Since its inception in 1965 Gatorade has had a complete hold on the sports drink market. Gatorade had gone largely unchallenged except for a few small regional competitors. In 1990 Coca-Cola, realizing the control that Quaker Oats Co.'s Gatorade had on the market, decided to launch it own sports drink named PowerAde. PowerAde started as a fountain product that was primarily distributed in convenience stores. This distribution strategy differed from the bottle and concentrate powder strategy of Gatorade. The launch of PowerAde was looked at as an extremely risky move on Coca-colas part because of the virtual dominance of Gatorade in the isotonic, sports drink market. Michael Bellas, president of Beverage Marketing Corp., acknowledged that up until PowerAde's entrance into the market, Gatorade was almost a generic term for sports drinks. In 1990 Gatorades market share was close to 90% or 500 million in sales.
Before the successful launch of PowerAde, Coke failed in its first attempt into the sports drink market. They first challenged Gatorade with a powdered form sports drink called Max. This product failed to even get out of the test market. Coke was more confident in PowerAde's introduction than previous failures because of its successful test market run in California, and its early launch in Japan under the name Aquarius. Another key factor that Coke looked at in its launch of PowerAde was its stronghold on the fountain drink industry. Coke believed that strong relationships and loyalty from its fountain accounts would help drive sales of PowerAde. Coke miscalculated the U.S. markets desire to drink sports drinks during active competition. Even though Coke never had any plans of bottling PowerAde in cans or bottles, they soon realized that bottles are the preferred method of consumption for U.S. consumers of sports drinks.
PowerAde's gain of market share in the U.S. isotonic drink market was slow, but by 1999 they were estimated at holding a 15% share of the market.