A year ago, PepsiCo (PEP) relaunched Gatorade as "G," a sports drink line with a series of confusing sub-brands such as "G Prime 01," and "G Recover 03" and an ambitious social media effort. It didn't work. Sales of Gatorade -- PepsiCo's fourth largest brand -- failed to reverse an 11 percent slide in 2009, growing according to the company's annual report (see page 64).
Worse, according to a survey by E-Poll Market Research, Gatorade's logo* awareness among consumers collapsed from 82 percent in 2009 to 34 percent last year after the G relaunch in 2009 and stands at just 43 percent today.
The best that can be said of the relaunch is that it appears to have halted Gatorade's sales slide. Sales saw a "a mid-single-digit increase," the company said.** Looked at the other way, the relaunch appears to have sloughed off all Gatorade's casual consumers leaving only the core fans who seek the brand out.
In an email, the company insisted G was on the "right track":
...that third-party poll is measuring awareness of the logo versus the brand itself. If you take a deeper look at the ePoll data, it clearly shows that the "G" logo is resonating with our target consumer group (13-17 year old competitive athletes) and the association with the term "sport" is rising.That may be true, but I would argue that if you had a brand that was almost universally recognized, then switching it for an unfamiliar one that requires a relaunch in which two years later awareness is merely rising among youngsters is an inefficient way of building on your existing equity.
It's a stark lesson that not all new ideas are good ideas. Changing the brand's name was intended to give Pepsi a new story to tell about Gatorade, but it left consumers baffled. (Who, exactly, cares about the difference between "G 01 Prime" and "G Series Pro 01 Prime"?) The company thought it could increase interest by devoting four full-time staffers to a social media center intended to rack up Facebook "likes" and one-on-one conversations with fans. It worked, in one sense, according to Ad Age:
Since the launch of G-Series and Mission Control, discussions about sports performance have jumped to nearly 60% from 35% in April.But, as more and more marketers are beginning to learn, Facebook likes don't translate into sales.
The Gatorade debacle is a distraction for PepsiCo CEO Indra Nooyi. Diet Coke just eclipsed both Pepsi and Diet Pepsi, surely an intolerable position for the company. Thus the G team find themselves in the position of being an unnecessary extra problem for a drinks company that has more serious fires to fight.
*Logo, brand, whatever: See comments for debate.
**This item originally said incorrectly that Gatorade's 2010 sales saw a less than 1 percent increase. In fact, it was all PepsiCo's "non-carbonated beverages" that saw a 1 percent increase. Apologies for the error.