Sports Drinks in the Philippines

PROSPECTS

Sports drinks makes a case for hydration

The consumption of sports drinks has long been associated with athletic and vigorous activities, with the active sponsorship and marketing campaigns of incumbent players in sports leagues. This perception rides on the growing interest of different consumer groups, particularly millennials, in health and wellness.

Sports drinks are not spared the sugar tax

While sports drinks are perceived to be functional and healthy beverages, they are not exempt from the sugar tax, and this saw significant price rises in 2018. With sports drinks prices rising by over 20%, this encouraged a greater shift to smaller pack sizes, particularly for the brands available in traditional retailers.

Growth expected to slow

Over the forecast period, it is anticipated that sports drinks will grow more slowly, owing to the categories increasing maturity compared to other hydration alternatives, such as coconut water and functional bottled water. However, the strong focus of incumbent players on being visible in high profile sports leagues, and other brand activities, will help sustain sports drinks’ higher share of sales compared to other hydration beverages during the forecast period.

COMPETITIVE LANDSCAPE

Pepsi-Cola Products Philippines remains the leading brand in sports drinks

Following a slowdown in 2017, sports drinks recovered in 2018, with Gatorade as the main growth driver in terms of off-trade volume. Banking on its strong brand equity, Pepsi-Cola Products Philippines continued with aggressive marketing campaigns for Gatorade, while also increasing its availability in both traditional and modern retailers.

International players continue to dominate sports drinks

With the two soft drinks giants leading the way in sports drinks, as well as the active push of Otsuka (Philippines) Pharmaceuticals, with Pocari Sweat, there is no domestic player that has attempted to enter this category. While Pocari Sweat concentrates on growing in off-trade channels, Powerade also has its eye on traditional retailers, thereby making sports drinks difficult to enter for players which will not be able to match this level of distribution and marketing support for their brands.

No space for domestic companies

Over the forecast period, sports drinks will continue to be a category that is driven by international players. As Gatorade has cemented its footing through above-the-line and below-the-line marketing efforts, it will be challenging for a domestic player to enter this category.

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