Things really do go better with Coke – if you are an investor. While world stock markets have suffered the worst January in decades and the S&P 500 index declined 7.3% in the last 12 months, shareholders of Coca-Cola have managed to achieve a modest one percent gain over the same 12 month period. That is thanks to a 3.2% dividend payout – and a win-win sports sponsorship strategy that has helped revenues to grow in a mature industry. The key to success is sports science with a focus on hydration science.
Both amateur athletes and professionals need to keep well hydrated to perform well and maintain the physical condition needed to continue playing sports. Recent studies are making the case that the optimal volume of quality beverages is high enough to sell millions of cases of bottled beverages. Extra hydration before, during and after physical activity is essential to replace body fluids which decline when sweat is produced and main blood plasma production at optimal levels.
Dr. Fernando Gianini recently published an advice column for serious cyclists with specific guidelines that are similar to recommendations from the Gatorade Sports Science Institute. As both Gatorade and Powerade (the Coca-Cola brand sports drink) point out to consumers, water alone is not enough. The body loses significant amounts of sodium and potassium with increased physical activity and modest quantities of glucose can supports additional energy creation.
Widely accepted guidelines from these sports science experts are to consume at least one quart of a sports beverage in the two hours before physical exertion and 7 ounces during each 20 minutes of exercise. Re-hydration is also essential, with greater quantities recommended for athletes having larger bodies, usually at least on quart per workout.
The most recent formula of Powerade features the ION4® Advanced Electrolyte System. Coca-Cola’s sports science experts say this series helps replenish four electrolytes lost in sweat. Powerade is formulated with a 6% carbohydrate solution to help provide energy to working muscles, and vitamins B3, B6 and B12. After Powerade Zero was introduced, sales quickly grew at a double digit pace. Sales growth for Powerade products and bottled water marketed by Coca-Cola have now plateaued closer to eight percent a year. That is impressive considering that the growth rates for sparkling beverages are actually flat.
Coca-Cola is well positioned for future growth with relevant sports sponsorships. According to IEG, Coca-Cola invested a total of $295 million in sports sponsorships in 2013. It is the exclusive beverage category sponsor for the Olympic Games and actually supplies the athletes’ village facilities with beverages. Coca-Cola also sponsors the FIFA World Cup, Rugby World Cup, and hundreds of individual tournaments. As the sports community continues to spotlight the importance of effective hydration, Coke’s sports sponsorships will reap healthy dividends.