• by Karl Greenberg , December 8, 2010

Sarah Robb O'Hagan, CMO at Gatorade and Stanley Hainsworth of Seattle-based design firm Tether have a lot to say about collaborative work in extending and reinventing a brand. The two detailed where Gatorade has been and where it is going in a presentation at Wednesday's ANA Creativity Conference in New York.

O'Hagan said that when she came to the company in 2008, it seemed, on the surface, as if her job would be easy -- since Gatorade enjoys 77% share of athletic drinks category. She showed a slide that explained why it would not be such an easy job, since her arrival was perfectly timed with the economic downturn.

The visual was 10 feet or so of grocery store shelf space lined with identical bottles filled with red, green and yellow Gatorade. O'Hagan said that monolithic presence and brand equity kept the company in the red until the macroeconomic crisis. "In the years leading up, we brought a lot of people into the franchise. People were drinking it because it tasted great, not because it was functional."

That worked fine in boom times, she said, but when the economy shriveled up, people stopped buying. "They said 'I can pay for this flavor I like or get hydration for free from the tap,'" said O'Hagan. The company had to begin by redefining innovation, which used to mean new flavors. "We have 150 flavors but 90% of business is three flavors. So at a grocery store you see 20 feet of Gatorade, a wall of flavors with tons of loyalty, but not a whole lot of innovation."

What the PepsiCo unit did was figure out brand extensions based on what athletes need to imbibe to be prepared before, during and after competing -- thus the 01Prime, 02 Perform, and 03 Recover line of G Series products, each with different function-designed packaging and formulations.

"In two short years, we have transformed from one product and a wall of flavors to three platforms, the G Series Pro for elite athletes, G Series for performance, and high school athletes," she says, adding that the company will expand the G Series line again next year with a G Series Fit product for adults who exercise to lose weight and are looking for lower-calorie athletic drinks.

Stanley Hainsworth, founder of Seattle's Tether, said the company redesigned the Gatorade buckets pro teams use on the field, and thus are on-camera constantly at sports events. "We made the designs sexier, did functional things like make the spouts bigger, and we even put an extra handle on the bottom for the traditional dunking of the winning coach. It has gotten us double-digit increases in awareness of Gatorade at sporting events."

The company has also launched a naturals line in bottles with clear caps and simple labeling. "We are incubating it. We are only at Whole Foods right now," said O'Hagan. "We have to build the offering with a unique consumer."

And the brand has recently moved into sporting goods channels, a space Gatorade had not exploited in the past. The company has launched a line of nutrition products including shakes and protein bars.

"Actually, these were developed 15 years ago and only seeded to athletes; we never chose to sell to consumers," she said. "We asked ourselves how we could take them from the locker room to retail shelves. We gave it a premium and athletic look, and brought it into the G Series family." The marketing communications for the G Series Pro products tout the Gatorade Sports Science Institute, with a "Fueled by Science" theme.

Next year, the company will roll out G Series Fit. "A lot of people who grew up playing sports have a relationship with the brand; they used to use Gatorade but these consumers hit college and stopped playing sports and now look at Gatorade and say, 'I'm not drinking it; too many calories.' But we see an opportunity with latent brand loyalty."

Like other G Series products, the Fit series comprises three main SKUs for before, during and after working out, with a 01, 02, 03 designation. "We will launch in a couple of months."