More than Water Alone: Sports Drinks a New Staple for Indonesian Consumers

On a global level, the sports drinks market continues to grow as consumers become more and more concerned with obesity and health risks. The positioning of these drinks is largely sports-driven, making it attractive for those seeking post work-out refreshments or merely seeking an association with their favourite athletes. Such marketing, while effective in promoting the benefits of sports drinks, fails to extend the category to drinking occasions outside of exercise. But in many markets, athletics and workout cultures are not as influential in beverage decisions. Such is the case in Indonesia, where sports drinks brands such as leader Pocari Sweat by Otsuka Holdings Co Ltd have leveraged a youthful consumer base, warm climates, and changing lifestyles to make “sports drink” “every day” drink.

The specialised sports drink

The sports drinks market has seen its share of ups and downs. Despite being adversely affected by the global recession of 2007-09, as well as increased scrutiny due to the drinks’ sugar content, economic recovery and product reformulations have revived the category. Most notably, global off-trade volume grew by 7.4% in 2009-10 and 8.3% in 2010-11. Much of the recovery in developed markets was due to the introduction of sugar free or lower calorie variations that assuaged many of the concerns regarding sugar intake. Brands have also developed specialised uses, such as PepsiCo’s Gatorade G-series, which has G1 “prime” (formulated with b-vitamins and carbohydrates to fuel the body before a workout); G2 “perform” (with electrolytes for use during exercise), and G3 “recovery” (with protein for use after a workout to rebuild muscle). While such specialised marketing have done well to attract specific consumers, companies may actually be limiting a brand’s market potential with narrowly sports-focused campaigns. Although the decline of sugary carbonates is due in part to consumers making healthier choices, it does not mean that a majority of buyers are also training for marathons. And, while a health conscious consumer is more likely to pay premiums for performance beverages, this type of positioning does little to entice the average consumer seeking day-to-day refreshment. Such is the dilemma of sports drinks: in order to stay relevant with core customers, performance must be emphasized. But to attract casual purchasers, taste, refreshment, and convenience play a much larger role.

Taking the sport out of sports drink

This quandary does not exist for Indonesia, where sports drinks were the fastest growing soft drinks category from 2006-11 with 194.6% growth in terms of off-trade volume. Sports drinks are the fifth most consumed beverage in the country with 330.3 million litres in 2011, behind bottled water, Asian specialty drinks, RTD tea, and carbonates. Removing bottled water, sports drinks represent over 12% of all soft drinks consumed, and ranks the nation fourth in the world in off-trade volume terms. The strength of the category is due to many factors, but, most notably, manufacturers have been able to leverage the nascence of the product to specifically meet the day-to-day needs of Indonesians, thereby increasing drink occasions.

Straddling the equator, Indonesia has a tropical climate characterized by high humidity and high temperatures. Summer temperatures can average as high as 33° C (91° F). Combine this with 82% humidity and hydration becomes an essential part of beverage decisions. This climate has made on-the-go cold drinks such as bottled water and bottled RTD tea important categories. But it also set the stage for sports drinks, which are fortified with the electrolytes and carbohydrates often lost through sweat via simple activity, not just exercise.

With this warm weather as a backdrop, manufacturers were able to position sports drinks as a more effective hydration system. And because sports drinks had not really made an impact on the market before 2002, key companies could dictate how the drinks would be perceived. With that in mind, Otsuka Holdings Co Ltd’s Pocari Sweat presented a brand in stark contrast with the world view of sports drinks. Unlike global leaders Gatorade and Powerade (both available in Indonesia), Pocari was not married to the concept of “sports” being a necessary tie-in with “sports drink”.

Instead of employing athletes to endorse the product, Pocari Sweat signed deals with Indonesian models such as Aelke Mariska or Jakarta based teenage girl pop band JKT48, and featured these artists enjoying the drink while riding bikes around town or hanging out on the beach. The decision to move away from traditional sport endorsements paid off two-fold: (1) it resonated with young adults, teenagers and children – key consumers of sports drinks; and (2) it showcased the drink as part of daily hydration – not just a post workout beverage. As such, sports drinks are an all-occasion beverage, rather than a functional drink tied to a specific activity. The contrast in this positioning is best exemplified by number two brand and leading competitor to Pocari Sweat: Mizone by Danone. In Australia, a commercial for Mizone Forumulated Sports Water states “whether you’re running, mountain biking, climbing or out there just getting active, your body need more than water alone.” Conversely, an Indonesian television ad for “Mizone Active Hydration” centres on an Indonesian office worker using Mizone to “be 100%,” even at the office.

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The composition and look of these drinks also play key role in their appeal to a broader consumer base. Unlike the multitude of flavours and artificial colours of Gatorade, Powerade, and Lucozade, Pocari Sweat and Mizone resemble bottled water in terms of their lack of colouring and packaging. These clean lines help the beverage compete with bottled water, while their sweet tastes provide an alternative to RTD teas. Flavour-wise, Pocari Sweat has been successful with its unique taste (that has been described as “mild grapefruit flavour with little aftertaste”), whereas Mizone produces flavours ranging from “Dazzling Apple Guava” to “Mango Kiwi”. By combining the look and hydration of bottled water with the sweetness of soft drinks, these products are readily consumed for any occasion.

Repositioning in other markets

The unique positioning of sports drinks is not isolated to Indonesia. Although not as successful, Malaysian sports drinks category leader “100 Plus” positions the drink as a normal day-to-day beverage. But, interestingly, almost all sports drinks in the country are carbonated, and positioned in competition with colas. Similarly, a return to more broadly applicable flavours or at least varieties more wildly accepted could help with creating a wider appeal. An inclusive marketing strategy prevents the beverage from being pigeon-holed into one particular niche. This type of marketing is also useful in more conservative societies, where aggressive sports marketing campaigns would do little to reach a coveted female audience. Finally, given that sports drinks are clearly aligned with the idea of “better hydration,” the potential for the beverage in tropical countries cannot be understated. Selling cold beverages in warm climates seems elementary, but by simply broadening the target area, as opposed to narrowing the message could be far more impactful.