Pedialyte Finds New Market Niche: Binge Drinking College Students

Drink for children now popular as a hangover cure; sales increase 16%

   

Pedialyte Finds New Market Niche: Binge Drinking College Students

Abbott Laboratories‘ (ABT) Pedialyte — an anti-dehydration drink for children suffering from diarrhea — may have tapped into a whole new consumer market: college students who are using it as a hangover cure.

The trend has taken off as news has spread across social media outlets (and college newspapers) by students touting its effectiveness in lessening the impacts of heavy drinking the next morning. The drink contains electrolytes and similar ingredients to Gatorade, and acts in much the same way, minus the sports drink’s sugar content.

And now Pedialyte is seeing a sales boost because of it.

From the Chicago Grid:

Domestic sales for the pediatric nutritional drink jumped almost 16 percent in August from the same month a year ago, according to market research firm IRI. The increase is notable not just for its magnitude, but because sales had been nearly flat for years. In 2012, they grew just 2.9 percent, barely keeping pace with inflation; in 2011, year-over-year sales for Pedialyte actually dropped.

Such growth is rare in an established product line, when sales tend to keep pace with GDP — around three percent growth annually, says Debbie Wang, an analyst for Morningstar who covers Abbott.

It’s so popular now that Foxtrot — the delivery app catering to college students that allows ordering of booze and hangover remedies like Advil — is now adding to its service options because of customer demand.

“When I came to [University of Chicago’s] Booth to start business school, I noticed that everybody talked about it, or had it in their fridge,” says Foxtrot co-founder Brian Jaffee. “It’s super prevalent. I’ve noticed that it’s really gotten even more popular over the last twelve months. It went from like a funny thing to talk about to the norm. Almost everybody uses it.”


Article printed from InvestorPlace Media, http://investorplace.com/2013/10/pedialyte-finds-new-market-niche-binge-drinking-college-students/.

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