O'Hagan said that when she came to the company in 2008, it seemed, on the surface, as if her job would be easy--since Gatorade enjoys 77% share of the sport-drink category. She showed a slide that explained why it would not be such an easy job, since her arrival was perfectly timed with the economic downturn, according [image-nocss] to a report in MediaPost's MarketingDaily.
The visual was 10 feet or so of grocery-store shelf space lined with identical bottles filled with red, green and yellow Gatorade. O'Hagan said that monolithic presence and brand equity kept the company in the red until the macroeconomic crisis. "In the years leading up, we brought a lot of people into the franchise," she said, according to the report. "People were drinking it because it tasted great, not because it was functional."
That worked fine in boom times, she said, but when the economy shriveled up, people stopped buying. "They said, 'I can pay for this flavor I like or get hydration for free from the tap,' " said O'Hagan.
The company subsequently began by redefining innovation, which used to mean new flavors.
"We have 150 flavors, but 90% of business is three flavors," she said. "So at a grocery store, you see 20 feet of Gatorade, a wall of flavors with tons of loyalty, but not a whole lot of innovation."
What the PepsiCo unit did was figure out brand extensions based on what athletes need to imbibe to be prepared before, during and after competing, thus the 01 Prime, 02 Perform and 03 Recover line of G Series products, each with different function-designed packaging and formulations.
"In two short years, we have transformed from one product and a wall of flavors to three platforms: the G Series Pro for elite athletes, G Series for performance, and high school athletes," she said, adding that the company will expand the G Series line again next year with a G Series Fit product for adults who exercise to lose weight and are looking for lower-calorie athletic drinks.
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