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PowerAde pushes zero-calorie sports drink, challenges Gatorade

BY Jenna Duncan

NEW YORK PowerAde, the sports drink produced by Coca-Cola, is boosting its sports beverage line by challenging competitor Gatorade with a lower-calorie product.

Earlier this month, Gatorade launched G2, a sports drink with fewer calories than original Gatorade. To challenge Gatorade, and in keeping in line with Coke’s other zero-calorie beverages—Coke Zero and Sprite Zero—PowerAde has launched PowerAde Zero with a print ad campaign starring tennis player Venus Williams next week. PowerAde Zero has no calories, versus G2’s 25 calories per bottle.

“PowerAde offers carbohydrates for those with intense workouts,” says Matt Kahn, vice president of marketing. “But there’s a whole group of calorie-conscious gym-goers. This is the first major brand to give hydration and electrolytes with zero calories.”

PowerAde said that the launch of PowerAde Zero is an attempt to stimulate growth in its segment. Its new Zero variety is available in strawberry, grape and mixed berry and is flavored with artificial sweeteners acesulfame potassium and sucralose.

G2 has only been on the market four months, but it has already claimed 8 percent of sports-drink sales. PowerAde hopes Zero will soak up a large portion of the segment.

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Tootsie Roll maintains independence during times of consolidation

BY Jenna Duncan

CHICAGO The news of the pending sale of Wrigley to Mars this week has left speculators scanning the market for other independent confectioners who have withstood looming threats of consolidation. But one American candy industry stalwart, Tootsie Roll, seems to have no plans to sell any time soon.

Family-owned and led by 88-year-old chief executive officer Melvin Gordon and his wife, 76-year-old president Ellen Gordon, have been mum with their shareholders on the topic of selling.

Many shareholders, and even he company’s stock analyst, have indicated that they thought a sale such as the transaction that put Wrigley in the hands of Mars would be the best thing for Tootsie Roll. Some believe that leadership by an industry giant might help grow distribution and sales and keep the candy company afloat in a rough economy—especially in overseas markets where growth is projected.

Tootsie Roll reported that its profit fell by 22 percent last year and its first quarter of 2008 was even worse. The company said that it is suffering from the soaring costs of ingredients.

But despite its losses, the company has been moot on the topic of potential buyers and its current leadership appears to be firmly in place.

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Eagle Snacks may see a comeback

BY Jenna Duncan

CHICAGO Reserve Brands, a small Chicago-based start-up, has obtained the exclusive license to market Eagle Snacks, a brand whose familiarity is known by retailers and consumers across the country.

But what many consumers do not realize is that Eagle Snacks are not currently on the market, and haven’t been since Eagle was purchased from Anheuser-Busch by Procter & Gamble in 1996. Though the brand name is still easily recognized, its line of snacks hasn’t been in production for some time. The fact that Eagle’s absence has seemingly gone unnoticed might actually be a great “comeback” strategy for the brand, Reserve said. It plans to reintroduce Eagle Snacks to grocery and retail shelves later this year.

“When people say, ‘I didn’t even realize you can’t buy Eagle Snacks any more,’ you know you’ve got a business opportunity,” Reserve Brands president and chief executive, Scott Lazar, said.

Many consumers remember Eagle as the first brand to have snack nuts on airplanes, company spokespersons said. The name recognition will be a good thing, they said, for the company to introduce new products. Eagle plans to roll out two new product lines into Chicago-area Dominick’s stores later this year; Eagle Bursts and Poppers.

Reserve Brands’ goal is to reach $50 million in sales in its first year and to reach $100 million in sales in the next two to three years. After that, the company said, it plans to sell to a bigger player.

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