Two weeks ago, Quaker rejected a $14.8bn takeover bid from PepsiCo as "insufficient".
Sales of carbonated soft drinks like Coke and Pepsi are weakening as consumers are presented with greater choice.
In the non-fizzy sports drinks market in the US, Gatorade dominates with a 75% share.
'Promiscuous'
John Sicher, editor of industry newsletter Beverage Digest, said: "I think that what we're seeing now is Coke and Pepsi realising that the American consumer's taste is becoming more promiscuous.
"If they are the big beverage companies, they need to play aggressively in every category that now exists and may exist in the future."
Last month, PepsiCo agreed to buy a majority stake in South Beach Beverage Co - which makes SoBe-branded fruit, energy and tea drinks - for about $370m.
Coca-Cola had spent months trying to work out its own deal for SoBe but said it had eventually rejected it for financial reasons.
Here comes Cadbury's
Also last month, Cadbury Schweppes bought the Snapple Beverage Group from Triarc for $910m, expanding its presence in the US where it already markets Dr Pepper and 7-Up.
Other drinks makers thought to be in line for takeover include Arizona Beverage Co, Nantucket Nectars and Ocean Spray Cranberries.
According to Beverage Digest, Gatorade controlled 73% of the US non-fizzy sports drinks market in 1999, followed by Coke's Powerade (15%) and Pepsi's All-Sport (6%).
Deep pockets
Analysts have said a raised bid from PepsiCo is possible but Coca-Cola is being seen as better placed to secure a deal.
Caroline Levy, of UBS Warburg in New York, said: "Coke is in a position to pay much more than Pepsi."
However, Tom Burnett, president of research service Merger Insight, said: "The market is saying Coke is in danger of overpaying, and Pepsi is the lucky one."
If Coke does get control of Gatorade, it will probably have to sell Powerade to satisfy anti-trust concerns.
Best-known for its cereal brands, Quaker has posted double-digit profit gains 11 quarters in a row, largely as a result of the success of its beverages.
However the news of the bid has not pleased investors, who fear that Coke's owner may pay too much for Quaker - this led to the drink giant's shares falling 1.3 to 55.25 on Tuesday, following Monday's 9% fall.