PepsiCo’s Gatorade to Launch Caffeinated Energy Drink for Athletes | 2022-09-01
The Fast Twitch brand will launch at retail nationwide in early 2023 following its NFL debut.
PepsiCo’s Gatorade, the fourth largest liquid refreshment drink brand in the United States, is preparing to launch a caffeinated energy drink formulated specifically for athletes. The product, called Fast Twitch, could aptly be described as a cross between an energy drink and a sports drink. However, Gatorade will position Fast Twitch in the energy category on store shelves and in marketing, Michael Del Pozzo, President and CEO of Gatorade Performance Portfolio, told BD in an exclusive interview. Fast Twitch, which will be released in the United States next year, will target consumers who are content with existing carbonated energy drinks before a workout or avoid them altogether due to undesirable ingredients, he said. “That’s how Gatorade makes energy,” Del Pozzo said of Fast Twitch. “The energy category is that $16 billion category where nobody really focused on sports. And we know there’s something like 35 million athletes who don’t consume caffeinated energy today. We think Fast Twitch is tapping into a new segment. That’s the goal, to get to this new segment.
DETAILS. “Fast Twitch” is a reference to human muscle fibers that contract rapidly during high-intensity exercise. The product is non-carbonated, contains no sugar, and has no artificial colors or flavors. It is sweetened with sucralose and contains five to 10 calories per 12 oz bottle. Each bottle contains 200 mg of caffeine. (A 16 oz can of Monster Energy contains 160 mg of caffeine.) Electrolyte levels will be consistent with Gatorade sports drinks. The PET bottle includes a resealable cap. The drink will be priced at a premium at Gatorade. Flavors at launch will be Strawberry Watermelon, Glacier Freeze, Orange, Strawberry Lemonade, Cool Blue, and Tropical Mango. The bottle graphics will include the words “From the creators of,” placed above a Gatorade “G” logo that includes the brand’s lightning bolt icon (as seen on Propel Fitness Water of PepsiCo).
ENERGY AISLE. At retail, Fast Twitch will be positioned across the energy spectrum. “You wouldn’t see it in the Gatorade section,” Del Pozzo said. “You would see that in this new energy space that we are creating in an energy subsection.” He added that the product would also “come to life” on the perimeter of the store. Del Pozzo said Gatorade anticipates “strong incrementality” for the core sports drink business as Gatorade consumers are lured into the energy aisle. “We’re going to be watching very closely from the get-go and making sure that’s what’s happening and probably iterating as needed,” he said.
DISTRIBUTION. Gatorade will seed Fast Twitch with National Football League players during the current NFL season before the drink becomes available at retail nationwide in early February, around Super Bowl time. “We expect this to be a big bet launch,” Del Pozzo said. “We would scale the same way you would see us grow one of our big launches on Gatorade or in our PepsiCo business. We anticipate scaling fairly quickly. In May, PepsiCo renewed its multi-year sponsorship with the NFL covering Pepsi, Gatorade and Frito-Lay. The product formulation incorporated input from NFL and sports performance experts, said Del Pozzo. “We found that a lot of athletes weren’t touching caffeine but wanted it. because they knew it could boost mental and physical performance,” Del Pozzo said. “Or they were indulging in a product that wasn’t designed to be associated with sports.”
PERSPECTIVE. Traditional energy drink brands have long struggled to gain wide acceptance on the fringes of major professional sports leagues due to their high sugar content, carbonation and artificial ingredients. Fast Twitch may now be able to break through this hurdle with a sports drink-like offering that includes Gatorade imprimatur and removes the barriers for athletes to caffeine-rich beverages.
CONTEXT. Fast Twitch will hit the mainstream market two years after BodyArmor launched its first caffeinated sports drink called Edge. This product was a follow-up to Gatorade’s caffeinated variant of Bolt24, an “all day” hydrating drink. Bolt24 has since been discontinued to make way for Gatorade Fit, which launched in February this year. Meanwhile, Cliff Bar markets a caffeinated energy chew for athletes. Gatorade Sports Chews do not come in a caffeinated version. According to BD data for the first half of 2022 in US retail, the Gatorade wallet grew +9.8% in dollar terms on a +15.0% price increase and declining volume -5.2%.
NEW MANAGEMENT. Del Pozzo began his more than 20-year career with PepsiCo in Chicago as a Gatorade account manager, shortly after PepsiCo took over the brand following the company’s acquisition of Quaker Oats. In July of this year, Del Pozzo became president and general manager of the Gatorade Performance portfolio, succeeding Brett O’Brien, who became chief marketing officer for Frito-Lay’s US unit. Del Pozzo was most recently SVP of Sales and Chief Customer Officer for Frito-Lay North America. Two goals since taking over Gatorade have been to increase collaboration across functions from marketing to manufacturing, and to reconnect with Gatorade’s roots, Del Pozzo told BD. In a few weeks, he’ll be spending time with the family of Dr. Robert Cade, who led the University of Florida science team that invented Gatorade in the late 1960s. “We could have all the innovation in the world, and we could have great consumer logic and science behind it,” he said. “If we don’t add capacity to support that. If we don’t build infrastructure to support that. If we don’t have the right sales tools, it doesn’t really matter. So for us, connecting all these parts in a streamlined and integrated way is a great opportunity to stay ahead of our competitors.
INNOVATION-DRIVEN. Gatorade, which has about 70% of the U.S. sports drink market, has faced increasing competition from brands such as BodyArmor and a host of startups now looking to replicate BodyArmor’s success as a brand. challenger. Del Pozzo said innovation will be key to meeting the challenge. “There’s still so much avenue for us, even just in the innovative products we’ve launched,” he said, citing the recently launched Gatorlyte as an example. “Gatorade Fit is another one we think we got right.” He said the next step for Gatorade Fit is to grow the brand further, especially in smaller stores and high street accounts. During this time, retail Gatorlyte All Commodity (ACV) volume grew to over 70%. “We’re still not where we need to be,” Del Pozzo said. When asked if the brand’s growth has been focused in Hispanic markets and inner cities, Del Pozzo said progress started there and spread. “What we’ve seen is that the product has done pretty well everywhere as we’ve been developing it,” he said. “It’s a unique product.” Gatorade will also be looking to add flavors to both Gatorade Fit and Gatorlyte, he said.
GATORADE CAPABILITY. Asked about the continued supply shortages of Gatorade products since 2020, Del Pozzo said: “We have improved our supply position compared to a year ago and continue to increase capacity in line with what we need. to grow in the category.”