceau division appears to be moving in on the turf of PepsiCo's Gatorade, amassing an impressive list of athlete endorsements and running advertisements that take a swipe at the famous Gatorade victory splash.
In the heat of the National Basketball Association playoffs, Glaceau, maker of Vitaminwater, now has a roster with stars from each of the four remaining teams — San Antonio's Tony Parker, Los Angeles' Kobe Bryant, Detroit's Chauncey Billups and Boston's Ray Allen. Cleveland's LeBron James also appears in TV commercials running during the playoffs.
| In the heat of the National Basketball Association playoffs, Glaceau, maker of Vitaminwater, now has a roster with stars from each of the four remaining teams — including Los Angeles' Kobe Bryant. | ||
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The endorsements continue a relationship with sports that Vitaminwater has been building for years, said Rohan Oza, Glaceau's senior vice president of marketing. Shaquille O'Neal and David Ortiz were investors before the company was bought last year by Coca-Cola.
"All of the athletes we have are true fans of the brand and have been drinking it for years prior to partnering or investing with Vitaminwater," Oza said.
Vitaminwater continues to expand its presence outside of athletics. A new ad with "American Idol" and country star Carrie Underwood is expected to air soon.
Vitaminwater has a range of 15 beverages meant for different times and purposes, Oza said. A consumer doesn't have to be engaged in intense physical activity to benefit from the drinks, he said.
Vitaminwater, though, is engaged in a brewing fight with Gatorade over customers. It has an "Out with the old ... in with the new" campaign that shows football players dumping a cooler of Gatorade.
Vitaminwater also ran an advertisement in a recent issue of "ESPN The Magazine" pointing out that Vitaminwater has no lightning bolts, fluorescent drops of sweat, old school formula or sodium, all digs at Gatorade.
Pepsi has taken shots at Vitaminwater for having more calories than Propel, an enhanced water that carries the Gatorade logo. The Vitaminwater ads were prompted by consumers writing into Glaceau and expressing concern about attacks on the brand, Oza said. "When they [Vitaminwater consumers] saw that other brands were bashing us, they inspired this campaign."
Gatorade has no plans to directly counter the Vitaminwater ads, said Gatorade spokeswoman Jill Kinney. The brand is used to competition and feels confident in its product and lineup of athletes, she said.
Gatorade's NBA endorsers are led by Boston's Kevin Garnett and Seattle's Kevin Durant, the NBA Rookie of the Year. It also still has Michael Jordan on its side.
During the NBA playoffs, it will run Gatorade "League of Clutch" ads featuring Garnett. It also will run commercials for G2, a low-calorie version designed for off-field consumption, featuring athletes Dwayne Wade, Alonzo Mourning, Mia Hamm and Nomar Garciaparra.
In addition, Gatorade has exclusive deals with the NBA, National Football League, Major League Baseball and National Hockey League. (You likely won't see a victory splash with a cooler of Vitaminwater anytime soon.)
"Every time you see an athlete drinking Gatorade on the sidelines, that's a reminder that today's best athletes are drinking Gatorade and it's working for them," Kinney said. "Gatorade is really part of the sports equipment."
Gatorade is, by far, the leader in the U.S. sports drink segment. It accounted for 76.3 percent of take-home sales in sports drinks in 2007, according to Beverage Digest. Powerade, a Coke brand, was a distant second at 22.7 percent.
Glaceau, though, led the enhanced and flavored water category with 34.1 percent of that segment. Pepsi's Propel was second at 26.8 percent.
It's not clear whether enhanced waters are taking would-be sports drink consumers, said John Sicher, editor and publisher of Beverage Digest.
But the line between the two segments is increasingly being blurred, he said.
"In my view, one of the reasons that Coke bought Glaceau was to more effectively compete with Gatorade," Sicher said. "Gatorade is one of the most important brands in the U.S. beverage business, and Powerade alone was never able to dislodge Gatorade's roughly 80 [percent] share of the market."
In some outlets, Gatorade appears to be lowering its price to slow down Vitaminwater's growth, Sicher said. It's too early to tell if that's a broader strategy, he said.
Memorial Day to Labor Day, a key stretch for beverage consumption, could be a telling time for both sides, Sicher said. "Watching the competitive dynamics between Gatorade promotions and Glaceau this summer is going to be very interesting," he said.
Gatorade has become more strategic in trade spending — money used in promotions with stores — but has no plans to drop its price long term, Kinney said. Gatorade believes it has earned the ability to command a price premium, she said.
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