ATLANTA — The Coca-Cola Co. has entered into a definitive agreement to acquire a minority ownership stake in sports drink brand BodyArmor. Coca-Cola may increase its ownership stake in the future under the terms of the agreement.
BodyArmor will join the Coca-Cola North America Venturing and Emerging Brands investment portfolio. The brand will continue to operate independently under the leadership of Mike Repole, co-founder and chairman, and the BodyArmor management team. Coca-Cola will become the second largest shareowner in the brand, behind Mr. Repole.
"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.” — Jim Dinkins, Coca-Cola North America
“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.”
Founded in 2011, BodyArmor is positioned as a premium alternative to conventional sports drinks brands such as PepsiCo's Gatorade. The products contain no artificial colors or flavors and feature potassium and other electrolytes, vitamins and coconut water. The agreement gives BodyArmor access to Coca-Cola's expansive bottling system.
Mr. Repole previously co-founded brands including smartwater and vitaminwater, which joined the Coca-Cola portfolio in 2007.
“I am extremely excited about this agreement because the Coca-Cola system has an amazing track record of growing explosive brands that consumers love and allowing entrepreneurial start-ups like BodyArmor to continue to be independent and focused on achieving the aggressive growth goals that we set out to achieve when we launched this amazing brand in 2011,” Mr. Repole said.
Previously, BodyArmor was distributed by Dr Pepper Snapple Group, which in 2015 acquired a $20 million stake in the company. The Dr Pepper Snapple Group recently was acquired by JAB Holding Co., Luxembourg, through its Keurig Green Mountain business unit.
“Sports drinks volumes were flat last year in the U.S., as both of the big two brands (Gatorade and Powerade) have struggled to evolve and reach consumers eager for natural isotonic alternatives,” said Howard Telford, head of soft drinks at Euromonitor International, Chicago. “The one real exception in an otherwise flat category has been Body Armor, a brand that has had success blending the athletic positioning of sports drinks with a more ‘natural’ coconut water-based product.
“From Coca-Cola’s perspective, it will be interesting to see how this minority investment in Body Armor impacts their approach to the sports drink/isotonic category in the near future. Powerade is a direct competitor of Body Armor on the shelf, but this ‘natural athletic hydration’ space is also potentially occupied by Zico coconut water and Honest (through the Honest Sport launch 2 years ago), both Coca-Cola V.E.B. brands.”