Pacifichealth Laboratories Inc. (PHLI)

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Cadbury Schweppes tries to muscle into sports-drink lineup
06/19/2007
By DAVID KOENIG / Associated Press
Gatorade and Powerade account for 99 percent of the market for so-called sports drinks, concoctions touted as replacing key elements that the body sweats out during hard exercise, but candy and beverage giant Cadbury Schweppes PLC thinks there is room for another player on the field. Cadbury is launching a new drink with a twist — it contains protein, which company officials claim increases athletes' endurance by nearly one-third over the other brands.

"It's the biggest stride in sports drinks in over 30 years," declared Jason Ash, the executive managing the brand, called Accelerade, for Cadbury's U.S. beverages unit.

Cadbury is planning a $50 million marketing campaign, according to industry officials, but experts say it won't be easy to break into the sports-drink lineup. Gatorade, made by PepsiCo Inc., accounts for 81 percent of U.S. sales, and Powerade, from The Coca-Cola Co., has 18 percent, according to Beverage Digest. Despite the competition, the appeal of the market is easy to see. Sales of sports drinks rose 13 percent last year while soda sales fell nearly 1 percent, according to the trade publication. (Bottled water did better than both, gaining more than 16 percent.)

"Quite a few companies have tried to break into the sports-drink category over the years, but it's not simple," said John Sicher, the publication's editor and publisher.

Others have failed because they lacked good distribution and financial staying power or just didn't seem that different from Gatorade and Powerade. But Sicher said if anyone can succeed, it might be Cadbury. "They're big, financially strong and they know how to market," he said. "And this product is a little different, with the protein component."

Cadbury didn't invent Accelerade. The product has been around for several years in powder form that was sold in nutrition stores and bike shops. Cadbury bought the brand and patents last year from Pacific Health Laboratories in New Jersey.

A 20-ounce bottle will carry a suggested price tag of $2.29. Cadbury is targeting retailers such as 7-Eleven, Target Corp., Kroger Co., Safeway Inc. and GNC vitamin stores.

The label boasts of a 4-to-1 ratio of carbohydrates to protein, whereas Gatorade and Powerade contain carbohydrates and electrolytes such as sodium and potassium to replace lost fluid.

Gatorade and Powerade have also extended their lines with vitamins and other ingredients, showing they can respond to changes in the market, said Keith Patriquin, an analyst at Loomis Sayles & Co.

"You have two very well-entrenched brands, both of which are holding their own in market share," he said.
Cadbury executives promise a big campaign of broadcast, print and online advertising to introduce Accelerade to consumers. The push will include streaming video of an attempt by Dean Karnazes to break the Guinness World Records mark for the longest treadmill run in 24 hours.

Gatorade recently found a more recognizable star for a global ad campaign: tennis player Maria Sharapova.