PBG’s Muscle Milk pickup a message to Pepsi?

and Matt Casey

Over the past year, Muscle Milk has evolved into the standard-bearer for protein-enhanced drinks. So when the Pepsi Bottling Group announced late last week that it had nailed down distribution rights to the fast-growing shake, it represented something of a coup.

It might also represent something else: an intentional dent in the fender of its big brother and chief supplier, PepsiCo, as part of an ongoing turf war over non-carb “hydration” products, particularly Gatorade.

PBG has long coveted access to Gatorade, which has nevertheless remained in distribution largely through a warehouse system developed under the Quaker Oats company long before it was purchased by PepsiCo in 2001. Bottlers in the “Pepsi System,” including PBG, were supposed to be satisfied with their rights to the new Gatorade product G2, but the jury remains out on the ability of that product to excite consumers.

Having a bottler nudge its namesake manufacturer isn’t unprecedented – Coca-Cola Enterprises sent a message to the Coca-Cola Co. a few years ago when it opened its doors to new brands like Rockstar Energy Drink. In that case, the message to Coke from CCE was “innovate!” (something Coke did by adding new brands via acquisition). In this case, however, the message appears to be “share the wealth.”

That’s something that PepsiCo appeared to be getting ready to do last month at the National Associaion of Convenience Stores. There, PepsiCo was displaying mock-up bottles of a protein-enhanced FrankenGator called “Gatorade: Be-Strong.” But with Gatorade’s poor track record for expanding beyond hydration – and its inconsistent behavior with regard to giving all of its products to Pepsi bottlers like PBG, the Muscle Milk pickup seems to indicate that the big distributor is attempting to address a need for product diversity that it doesn’t believe its big brother plans to help it with.

Pete Brace, Gatorade’s director of public relations, said his brand plans to deliver innovation, but he isn’t ready, just yet, to say how. “We’ll be sharing more specifics about our 2009 innovations in the weeks to come,” he said in an email response to BevNET’s inquiries. And word about those innovations – even the ones available for public display at NACS – sure doesn’t seem to have filtered to PepsiCo’s bottlers.

In fact, PBG spokesman Jeff Dahncke said he wasn’t even aware of Be Strong when BevNET contacted him. Nevertheless, he referred questions about Gatorade products to Gatorade and said that the relationship between Pepsi and PBG “has never been stronger.”

Maybe so, but as any gym rat will tell you, when it comes to increasing strength, one of the key building blocks is. protein.