Judge sides with Coke’s Powerade

The lawsuit pits the two largest sports drink brands against each other, although Gatorade continues to dominate the segment. Gatorade accounted last year for 77 percent of U.S. take-home sales in the sports drink segment, according to Beverage Digest. Powerade represented 22 percent of the sports drink segment.

The case has brought to light unflattering aspects about the inner-workings of both sides. The chief scientist for Glaceau, the Coca-Cola division that runs Powerade, Vitaminwater and Smartwater, was against calling Gatorade “incomplete,” according to court documents. She worried it might imply to consumers Gatorade was not a functional sports drink.

In an opinion issued this week, U.S. District Judge John G. Koeltl said Gatorade’s objections to the Powerade ads were weakened because it had “unclean hands.” In the past, Gatorade touted Gatorade Endurance Formula, a version of its drink aimed at elite athletes, for having calcium and magnesium.

“SVC cannot, having jumped on the bandwagon of calcium and magnesium first, now jump off and claim that Coca-Cola must get off too,” the judge said in the order.

Koeltl has yet to rule on the overall case, but he denied this week PepsiCo’s request for a preliminary injunction to stop the ads. In an order, he said the injunction was moot because Powerade had pulled the ads.

He also noted that Gatorade has made similar claims about Gatorade Endurance Formula and had hoped to launch a reformulated Gatorade called “ION+” before it was hit by a calcium shortage.

The ruling follows a review earlier this month by the Federal Trade Commission that also sided with Powerade. The FTC found no issues with Powerade Zero and Option ads, which pointed out these products have fewer calories than Gatorade. The National Advertising Division for the Council of Better Business Bureaus had sided with PepsiCo before referring the issue to the FTC.

The most recent ruling by the federal judge triggered victory statements from both Coca-Cola and PepsiCo .

“This is a complete win for Powerade ION4, the complete sports drink,” Coca-Cola said in a statement. “This brand is energized, and more committed than ever to delivering cutting edge replenishment to sports drink consumers. Our science and marketing teams will continue to push the industry forward, and we won’t let the grandfather of the category make the rules.”

PepsiCo offered a different interpretation.

“We accomplished what we set out to do,” PepsiCo said in its statement. “When we filed our lawsuit, Powerade stopped its overtly disparaging claims against Gatorade in its advertising and told the Court it is changing its labeling. That’s why we filed the lawsuit.”