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PepsiCo Launching Organic Gatorade

By Lauren R. Hartman, Product Development Editor

Jan 15, 2016

GatoradelogoThis year, PepsiCo will begin offering two versions of its popular sports drink Gatorade—traditional and organic. Currently, Gatorade, which recently celebrated 50 years on the market, contains sucralose and artificial coloring, though it does include certain natural ingredients and flavors. The company hasn't yet disclosed what ingredients would be added or eliminated to make the sports drink organic.

But Organic Gatorade is one several new projects PepsiCo is moving forward with in its latest marketing campaign targeting consumers wanting healthier on-the-go foods.

Forbes says it appears that PepsiCo is trying to tap into the healthy drinks trend, which is grabbing big sales and will continue to do so, as consumers in developed economies also choose healthy beverages. On December 14, PepsiCo launched its “Hello Goodness” initiative of vending units that offer healthy product choices from the company’s diverse food and beverage portfolio.

PepsiCo also announced plans to launch Tropicana juices with non-GMO (genetically modified organisms) varieties that will display a certification label from the non-GMO Project. Under current U.S. Department of Agriculture guidelines, organic products are also free of GMOs, so the new Gatorade could also be eligible for the non-GMO Project verification seal.

PepsiCo’s non-carbonated drinks segment, which includes Gatorade and energy drinks such as AMP, as well as Tropicana, and other juices, comprises more than 20 percent of its valuation according to Forbes' estimates, while its soft drinks division contributes less than 15 percent. The launch of organic Gatorade this year can lead to increased customer interest as an increasing number of consumers prefer more natural foods. Availability of this beverage in the Hello Goodness vending machines can also lure more consumers, leading to a higher market share. The product could also prove incremental for the sports drinks category, bringing in customers new to the segment, Forbes notes.

With some three-fourths of Americans buying organic products, the category has shifted from niche to mainstream, according to Carl Jorgensen, director of global consumer strategy of wellness, at food broker, Daymon Worldwide, Stamford Conn. More consumers are looking for foods and beverages with no GMOs, preservatives and more "natural" foods, so PepsiCO's searching outside of the soda industry for growth to keep its edge.

"Consumers want more choices when it comes to what they eat and drink on-the-go and we're providing the choices they want," states Kirk Tanner, chief operating officer at PepsiCo North America Beverages. "For years, PepsiCo has been transforming its portfolio to offer more and better food and beverages."

PepsiCo is one of many food and beverage companies that have recently pledged to cut back on artificial ingredients and preservatives.