Sports Drinks in the Philippines

PROSPECTS

Competition and price rises hamper volume growth

Although sports drinks continued to see off-trade current value growth in 2019, this was due to another year of price rises, as off-trade volume sales saw little movement. In addition to some consumers being put off by higher prices, sports drinks faced direct competition from other hydration products, particularly functional bottled water.

Smaller formats in traditional retailers help to avoid volume decline

The higher unit prices of sports drinks compared with other types of beverages makes this category a niche. Whilst sports drinks were previously perceived to be functional and healthy beverages, they were affected by the sugar tax, leading brands such as Gatorade and Powerade to be associated with sugar.

Partnerships with sports teams maintain consumers’ interest

The consumption of sports drinks has long been associated with athletic and vigorous activities, due to active sponsorship and marketing campaigns by players in sports leagues. For example, Pepsi-Cola Products Philippines partners the Philippine Basketball Association and the UAAP, whilst Pocari Sweat partners with the Premier Volleyball League, with these sports leagues attracting different age groups.

COMPETITIVE LANDSCAPE

Gatorade’s brand equity maintains its dominance

Pepsi-Cola Products Philippines maintained its dominance in sports drinks in off-trade value terms in 2019 thanks to its Gatorade brand. Beyond its above-the-line and below-the-line marketing, the company actively banks on its partnership with sports leagues such as the Philippine Basketball Association and the UAAP.

Improvements to route to market and promotion

Whilst the focus of Coca-Cola Bottlers Philippines is primarily on carbonates, in 2019 the company’s Powerade brand, ranked second in sports drinks, made efforts to push its 250ml PET bottle SKU in traditional trade channels. However, the company’s efforts to improve the route to market for Powerade was not complemented with significant marketing promotions for the brand, leading to a static off-trade value share.

International players dominate, leaving no room for local companies

As the three leading players in sports drinks are international giants, no domestic player has attempted to enter this category. These players have a presence in both traditional and modern retailers, thereby making the sports drinks category difficult to enter for other players, which are unlikely to be able to match their level of distribution and marketing support.

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