Sports drinks, the battle continues

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Coca-Cola Co. said its relaunched Powerade sports drink was gaining
momentum and braced to better challenge Gatorade

Coca-Cola Co., the world's No. 1 soft drink company, said on Monday its relaunched Powerade sports drink was gaining momentum and braced to better challenge Gatorade, the leader in the fast-growing sports drink market.

"In the three months that the brand has begun the relaunch, we have gained share in the marketplace, which is great because it is the first time it has happened in a long time," Rohan Oza, senior brand manager of Powerade, told Reuters.

Oza, who is currently overseeing the introduction of Coca-Cola's new B-vitamin-fortified Powerade and Powerade Light drinks in the United States, said the brand had recently gained an additional 1.5 per cent share of the sports drink category.

The No. 2 selling sports drink, Powerade claims about 15 per cent share of the market, compared to about 78 per cent for Quaker Oats's Gatorade brand, according to Beverage Digest, a leading industry newsletter.

Earlier this month, Coca-Cola's arch rival PepsiCo Inc. completed a $13-billion acquisition of Quaker Oats.

Purchase, New York-based PepsiCo. agreed to sell its No. 3 selling All Sport brand and not to distribute Gatorade in the Pepsi bottling system for 10 years as part of the deal.

Coca-Cola, which backed away from its own acquisition of Quaker Oats last year, is marketing its make-over of Powerade as a reinvention of the sports drink category, which will provide products that boost energy as well as quench thirst.

Coca-Cola's new Powerade formula, featuring B3, B6 and B12 vitamins, apparently targets not only athletes, the traditional market for sports drinks, but also all those with active lifestyles.

Coca-Cola , which did not disclose how much it was spending on the relaunch, said 17 to 24-year-olds were the core market for the new Powerade, though the company added that it expected the relaunched products to appeal to a broader number of consumers than competitors.

"We're marketing a system versus a stand-along product," Oza said.

Besides changing the Powerade formula, Coca-Cola also has redesigned the brand's packaging and is launching a media blitz, including television ads that feature athletes and others performing what it described as "aspirational" feats.

On Tuesday, Coca-Cola is scheduled to host a celebration of its relaunch in New York City's Union Square.

The company said 50 "gorgeous athletic" models and two of the world's strongest men would be at the event.

Analysts said the relaunch appeared to be an attempt to reposition and set apart Powerade from other brands.

"I think it's clever.

It differentiates this brand in a significant way from Gatorade," said John Sicher, editor of Beverage Digest, who added that Coca-Cola still faced a "Herculean" task in its battle against Gatorade.

Shares of Coca-Cola gained 13 cents to close at $45.80 on Monday on the New York Stock Exchange.

PepsiCo. fell 61 cents to end at $45.05 a share on the NYSE.

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