The Wall Street Journal is reporting that Element 79 is on the ropes after seeing its biggest accounts–PepsiCo’s Gatorade and Tropicana–walk out the door.
PepsiCo has been dissatisfied with Element 79′s recent creative work, according to a person familiar with the matter. The company is shifting its Gatorade business to a sister Omnicom agency, TBWA/Chiat/Day, and ad responsibilities for Tropicana also are being moved within the ad-holding company, to Arnell Group.
But creative is not the sole problem for these brands. Despite being the market leader in the sports-drink category, with a roughly 80% share, Gatorade’s growth has slowed, thanks in part to the growing popularity of water and fortified waters. Meanwhile, sales of Tropicana juices and juice drinks have sagged as PepsiCo raised prices to offset rising costs.