ACTIVE ADAPTATION: SPORTS DRINK CATEGORY EVOLVES TO MEET NEW CONSUMERS

Gatorade’s familiar orange lightning bolt has fended off strikes from the Coca-Cola Company’s tag team of sports drinks, Powerade and Body Armor.

Now, however, the attacks are less direct.

Pepsi’s signature sports drink is seeing competition from hydration and energy brands that are nibbling at the edges of a blurred border between functional and exercise-oriented beverages. A rising interest by fitness-focused and activelifestyle consumers not drawn to brands solely for their professional athlete endorsements is providing opportunity for upstart electrolyte-infused recovery drinks focusing on weekend warriors and practitioners of alternative sports.

Despite acquiring BodyArmor in 2021, Coca-Cola’s tandem of sports drink brands have struggled to put significant pressure on Gatorade. In Coca-Cola’s Q1 earnings call, chairman and CEO James Quincey said that the company was “focused on stabilizing the portfolio” with new innovation.

That innovation turned out to be BodyArmor Flash I.V., launched in May, which was simply a more intense, “rapid rehydration” product along the lines of Electrolit and Biolyte. That the brand moved to embrace rapid rehydration – at a time when Gatorade has its own Gatorlyte in the same space – says more about where the category is going than BodyArmor itself, however.

Gatorade still comfortably maintains its role as category leader. Pepsi’s sports drink sales were $6.6 billion, growing 10.1% against -4.3% volume and pricing up +14.4% in the last 52-weeks, according to NielsenIQ data.

When looking at a 4-year stack of scanner data, sports drink sales for BodyArmor (+131%) and Coca-Cola’s portfolio overall(46.3%) both outpaced PepsiCo (+43.8%), but off a much smaller revenue base.

More recently, BodyArmor sales were down -10.5% on -16% volume with pricing up 5.5% in the last 52-weeks ending July 15, according to NielsenIQ data by Goldman Sachs Equity research.

PepsiCo chairman and CEO Ramon Laguarta remained optimistic about Gatorade holding its place at the top of the heap in the company’s most recent Q2 earnings report.

“We feel good about the sports category,” Laguarta said in the question-andanswer section. “In general, we think the category continues to have healthy metrics in terms of penetration and usage and everything else.”

But Gatorade has undergone its own line extensions as it adapts to an amorphous sports drink category. Along with Gatorlyte, launched in 2021, the brand released a caffeinated drink Fast Twitch this year, in part, to counter the rapid rise of Congo Brands’ newcomer PRIME, which is drawing attention and sales in both the energy and sports drink categories.

PRIME’s growth has been rapid and impactful – it has surpassed Electrolit in sports drink sales while pressuring the traditional category leaders. According to Circana data in the 52-weeks ending June 18, with over $377 million in sales,

PRIME was up 1676% this year, while Electrolit saw 20.9% growth on $370 million in sales.

Following the example of PRIME, other brands, like Coco5 and Barcode, are also trying to change up the marketing game, offering basketball stars the potential upside of equity in their up-and-coming brands rather than a high-figure endorsement deal with a category leader. Both brands have investments from a number of high-profi le NBA players and personalities, with Barcode landing arguably the biggest prospect in the last 20 years, French phenom Victor Wembanyama, to a five-year exclusive partnership that includes an equity stake in the company. While PRIME reaches consumers who aren’t necessarily the targets of the typical sports drink companies, and Coco5 and Barcode try to grab sports stars early on in an atypical manner, elsewhere a cohort of rapid rehydration brands is stretching the meaning of the category itself.

Gym Walls Are Closing In From Multiple Directions

Sports drinks are starting to be infiltrated by emerging marketing that focuses on hydration, not simply point-of-sweat, as well. Brands traditionally positioned in the hydration space like Hoist, Liquid I.V., Nuun or Hydrant are all making a play for consumers looking to refuel, said Caleb Bryant, associate director of Food & Drink Reports at

“These aren’t really sports drinks in a traditional sense, but they’re very much kind of playing into similar consumption occasions as traditional sports drinks,” he said.

Hoist, a product originally started by college students in Ohio, has gone through a number of iterations, repositioning itself within the hydra- tion category as it has slowly inched closer towards the fitness community. Along with being the official partner of the U.S. Department of Defense, it has aligned itself with power-lifters like Katie Jones to put the brand inside gym walls. The brand recently noted that it has found good traction among high school and college-level athletes as well.

According to Circana data, Hoist sales were nearly $3.5 million, up 33% compared to last year.

Powder and tablet brands are tapping into a consumer desire for convenience, hydration and sustainability, Bryant said. Unilever-owned Liquid I.V. sits atop the category with $293 million in sales showing a 66.4% increase yearover-year, according to Circana data. As always, Gatorade is responding to these trends with the release of healthconscious, clean-label products like G Fit and the expansion into more powdered or Nuun-like tablet formats. Per Circana sales numbers, Propel (+ 53.1%) and Gatorade (+25%) are vying for that top seat by continuing to innovate.

Bryant’s colleague at Mintel, Adriana Chychula (also a registered dietician), has been interested in how hydration brands are using messaging to move further into the sports drink category.

“The language is more about that rapid hydration and it’s being branded as this novel technology. When in reality that’s exactly how sports drinks have always functioned – which is based on those ratios of fluid to electrolytes,” Chychula said.

The hydration category has grown over 61% in the last 52 weeks ending May 21 and over 150% in between May 2021 and May 2022, according to SPINS data.

Hydration brands are using the vague understanding that everyone needs more energy and more replenishment of fluids throughout the day to sell products into a category that has largely been dominated by professional athletes or people engaging in heavy exercise, Chychula said.

Replenishment of sodium and potassium is not the only message these days, but a “tacking on of functionality” is resonating with consumers, Chychula said, in many ways breeding a new subcategory of casual sports beverages.

Activity Beverages For The Pickleball Player In All Of Us

New athletic beverages brands are attempting to reach a different consumer base by capitalizing on new sports trends, as well.

Pickleball is one example of a hobby among casual athletes that has burst into the spotlight. Major League Pickleball’s significant interest from professional athletes, investors, and food and beverage brands has shown there is money to be made by attaching onto a casual sports activity.

Everything from premium water brands like Richard’s Rainwater to coffee company BLQK and yerba mate maker CLEAN Cause are just some of the beverage brands sponsoring teams and events on the court. In May, ROAR Organic became the Official Hydration Partner of the Professional Pickleball Association.

Pickleball fever is also being used in marketing materials of many emerging sport drink brands. The homepage of Austin, Texas-based Sap’s shows people sweating it out with paddleboards inhand on the pickle court.

Positioning itself as “a drink for sports and everything else,” Sap’s is tapping into an opportunity in the market for rehydration drinks for non-athletes.

Launched by former BIOLYTE executive Jordan Wilson, the brand has leaned into a retro-look and a marketing strategy featuring people biking, hiking and enjoying watersports.

Like many emerging sports and hydration beverages, Sap’s has also positioned itself as an alternative to traditional category leaders with a clean ingredient list, zero sugar and functional benefits. The canned beverage is made with coconut water powder and fortified with ginger root, shiitake mushrooms, ginseng root, and a number of vitamins and minerals formulated to detoxify, recover and hydrate the body.

Caleb Bryant calls the strategy a “casualization” of the sports drink category.

Brands like Sap’s are “recognizing that most folks consuming these beverages are doing it in just normal consumption occasions,” Bryant said. “They might not be playing basketball. It’s a bit more general health and wellness focused.”

Sustainable Packaging Takes Center Court

And like Sap’s, many brands in this new generation are different for another major reason: aluminum packaging.

Soon-to-be-launched Los Angelesbased brand Local Weather has spent the last two-and-a-half years formulating the perfect amalgam of elements to position itself as a nootropic, sustainable sports drink brand for the casual athlete.

This September, Local Weather is planning to launch a coconut water-based beverage packed with nootropics like Ltyrosine and L-theanine for focus and ashwagandha for stress relief. Along with its functional benefits, the brand is banking on its packaging in 16 oz. all-aluminum, resealable bottles that retail for $2.49 as a pillar of its marketing message. The packaging choice positions the brand as the only sports drink brand offered in an aluminum capped bottle making the brand “infinitely recyclable and highly sustainable,” co-founder Jon Alagem said.

Although not resealable, Courtside is also using its aluminum packaging as a selling point to a new generation of sports drinkers.

“Plastic was never really thought of in our minds,” co-founder Ariel Irby said. “I think a lot of it just came from our own insights and never really wanting to purchase something plastic. That’s just something that’s growing in the younger demographic and [we’re] trying to produce a product for that younger demographic.”

Environmental sustainability fits with the consumers the brand is targeting.

Co-founder Austin Bezinger describes them as “socially athletic or casually-active individuals.” The brand has kept its focus around connecting with the community in the Los Angeles area – where Courtside is based – by sponsoring hiking clubs and hosting surfing and skateboarding events.

“We’re comfortably living in the leisure space,” Benzinger said.

The company is about to do its first big production run in anticipation of growing its distribution pragmatically through small-to-medium sized independent natural food stores; mostly focused on young, urban areas like Nashville, Seattle and Portland, Oregon.

Irby and Benzinger noted that one of the biggest hurdles that Courtside sees is communicating to the public how this new subset fits into the evolving understanding of sports drinks.

“If we call it activity, or if we call it hydration, we can call it an activity/hydration beverage,” Benzinger said. “If we can acknowledge that it is an independent category…we can communicate to retailers effectively the type of beverage that we’re selling.”

Sports Drinks

BYLT Sports Drinks is launching in The Vitamin Shoppe online on August 1 and will subsequently roll out to the company’s brick-andmortar stores. Additionally, BYLT is slated to drop a yet-to-be-announced new flavor as part of the partnership.

Wellness company Lifted Blends recently unveiled its new sports drink that features hemp CBD with zero THC, Branch Chain Amino Acids (BCAAs) and electrolytes. Available in three flavors – Strawberry Pineapple, Lemonade and Blue Razz – each 12 oz. can contains 25mg of hemp CBD.

Ready, a sports nutrition company, announced the debut of a light version of its Ready Sports Drink. Ready Light Sports Drink features the same essential elements to replenish fluid and electrolytes and boost energy, such as superfruits and B vitamins, but with only 20 calories. The new product will be available initially in 16.9 oz. bottles in Classic Lemonade, Mango Lemonade, Strawberry Lemonade and Watermelon Lemonade flavors.

The Alkaline Water Company Inc. has begun initial sales of its Alkaline88 Sports drink in brick-and-mortar grocery stores. After a successful e-commerce launch earlier this year, all four flavors of Alkaline88 Sport – Jolly Watermelon, Fruit Punch, Very Berry and Limón Citrus – are now available in over 250 Harris Teeter stores across seven South Atlantic states and Washington, D.C.

AriZona Beverages announced an exclusive partnership with Marvel Entertainment to develop a functional drink called Super LXR Hero Hydration, marking the iced tea maker’s first true leap into the sports drink category. The new hydration beverage is currently available online in a 16 oz. bottle format that is custom designed for the collaboration. Twelve-packs of each flavor are listed at $24.99 and, initially, the new product line will be targeting c-stores through DSD and direct channels as well as ecommerce, including with GoPuff in the Northeast.

Complete hydration beverage brand ROAR Organic announced an exciting new partnership with the leading organization behind the fastest-growing sport in the U.S., the Carvana PPA Tour. Known for providing a refreshing blend of vitamins, antioxidants and electro- lytes, ROAR has exclusively been named the Official Hydration Partner of the PPA Tour for the 2023 pickleball season.

Barcode is excited to announce its rapid expansion throughout the State of Texas, with its products now available in Albertsons, Randalls, and Tom Thumb stores. This expansion is a significant milestone for the brand, further solidifying its presence in the thriving Texas market after announcing their partnership with this year’s NBA draft first pick Victor Wembanyama.

Hermosa Beach, California-based Adapt SuperWater expanded its lineup of enhanced hydration beverages with the launch of Sleep (Tart Cherry Kiwi) and Focus (Watermelon, Beet & Lime) flavors. Each 14 oz. bottle contains 25mg of hemp extract. Additionally, the brand’s new On-The-Go single-serve drink mixes are currently available for pre-order online. Mirroring the brand’s RTD products, the powdered mixes contain 25mg of hemp, providing athletes and nutritionists the opportunity to bring Adapt on the road.

DEFY, a performance beverage company, has signed an agreement with John Lenore & Co. to distribute its Boost+Immunity performance drinks and ionized, alkaline, pH 9.5+ water throughout San Diego County. DEFY Boost+Immunity features 80mg of Clean Caffeine, plus amino acids and an immunity blend.

Cure Hydration has raised $5.6 million in a Series A funding round led by Lerer Hippeau. The funding arrived as the New York-based functional drink mix brand has expanded its retail presence to over 15,000 doors nationwide. According to the company, Cure has grown an average of 230% annually since its launch and its retail expansion marks a rapid rise in footprint.

BIOLYTE, which touts itself as the first hydration beverage to offer the same amount of electrolytes as an IV bag, continues to build its presence nationwide with its expansion into CVS HealthHUB locations across the country. The clinical hydration drink, offered in five flavors – citrus, berry, melon, tropical and punch – is now stocked on the shelves of over 850 HealthHUB stores plus available for purchase at CVS. com for in-store pickup in select markets, marking the fifth major retail expansion for the Atlanta-based beverage in the last six months.