PepsiCo feeling good about sports nutrition strategy

by Eric Schroeder
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PURCHASE, N.Y. — PepsiCo, Inc. feels “very good” about its sports nutrition strategy, Indra Nooyi, chairman and chief executive officer, told analysts as part of the company’s release of its fiscal 2013 first-quarter earnings on April 18.

Specifically, Ms. Nooyi said the company’s Gatorade brand had a good first quarter.

“In Gatorade, we are playing a sports nutrition game between Gatorade juice, Gatorade hydration and Gatorade recover,” Ms. Nooyi said. “As a system, that business is doing well. We are staying very true to our premium sports nutrition positioning. We continue to play the game that way. We are beginning to gain share in sports nutrition, even though we had low-price competition come in with really aggressive pricing.

“We held our ground and we are beginning to gain share. So, we feel very good about our sports nutrition strategy.”

PepsiCo first began refocusing its efforts on the Gatorade brand in 2010, when the company adopted a more holistic approach to sports hydration and nutrition. The result was the G Series, developed by Gatorade Sports Science Institute with two focuses in mind: getting the body ready for exercise and helping the body recover afterward. Each portion of the series is designed to help athletes compete before, during and after athletic events.

The G Series includes Prime, a pre-performance drink in a pouch; Perform, a sports drink containing electrolytes to promote hydration; and Recover, a post-performance beverage.

Many of the G Series products have been successful. Others, such as G Fit, which was pulled from shelves late last year, have not.

PepsiCo also has tapped into nutrition through the chilled juice category via its Tropicana and Naked brands. “Great advertising and incredible execution focus” have led to impressive performance gains in Tropicana, Ms. Nooyi said.

“Look for us to grow the Naked franchise, and to continue to bring innovation into the Tropicana franchise,” she said. “The launch of Tropicana Farmstand, which is our fruit and vegetable product, is also doing very well.”

Launched nationally in January, Tropicana Farmstand provides one serving of fruit plus one serving of vegetables in each 8-oz bottle. It is also an excellent source of vitamins A and C and is considered a good source of potassium.

“Continue to look for innovation from Tropicana,” Ms. Nooyi said. “We feel good about the tailwinds those categories have, because they are more in the nutrition space, coupled with the fact that our brands are very strong.”
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