US – The BBB National Programs’ National Advertising Review Board (NARB) recently affirmed a recommendation for The Coca-Cola Co. to modify its Powerade sports-drink marketing material, responding to complaints filed by PepsiCo, the manufacturer of rival Gatorade.
This decision follows a previous ruling in August from the National Advertising Division (NAD), which suggested that Coca-Cola should “modify or discontinue” certain claims made about Powerade.
The NAD specifically challenged Coca-Cola’s assertion that Powerade had “50% more electrolytes vs. the leading sports drink,” contending that it exaggerated the significance of the nutrient difference.
According to the NAD, this claim conveyed an implied message that Powerade offered superior performance and hydration compared to Gatorade.
While Coca-Cola contested the NAD’s ruling, the NARB upheld the recommendation, advising the beverage giant to avoid implying that Powerade provides a substantial increase in electrolytes, better performance, or superior hydration compared to Gatorade.
To address clarity issues, Coca-Cola was asked to revise its claim to “50% more electrolytes vs. Gatorade Thirst Quencher.” This adjustment aligns with the NARB’s emphasis on accurate and transparent information for consumers.
The NARB’s scrutiny extended beyond packaging and advertising slogans to include a Coca-Cola social media post featuring the “strong arm” emoji, which the board deemed misleading in suggesting that Powerade makes consumers stronger than Gatorade.
Additionally, several video advertisements were flagged, leading to a request for modification, although Coca-Cola noted that those specific promotional materials were no longer in use.
This regulatory intervention comes at a crucial time for both Coca-Cola and its competitors in the sports-drink market. The company’s Q1 and Q2 2023 results revealed declining volumes for both Powerade and Bodyarmor in the US, contributing to an overall 3% decline in sports-drinks sales globally.
Coca-Cola acquired the 85% of Bodyarmor in November 2021 for $5.6 billion. Powerade, the Coca-Cola brand that has long been a distant second to Gatorade, was then placed under the management of Bodyarmor’s leadership.
In contrast, PepsiCo CEO Ramon Laguarta expressed confidence in Gatorade’s prospects, attributing the dip in volumes for the North America drinks arm to new competitors like Prime.
Laguarta acknowledged the impact of these new entrants on Gatorade, particularly with younger audiences, but emphasized that the effects were more pronounced on other brands in the category.
The ruling comes a while after the giant beverage company was earlier accused among other companies of making misleading commercial claims about the recyclability of their water bottles.
The key points of concern pointed out were the terms “100% recyclable” and “100% recycled” used on plastic bottles which according to the corresponding unions, are factually incorrect.
As regulatory bodies continue to scrutinize advertising practices, beverage companies must navigate these challenges to maintain their market positions and consumer trust.
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