PepsiCo sues Coke over Powerade ads

Included in the legal filing

Forget cola wars. Could Coke and Pepsi be entering the era of isotonic intrigue?

PepsiCo sued Coca-Cola this week, asking a judge to stop to a Powerade ION4 campaign that the suit said could cause permanent damage to the Gatorade brand.

Coca-Cola has advertised its new product by deriding Gatorade as “incomplete.” The category’s standard bearer, the ads say, contains only two electrolytes while the new Powerade contains four. To stress that message, the ads depict halved bottles of Gatorade juxtaposed with complete bottles of Powerade ION4.

PepsiCo’s Stokely-Van Camp, Inc., the division behind Gatorade, said the campaign violates six state and federal civil laws, including trademark dilution, deceptive practices and unfair competition. Stokely wants the court to stop Coke’s campaign, and force a recall of all Powerade products with labels attached to the campaign. Stokely also asked that Coca-Cola to pay, and claimed that Coke’s assertion that Powerade ION4 is more “complete” is scientifically unfounded.

Neither Gatorade nor Coca-Cola representatives returned calls for comment, but Gatorade issued this statement.

“As the category leader, we have a responsibility to ensure consumers are accurately informed about the benefits of a sports drink. And the truth is scientists say there is no evidence that Powerade ION4 is a more complete sports drink than Gatorade. This claim is complete in only one way – it is completely false.”

Coca-Cola spokesman Scott Williamson told several news outlets that “We stand behind our product and are prepared to defend the role that Powerade plays in hydrating consumers.”

The suit comes at an interesting moment for both parent companies. Gatorade’s sales have been falling, as Powerade has grown both volume and market share, according to Information Resources Inc. Additionally, Gatorade has contended with enhanced waters encroaching on sports drink territory, and PepsiCo recently attacked Coca-Cola’s vitaminwater in Propel ads that pointed out that some enhanced water are “enhanced” with as much as 125 calories per bottle. The TV commercials showed consumers looking suspiciously at clearly identifiable vitaminwater bottles, though the labels were never prominently displayed. No suit resulted from that campaign.