PepsiCo is launching a sweeping overhaul of Gatorade to combat an explosion of competition that has wobbled the brand’s dominance in the hydration market it created over 60 years ago. The iconic sports drink, which still commands 60% of the category, has lost roughly 3% market share since 2021 as around 150 new brands have entered the space since 2020, including influencer backed ventures from Kylie Jenner and Lionel Messi, plus fast growing upstarts like Liquid I.V. and Electrolit. A combination that has added new flare to the competitive hydration market.
The revamp includes removing synthetic colors and dyes from top selling flavors (fruit punch, lemon lime, and orange), expanding Gatorade and Propel’s flavored powder business, and introducing “Gatorlyte Longer Lasting”, a first of its kind drink designed for people on long flights or extended workdays who avoid liquids to minimize bathroom breaks. The new formula uses plant based glycerin to help the body retain water longer than standard sports drinks. PepsiCo is also cutting prices on multipacks to stay competitive, following a similar 15% reduction at its Frito Lay snack unit after pressure from activist investor Elliott Management.
The hydration market is forecast to double from $40 billion to $80 billion by 2032, driven by post pandemic wellness trends, enhanced by social media platforms like Instagram and TikTok. However, Gatorade’s growth is being chipped away by products that “feel more portable, more personalized, more functional or more natural,” according to Euromonitor analyst Howard Telford. The brand that invented the category now faces a fundamental challenge: convincing everyday consumers, not just athletes, that Gatorade is their best hydration choice in an increasingly crowded market.
