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Hydrated

Pepsi introduces Gatorade Water, doubling down on the functional-bev trend with H2O

Snacks / Wednesday, September 13, 2023

Not Glacier Freeze… Pepsi’s latest Gatorade flavor isn’t a flavor: it’s water. As an obsession with hydration takes over the nation, Gatorade Water wants to hit all the H2O trends. It’s alkaline and has electrolytes, and comes in bottles made of recycled plastic. The flavorless drink is set to hit shelves early next year as Pepsi continues investing in functional beverages.

  • Functional = providing more than just sugar/alcohol, enhanced by a healthy(ish) touch. Think: energy drinks with vitamins, water with electrolytes, and kombucha. 

  • Pepsi has added other functional bevs to its Gatorade portfolio, including Muscle Milk protein shakes, Fast Twitch energy drinks, and Gatorlyte (extra electrolytes) and Gatorade Fit (less sodium and sugar).

8 glasses/day… The functional-drinks market has expanded beyond sugary sports drinks to plain old agua. Sales of “functional water” (marketed as having extra benefits) are projected to hit $23B in 2028, up from $13B in 2020. As consumers drink less soda/alcohol, Liquid Death created a $700M company selling canned water, while fancy water bottles are now like status symbols (see: Stanley cups, Hydro Flasks). Not to mention TikTok’s #WaterTok trend, where H2Influencers use flavored packets to mix up concoctions like “salted caramel apple water” (the Gatorade Water label even has a little call-out to “blend for taste”). 

  • Fridge rivals: The functional-water category’s dominated by Coke-owned Smartwater, which has 27% market share, along with Nestle’s Essentia and Pepsi’s Lifewtr.

Hydration hasn’t hit its saturation point… As consumers increasingly prioritize getting their liters in, there may be more ounces/person for beverage brands to divvy up. And while health experts debate the benefits of functional drinks (electrolytes often = sodium), there’s one thing they agree on: staying hydrated is good for you.

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