Coca-Cola has agreed to buy a stake in BodyArmor, a sports drink company backed by Kobe Bryant. The company made the announcement on Tuesday, August 14 after it reached an agreement with BodyArmor’s board of directors.
Though specifics of the deal were not disclosed per financial terms regarding the share volume and valuation, the agreement will allow Coca-Cola a pathway to full ownership.
Retired NBA star and Los Angeles Lakers legend, Kobe Bryant, is one of BodyArmor’s owners and its third largest shareholder after an initial investment in 2013, which saw him join the board of directors. Bryant took a shot at Gatorade on twitter while congratulating Coca-Cola on buying into the vision of BodyArmor on Tuesday:
Proud of our team at @DrinkBODYARMOR & our new partnership with the @CocaColaCo who believes in our mission of becoming the #1 Global Sports Drink. Thanks @Gatorade, we’ll take it from here… #ObsessedWithBetter https://t.co/fLVnBxWfDE
— Kobe Bryant (@kobebryant) August 14, 2018
Coca-Cola said it was attracted to the upward trajectory of BodyArmor’s sales over the past four years, which it observed was doubling every year. Despite the dominance of Coca-Cola’s Powerade and Pepsi’s Gatorade – two of the sports beverage brands controlling the lion’s share of the market – it was predictable that BodyArmor would be a major threat to those two giants in the near future. The latest investment by Coca-Cola was, therefore, a preemptive move to protect the interest of Powerade and also to be part of BodyArmor’s success.
“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,” said Jim Dinkins, Coca-Cola’s North America president.
One of BodyArmor’s reasons for success has been its ability to distinguish itself as a sports drink with a healthy benefit. The company manufactures its product using coconut water infused with higher levels of potassium and does not include artificial colors as part of its ingredients. It also has a range of flavors that emphasize the use of fruits in its production such as peach mango, blueberry pomegranate, and orange citrus. This edge appealed to consumers with concerns about healthier lifestyles.
The latest deal between BodyArmor and Coca-Cola is a win-win situation for both parties – BodyArmor will leverage on Coca-Cola’s bottling system to increase its production and expand its distribution network, while broadening the market size Coca-Cola has in the beverage market, enabling it to further diminish the exposure of PepsiCo, its age-old rival. Gatorade, PepsiCo’s sports drink, controls about two-third of the total market valued at about $8 billion and the latest investment in BodyArmor is seen as just another chess move by Coca-Cola.