Growth in the US sports nutrition market has been pretty explosive in recent years, but the failure of high profile launches such as PepsiCo’s Gatorade G Series Fit range shows that even the biggest players sometimes get things badly wrong, says one market expert.
The range, which was launched in 2011 to target fitness buffs but withdrawn a year later after disappointing sales, is a perfect example of a company “offering entry level products to advanced users at high prices, which wasn’t a recipe for success”, according to Euromonitor International consumer health analyst Chris Schmidt.
Schmidt, who was speaking at last week’s Sports and Nutrition Lifestyle event hosted by NutraIngredients, said the “line was targeted at true gym rats, not necessarily the market they should have gone for”.
It’s going to be pretty difficult for Gatorade to really break into the true sports ‘nutrition’ market
He added:”[PepsiCo was targeting] not necessarily professional athletes or bodybuilders, but people that played sport in high school or college, they work out intensively at least three or four times a week.
“This is certainly a choice demographic for any sports nutrition producer, but the G Series Fit line didn’t fit with this demographic.
“The line seemed to be targeting fitness fanatics who don’t already consume sports nutrition or would be willing to spend many more times per serving for branding and convenience, which just didn’t work out.”
The key takeaway is “know your audience”, he said. “Are they already taking sports nutrition products? And are they really going to switch just for the branding and the convenience?
“It’s going to be pretty difficult for Gatorade to really break into the true sports ‘nutrition’ market as opposed to the [more mass market] sports foods and drinks market.
“It will be really interesting to see how they retool it as they say they are re-imagining the line.”
Any foray into mass channels will need to be weighed against the potential to alienate core users
Euromonitor, which excludes energy drinks such as Red Bull, ‘mainstream’ drinks such as regular Gatorade and weight management products such as Atkins Balance from its definition of sports nutrition products, values the US retail sports nutrition market at $4.7bn in 2012, up 13% versus 2011.
The market - which is expected to grow to $6.6bn in 2017, reflecting a compound annual growth rate of 7% - remains dominated by protein powders (accounting for 70% of sales in 2012), followed by ready to drink beverages, protein bars and non-protein products, he said.
Brand extensions, instead of pure distribution expansion, could prove to be the best remedy
However, to sustain this level of growth, manufacturers will have to continue to broaden the appeal of sports nutrition products and formats to appeal to health and fitness enthusiasts, women and ‘weekend warriors’, without alienating their core user base, he added.
“Any foray into mass channels will need to be weighed heavily against the potential to alienate the core user base. Brand extensions, instead of pure distribution expansion, could prove to be the best remedy.”
A company that knows how to tackle this conundrum is CytoSport, which targets its Muscle Milk product at mainstream audiences and brand extension Monster Milk at more hardcore users, he said.
“Realize that what appeals to the 250lb weight lifter on the incline bench isn’t likely to appeal to the fitness mom jogging behind her bugaboo in the park.”
Bars, RTDs and other snackified versions of energy products offer significant appeal to mass consumers
Meanwhile, growth in wellness regimes, the rise of endurance sports, marathon participation, CrossFit/P90X, event-based Tough Mudder/Spartan Race style events and positive media coverage of protein are creating new opportunities for marketers, he said.
“Between 2001 and 2011 the number of marathon finishers rose by well over 80% to well over half a million.”
As the user base expands, producers are also targeting casual users and amateur athletes with more convenient formats such as chews, bars, ready-to-drink products (RTDs), 1 lb bags and less edgy/extreme packaging and claims, added Schmidt, citing products such as sports beans, Core Power ready to drink shakes, Clif Bar Blox and Gels, and Twinlab protein powder bags.
“Bars, RTDs and other snackified versions of energy products offer significant appeal to mass consumers, although they are probably too expensive per serving to gain much traction with the core demographic.”
More producers are taking cues from the health & wellness industry
Similarly, producers are also looking at new protein blends, veggie proteins from algae to brown rice, and ‘clean’ or ‘all-natural’ formulations certified by third-parties in order to “draw in more of the health & wellness crowd”, he said.
“More producers are taking cues from the health & wellness industry: Organic, free-from and all-natural formulations are entering the fray and increasing the category’s appeal among non-traditional users.”
A number of retailers have actively embraced the category through private label
Food, drug and mass retailers are also expanding their sports nutrition SKUs, with a number of large retailers such as Target now promoting their own private label whey protein powders, he observed.
“More than paying lip service, a number of retailers have actively embraced the category through private label. In addition to better access, seeing the products on the shelf at the grocery store can have a halo effect for the category.”
To watch Chris’s presentation on demand, register here for free at the Sports Nutrition online event.