Filed under: Industry, Consumer experience, Competitive strategy, PepsiCo (PEP)

PepsiCo’s (NYSE: PEP) Gatorade brand has been struggling (WSJ subscription required) of late with competition from alternatives including Coca Cola’s (NYSE: KO) Vitamin Water, a lower calorie, perhaps more-nutritious beverage. With the added pressure of aggressive pricing from Powerade, sales of Gatorade were down 2% in the last quarter, a sharp drop from the 29% increase in the prior year’s quarter.

While PepsiCo expects Gatorade to rebound somewhat, its best days are probably behind it. People are realizing they just don’t need that many calories in a drink, and Vitamin Water tastes just as good anyway.

The future of the Gatorade brand may very well rest squarely on the shoulders of G2, the company’s soon-to-be launched lower-calorie alternative sports drink. Given the strength of the Gatorade brand, I like the company’s chances with G2, and Coke may need to start worrying.

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This entry was posted on Sunday, October 7th, 2007 at 11:51 pm and is filed under Stocks Money News. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.