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Retailers, consumers and prices

Gatorade demand dented by U.S. housing slump


builders11The U.S. housing slump’s impact is well chronicled, but PepsiCo CEO Indra Nooyi said it also has hurt sales of the company’s Gatorade sports drink.

Nooyi — on a conference call with analysts after the maker of Pepsi-Cola and other sodas and Tropicana juices reported a better-than-expected quarterly profit – said she has met with convenience store CEOs who told her the weak U.S. housing market has resulted in fewer construction workers stopping by for sports drinks and other snacks on their way to the job.

“One of the things that used to happen is the construction worker used to pull up with the pickup truck at 6 or 6:30 in the morning, buy six or seven bottles of 32-ounce Gatorade, a few bags of Doritos, throw it in the truck and pull off to the construction site. With housing starts being down as much as they are, that construction worker is not coming through the (convenience store) to pick up that Gatorade and so there’s no question that we have lost that active-thirst occasion related to that construction worker who was toiling in the hot sun.”

Nooyi said the Gatorade franchise will shrink in the short term, but the company is running the business with the long term in mind.