The Post-Mike Millennium

Brandweek, Jan 3, 2000 by Terry Lefton

Fast-growing Gatorade enters the Millennium with a more diverse product arsenal and marketing that is looking beyond Jordan.

For so many years it was axiomatic: Gatorade had one commercial spokesman and it was Michael Jordan, whose legacy--ESPN's selection of him last week as the century's top athlete notwithstanding--will be as much for his commercial appeal as his basketball skills. Just as certain was that Gatorade was an isotonic brand that came in a few garishly colored flavors.

Having purchased the brand that invented the category in 1983 from Stokely-Van Camp and grown the business more than tenfold, Quaker Oats had no reason to mess with success. Even within the growing new age beverage category, Gatorade is an outstanding success story maintaining a remarkable 80% market share in the face of an isotonics assault by beverage powerhouses Coke and Pepsi, whose attack seems to have stimulated a burst of creativity and innovation. In Quaker's most recently completed fiscal year, Gatorade sales surged 13% to $1.7 billion, completing a decade of double-digit growth.

Still, in the face of all that success, what seemed certain for the brand has changed. To be sure, Jordan is still a fixture for the brand starring in four TV spots in '99, but he was joined--and athletically bested--earlier this year by soccer star Mia Hamm in a memorable execution from Foote, Cone & Belding, Chicago. More recently, the brand has signed endorsement deals with high-profile athletes like NBA vertical leap king Vince Carter, WNBA No. 1 draft choice Chamique Holdsclaw, Peyton Manning, quarterback of the surging Indianapolis Colts, and Derek Jeter, a fixture at shortstop for a New York Yankees team that has won three of the last four World Series. Also signed has been Cal Ripken, baseball's iron man record holder, who'll serve more as a spokesman to parents than to those who quaff the sports drink.

That's all a dramatic change from the line often uttered by 15-year Gatorade sports marketing king Bill Schmidt, whose stock response to those asking was always, "We have one endorser, and it's Michael Jordan." Of course, among the changes at Gatorade was Schmidt's departure in March. He has been succeeded by Tom Fox, who worked on the brand from 1988 to 1993 and returned in April as vp-sports marketing. Also added was Jeff Urban, director of sports marketing, who had sales experience with the Baltimore Orioles and USA Today. The pair adds some property experience that may have been missing from the Gatorade mix.

In an interview at Quaker's Chicago headquarters, Fox said the change in the one-endorser policy was necessitated by two key developments. First, with Jordan retired, opportunities to show him in sweaty competitive situations have become more limited, although that didn't stop FCB from constructing the tete-a-tete with Hamm to do just that. More broadly the the marketplace for athlete endorsers has transformed.

"The paradigm in the athlete marketplace has changed' said Fox, who served as NBA Properties director of sponsorship programming and managing director for Nike's Asian operations before returning to Quaker. "Michael Jordan was our only endorser for a long time, but remember, Michael used to sell a lot of shoes. Nike and its competition used to put Michael's name or another athlete's name on shoes and it would sell a lot. That model is dead now, if only because so many brands adopted it."

So now it's more about athletes' ability to deliver Gatorade's longtime claim that it's as indispensable a piece of athletic equipment as sneakers, and less about the athlete being the force that sells product.

"Like a lot companies, we question the ability of any single athlete to reinforce brand equity to such a huge extent that it will move product off the shelf, but we look for them to reinforce our ubiquity and sponsorships across sports," Fox said. "So we are looking at athletes that are up-and-coming in their sports as a great vehicle for delivering our marketing messages. They have a lot of credibility. But if there's a big change other than just having a stable of endorsers besides Michael, it is much less athlete-as-hero and more about the athlete being able to deliver powerful brand messages rather than being the message itself."

Nonetheless, Gatorade will continue to leverage the old and the new. Jordan will appear, in a Chicago Bulls uniform, on millions of bottles of Gatorade to be sold in China starting this spring. Holdsclaw and Carter will appear on POP in a forthcoming vending machine that will deliver free T-shirts inside otherwise empty vending machine bottles. An accompanying sweeps offers licensed product and the chance to get Holdsclaw or Carter to appear at your school as prizes.

Perhaps the most intriguing thing about that change is that it comes from a brand that, under Schmidt, invented much of the inventory that is commonplace in sports marketing today. Would ABC and the College Bowl Alliance have been able to sell signage on sideline coolers to Charles Schwab if Gatorade hadn't shown their value years earlier?