How PepsiCo Managed To Breathe New Life Into The Gatorade Brand

PepsiCo investors got a pleasant surprise this week when the soft drink and snack company responsible for Pepsi and Mountain Dew, along with Frito Lay snacks and Quaker Oats products (per PepsiCo), announced a 16% increase in revenue during the third quarter, which ended in September. According to Food Business News, the growth amounted to a net income increase of 21% over the same period last year, despite the food industry's struggle with inflation. An area which has done particularly well is PepsiCo Beverages, which, along with soda, includes brands like Bubbly, Aquafina, and Gatorade, experienced a net revenue increase of 3.6%.

In an October 12 earnings call, PepsiCo CEO Ramon Laguarta credited the drastic beverage sector growth to Gatorade and a successful effort by the brand to reinvigorate sales. "We have invested a lot for the last couple of years," he told investors of Gatorade. "Our innovation is working. Our brand building is working. Our commercial execution is working, and we gained meaningful share in the quarter, which makes us very happy, obviously, given the efforts the team has put in that brand."

So how has Gatorade been boosted? According to Food Business News, the brand, ubiquitous in the sports world for being poured over coaches and players heads after an important victory, has recently expanded its product line to include Gatorade Zero, a zero-sugar version of the drink equivalent to diet soda, Gatorlyte, a lower-sugar variety made without artificial colors or flavoring, and G Fit, a sugar-free, vitamin-high formulation without artificial flavors or added colors. These additions are believed to have drawn more people, who may be looking to the brand that consistently is ranked as the category's consumer favorite for a healthier sports drink.

The innovations are not set to stop any time soon either. In September, PepsiCo announced they will be launching a Gatorade energy drink in February 2023 that is aimed to compete with a series of healthier, sugar-free energy drinks now making a splash in the market. According to CNBC, the drink will be called Fast Twitch and will include caffeine and electrolytes without the inclusion of sugar. The brand also recently announced a collaboration with smart packaging brand impacX to create a Gatorade-branded smart bottle and app that will be able to track a user's hydration and sports performance data. It is currently available on Gatorade's website, though it is too soon to tell how it may continue to improve the popularity and sales of the brand.