The Coca-Cola Co. adds another product to its investment portfolio. The beverage company has recently acquired minority ownership of BodyArmor, a sports drink that will now have access to Coca-Cola’s bottling system. This move will enable BodyArmor “to accelerate its growth to meet explosive consumer demand for its premium line of sports performance and hydration drinks.”
BodyArmor is similar to Powerade and Gatorade in regards to electrolytes and hydration. However, BodyArmor uses coconut water, has more potassium, less sodium and is marketed as a more natural sports drink. The beverage doesn’t use artificial colors or high-fructose corn syrup.
BodyArmor was first launched in 2011 out of Queens, New York. The co founder, principal investor and chairman, Mike Repole, also took part in creating Glaceu which made vitaminwater and smartwater. Glaceu would go on to be acquired by Coca-Cola in 2007 for $4.1 billion.
The investment creates value for both of the companies and under defined terms, allows Coca-Cola to raise their ownership in the future. BodyArmor is predicted to bring in $400 million in revenue this year. Due to recent beverage industry deals, the company is also valued in the $1 billion – $2 billion range.
The investment will also make Coca-Cola the second largest shareholder of BodyArmor which was previosuly held by Coca-Cola competitor, Keurig Dr Pepper Inc., which still has a distribution deal.
According to someone who is familar with the deal, BodyArmor plans to end their distribution agreement with Keurig Dr Pepper Inc. There is no word as to whether the company will keep its stake in BodyArmor.
“In a fast-moving and dynamic industry, and during a time of unprecedented change at Coca-Cola, we’re challenging the status quo and bringing innovative, boundary-less thinking to our strategic relationships to ensure we are offering the products consumers want,” said Jim Dinkins, President of Coca-Cola North America. “BodyArmor is one of the fastest-growing beverage trademarks in America and competes in exciting categories. I have no doubt it will prove to be a strong offering to our system alongside our already powerful hydration portfolio as we accelerate our position as a total beverage company.”
The investment made into BodyArmor is going to be part of Coca Cola’s Venturing and Emerging Brands investment portfolio in North America.
Repole is confident that the agreement between the companies will accelerate BodyArmor to become the “world’s best premium sports performance and hydration brand”. Repole would go on to say the following.
“This is thanks to the strength and scale of Coca-Cola’s newly refranchised and energized bottling system in North America, as well as longer-term opportunities for international growth.”
Consumers tend to spend more money on energy drinks, teas and enhanced bottled waters, putting the sports drink category under pressure. Although they haven’t been big sellers, Gatorade responded to the pressures by adding the low calorie G2 and G Organic to their brand. PepsiCo would go on to start selling the sugar free Gatorade Zeros.
Coca-Cola has had a hard time over the decades as Gatorade has dominated Powerade and the Honest brand organic sports drinks. Coke has been trying to diversify its product offering outside of sugary sodas and plans to market BodyArmor as a premium drink above Gatorade.