NEW YORK: Coca-Cola has acquired a minority ownership stake in red-hot American sports drink sports brand BodyArmor, the ultimate aim being to make a dent in the overwhelming dominance that rival PepsiCo’s Gatorade has in the high value segment.
Coke’s own Powerade trails far behind Gatorade, which has controlled the nearly $8 billion US sports drink industry for decades, grabbing about 75% of the market, according to research firm Euromonitor International.
As per the agreement, BodyArmor will have the opportunity to gain access to the expansive Coca-Cola bottling system, enabling the fast-growing brand to accelerate its growth to meet explosive consumer demand for its premium line of sports performance and hydration drinks.
The initial investment is uniquely structured to create value for both companies and allow Coca-Cola to increase its ownership stake in the future under defined terms. It will be part of the Coca-Cola North America Venturing and Emerging Brands (VEB) investment portfolio. The company will be the second largest shareholder in BodyArmor after its co-founder and chairman Mike Repole. As a result, the latter’s management team and name will be retained.
Repole has developed a major reputation in co-founding and incubating other brands including smartwater and vitaminwater, which were sold to Coke in 2007 for $4.1 billion, according to an ESPN report.
“BodyArmor is revolutionizing the beverage industry by providing the hydration that more and more of today’s athletes want and need. We are confident that this agreement gives us the best opportunity to significantly accelerate our mission to make BodyArmor the world’s best premium sports performance and hydration brand. 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.” he said.
BodyArmor has forged a major connect amongst more than a dozen top NBA superstars as well such as James Harden, Dustin Johnson and Andrew Luck who have equity stakes of $1 million each according to ESPN. Kobe Bryant, the now-retired legend of the game, had put in an initial investment of $6 million in the brand in 2013. This will skyrocket to nearly $200 million now courtesy the Coca-Cola deal. His overall worth will reportedly jump up to around $650 million as well.
For a contemporary athlete, Bryant’s return-on-investment (ROI) is said to be the biggest in world sport in recent years. The previous one was Le Bron James and his business partner, Maverick Carter’s combined $1 million investment in pizza chain, Blaze in 2012 which is now valued at $40 million.
The Coca-Cola, BodyArmor deal is also widely considered to be amongst the highest valued of this millennium so far when it comes to sports drinks, eclipsing rival Pepsi’s acquisition of Gatorade back in 2000.
As a result, BodyArmor’s sales will also rise significantly to an estimated $400 million by the end of the year as compared to $10 million five years ago.
