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Coca-Cola acquires remaining stake in BodyArmor sports drinks

Coca-Cola announced it is spending $5.6 billion to acquire the remaining 85% of the sports drink brand BodyArmor that it did not previously own. The Atlanta-based company initially took a 15% stake in BodyArmor in 2018.

This deal is the largest acquisition ever made by the 129-year old company, and according to North American business unit president Alfredo Rivera, “BodyArmor has been a great addition to the system lineup over the last three years.”

According to figures cited in the press release, BodyArmor is the No. 2 sports drink behind PepsiCo’s Gatorade and is growing at a 50% rate year over year. That fast growth has taken BodyArmor from a disruptor brand posting $250 million in sales three years ago, when Coca-Cola took its initial stake in the company, to its current sales figures of $1.4 billion in retail, cited in the press release.

This deal has been in progress for years. When Coca-Cola originally took a minority stake for an undisclosed sum, it did so with the option to fully acquire the sports drink brand at a later date. Then, earlier this year, the beverage corporation announced that it was interested in exercising that option for full ownership.

It is not surprising that Coca-Cola would choose to invest in a brand that ticks the boxes for qualities that consumers are seeking in their beverages. With a focus on hydration, this sports drink brand positions itself as a healthier beverage option thanks to its use of coconut water and focus on sugar rather than high fructose corn syrup. BodyArmor also touts its low sodium and high potassium levels as well as the absence of artificial colors.

Not only is BodyArmor focused on attracting consumers interested in these better-for-you trends, but it also holds a larger portion of the overall sports drink market than Coca-Cola’s own Powerade. According to The Wall Street Journal, Powerade commands 13% of the overall sports drink market compared to the 18% held by BodyArmor. With two powerhouse sports beverages in its portfolio, Coca-Cola has transformed into serious competition for PepsiCo’s Gatorade.

To help chip away at Gatorade’s market share, Coca-Cola will keep BodyArmor operating as a separate business under the guidance of founder and chairman Mike Repole, who was also responsible for founding the blockbuster brands Vitaminwater and Smartwater. Repole wants to create the same disruption with BodyArmor.

"Ten years ago, we set out with a vision to create a better-for-you sports drink with a goal of becoming the No. 1 global sports drink,” Repole said in a statement. And Coca-Cola still has its sights set on reaching the top. BodyArmor will continue to be distributed by the U.S. Coca-Cola bottling system but will now have the beverage company’s total backing and access to supply chain relationships and marketing power that has the ability to further accelerate its growth.

As part of the agreement with Coca-Cola, Repole will also try his hand at collaborating with Coca-Cola’s still beverages portfolio, touching multiple brands.