The Coca-Cola Company (KO - Free Report) plans to fortify its Powerade sports drink brand with the introduction of Powerade Ultra and Powerade Power Water. This marks the company’s first additions to the brand in over a decade, after the launch of Powerade Zero in 2007. While Powerade Ultra is scheduled to be launched this month, Powerade Power Water will be rolled out in mid-February.
Powerade Ultra is the first ready-to-drink beverage, which includes shelf-stabilized creatine, amino acids, vitamins B3, B6 and B12 as well as 50+% more ION4 electrolytes as compared to regular Powerade drinks. In fact, Coca-Cola North America’s R&D team took six months to finalize the formulations for the product, with stabilized creatine. The drink will be available in the Mixed Berry, White Cherry and Citrus Blast flavors.
Meanwhile, Powerade Power Water comprises ION4 electrolytes and vitamins B3, B6 and B12. It will be available in three flavors – Berry Cherry, Tropical Mango and Cucumber Lime.
The recent additions to the Powerade brand are driven by changing consumer preference toward natural and organic products. Consumers are now on the lookout for sports drinks that contain natural ingredients like natural sweeteners. Powerade’s latest offerings are likely to meet these preferences in addition to its zero-sugar content.
Further, Coca-Cola’s investments in the Powerade sports drink brand might pose tough competition to PepsiCo’s (PEP - Free Report) Gatorade, which is the leading sports drink brand in several markets.
Coca-Cola’s consumer-centric innovation, solid core brand performance and improved execution in the marketplace have been cornerstones of its success. Innovation, and investing in core categories and brands have been the key focus areas for Coca-Cola, given the evolving beverage industry. This mantra extends to all business aspects, ranging from massive categories like hot beverages to emerging ones like Kombucha.
For example, innovation at the Coke brand helped it accelerate global retail value growth by 6% in the first nine months of 2019. However, the company’s innovation strategy is not focused on the Coke brand alone. It is witnessing strong performance across key geographies through innovation and sustained investment in the challenger and explorer brands. These investments led to significant market share growth of the smartwater brand in India, Authentic Tea House brand in China and Southeast Asia, Fuze Tea in Western Europe, and Chi (a leading value-added dairy and juice brand) in West Africa.
We note that Coca-Cola boasts a solid portfolio of more than 500 sparkling (carbonated) as well as still (non-carbonated) beverages like water, enhanced water, juices and juice drinks, ready-to-drink teas and coffees along with energy and sports drinks.
In the past six months, shares of the Zacks Rank #3 (Hold) company have gained 9.2%, outperforming the industry’s 5.2% growth.
Beverage Stocks to Consider
Constellation Brands, Inc. (STZ - Free Report) has an impressive long-term expected earnings growth rate of 8.2% and a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Luckin Coffee Inc. (LK - Free Report) , also a Zacks Rank #2 stock, delivered a positive earnings surprise of 13.5% in the last quarter.
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