PepsiCo’s Gatorade has reached a settlement with Coca-Cola’s Powerade Option, resolving a lawsuit filed last Monday that asked the courts to halt an ad campaign that Pepsi claimed was false and deceptive
Under the terms of the settlement, Coca-Cola has agreed to stop airing one Powerade Option TV spot and modify the language in another, which will be reviewed by the Better Business Bureau’s National Advertising Division (NAD), PepsiCo said. Coke said the ads will continue to run during the National Collegiate Athletic Association men’s basketball tournament, where they debuted last week.
“Our primary concern is to ensure that consumers are accurately informed about the benefits of a functional sports drink, and we are satisfied with Powerade Option’s decision,” said Cindy Alston, VP-equity development and communications for Gatorade.
The lawsuit centered on a TV ad for Powerade Option entitled “Drag Race,” that shows a horse-drawn cart race between two farmers. One cart carries 10 bales of hay and the other carries 50. The cart with 10 bales easily beats the other and the ad touts that Powerade Option has 10 calories versus Gatorade’s 50 calories. The suit claimed that the message to consumers is that Powerade Option’s fewer calories make you go faster cannot be substantiated (Xtra, March 22). Atlanta, GA-based Coke said it would modified its campaign to make clear the Powerade Option has both fewer calories and less carbohydrate energy than Gatorade, Pepsi said.
“As the No. 2 player, we want to set ourselves apart from the category, but we want to compete in the marketplace, not in the courtroom,” said Gloria Garrett, VP-hydration for Coca-Cola North America, in a statement.
Gatorade is No. 1 in the sports drink category, with a nearly 80% market share, Purchase, NY-based Pepsi said.
Last August, NAD took a case brought by Gatorade against Powerade Option related to comparative TV ads by Powerade that said that “No leading sports beverage provides…faster absorption than Powerade” among other issues. NAD recommended that the commercials be modified to avoid conveying an unsupported implied message that drinking Powerade will increase strength.
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