Coke, Pepsi Resolve Ad Dispute

NEW YORK PepsiCo’s Gatorade said it reached an out-of-court settlement with Coca-Cola late yesterday over a disputed commercial for Coke’s Powerade Option sports drink. Terms of the agreement were not disclosed.

The settlement followed Coke’s move to pull the ad in question and modify the language of a second spot.

“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,” Cindy Alston, vice president of equity development and communications at Gatorade, said in a statement.

The disputed ad, which launched last week during TV coverage of the NCAA March Madness men’s basketball tournament, depicted the 10-calorie Powerade Option as superior to Gatorade, using two Amish farmers pulling bales of hay. Gatorade has 50 calories.

PepsiCo had filed a lawsuit in federal court in Chicago and asked for a temporary restraining order regarding the disputed ad [Adweek Online, March 21].

Gatorade commands close to 80 percent of the sports drink category while Powerade has 18.6 percent, according to Beverage Digest, Bedford Hills, N.Y.

Gatorade spent $180 million on ads last year while Powerade spent less than $20 million, per Nielsen Monitor-Plus. Omnicom Group’s Element 79 in Chicago is Gatorade’s lead shop. Powerade works mainly with independent shop Wieden + Kennedy in Portland, Ore.

Powerade Option also agreed to modify a second commercial, called “Laces,” with respect to the carbohydrate calorie content and relative energy benefits of the two products.

“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, vice president of hydration at Coca-Cola North America. “We have agreed to modify the commercials to be clearer that Powerade Option has both fewer calories and less carbohydrate energy than Gatorade.”

—Brandweek staff report

This story updates an item posted on March 21 with news of the settlement.