Following rumours last week, Coca-Cola confirmed yesterday that it has reached an agreement to purchase the remaining 85% stake in sports drink maker BodyArmor it did not already own for $5.6bn.
The deal marks a shift in strategy for the world’s largest beverage maker. It has been streamlining its product portfolio in recent times to focus on its fastest-growing beverages. The company discontinued its own Coca-Cola Energy drink in North America in May, but retained its majority stake in Monster Beverage, one of the top energy drink makers in the US.
BodyArmor markets itself in the US as an electrolyte-filled energy recovery drink for athletes and currently makes about $1.4bn in annual retail sales, with a 50% growth rate. It is currently the number two sports drink in the category, behind PepsiCo’s Gatorade brand.
BodyArmor was launched in 2011 by Lance Collins, founder of Fuze Beverage and NOS Energy Drink, and Mike Repole, co-founder of energy brands Vitaminwater and Smartwater. In March 2013, the late basketball player Kobe Bryant purchased a large stake in the company, becoming the third-largest shareholder, a position that his widow Vanessa still holds.
In the summer of 2018, Coca-Cola purchased a 15% stake in the company to position BodyArmor as a premium sports drink above its own Powerade brand. BodyArmor has since secured several major sport sponsorship deals in the US.
“It gives Coke a strong stable of products in the rapidly growing sports hydration category. It’s a nice premium brand that has an opportunity for expansion over time,” said Edward Jones analyst John Boylan.
Coca-Cola revealed that BodyArmor will be managed as a separate business within its North America operating unit and will continue to be based in New York. The brand’s co-founder Mike Repole and President Brent Hastie will also remain with the business to support its development plans.
“BodyArmor has been a great addition to the system lineup over the last three years, and the company has driven continuous innovation in hydration and health-and-wellness products,” said Alfredo Rivera, president of the North America operating unit of The Coca-Cola Company.
“We’re excited to bring BodyArmor into The Coca-Cola Company and work with Mike Repole and his leadership team on the next stage of growth.”
As part of the agreement, Coca-Cola and Repole will also collaborate on the company’s still beverages portfolio, including marketing, packaging and innovation across multiple brands.
