The Coca-Cola Company has bought a small but undisclosed stake in New York-based sports drink maker "Bodyarmor SuperDrink" as part of a renewed sports drink war against rival PepsiCo and its market-leading sports drink, Gatorade.
Coca-Cola didn't reveal the investment amount or the terms of the deal, which will make it the company's second-largest shareholder. Before Coca-Cola's buy-in, NBA superstar Kobe Bryant was the company's third-largest shareholder. Bodyarmor SuperDrink's largest shareholder remains its co-founder and chairman, Mike Repole.
Coca-Cola and Repole, however, go a long way back as business partners. Repole co-founded the company Energy Brands, which was acquired by Coca-Cola in May 2007 for $4.1 billion. Among the products sold by Energy Brands are smart water and Glaceau Vitaminwater.
In a statement, Coca-Cola said Bodyarmor will remain an independent company and gain access to Coca-Cola's massive bottling and distribution system. Coca-Cola North America President Jim Dinkins said Bodyarmor competes Coke's wide range of fast-growing sports performance and premium hydration categories, which are much larger than sports drinks.
Dinkins said Coke North America's hydration portfolio consists of Powerade, Vitaminwater, Smartwater, and Dasani.
Coca-Cola sees BodyArmor's range of low-calorie drinks as ideal for exploiting the American consumers' increasing distaste for sugary drinks such as those marketed by Gatorade, which is owned by Coca-Cola's arch-rival, PepsiCo.
Gatorade controlled 71 percent of the sports drink market in the USA in 2015. Powerade, which is Coca-Cola's sports drink brand, accounted for some 19 percent while BodyArmor had a share described as negligible back then. By 2017, Gatorade controlled some 75 percent of the nearly $8 billion U.S. sports drink industry, according to research firm Euromonitor International.
Gatorade's 2017 sales, however, was 0.5 percent lower than 2016 while its market share also declined. Analysts said this drop was likely due to American consumers seeking healthier options such as low-calorie drinks or fruit juices. Powerade also lost market share in 2017.
Gatorade recently launched a sugar-free drink for the first time in its history in response to this change in consumer buying behavior.
In Coca-Cola's favor is BodyArmo's range of low-calorie drinks using natural sweeteners, natural flavors, and coconut water. BodyArmor also infuses its bottled water with electrolytes and vitamins like potassium and calcium. BodyArmor drinks come in flavors like peach mango, blueberry pomegranate, and orange citrus.
Bodyarmor SuperDrink was founded in 2011 by Lance Collins, who established Fuze Beverage and NOS Energy Drink and Repole.
