Beverage giant Coca-Cola has reportedly purchased a minority stake in BodyArmour, an independently owned sports drink. As per sources, the company’s aim behind the acquisition was to challenge PepsiCo’s Gatorade.
Coca-Cola, currently battling a slump in the demand of its trademark fizzy drink, will have much to gain from this investment, as it would reportedly make the company BodyArmour’s second-largest shareholder. The investment is a part of Coca-Cola’s move to compete against Gatorade, which is currently experiencing a surge in demand post the launch of its zero-sugar version.
According to industry experts, Pepsi’s other sports drinks including Gatorade equals almost a third of the $20 billion worth U.S market, followed by Red Bull and Monster Beverage, in which Coca-Cola owns a stake of 16 percent.
Mike Repole, Co-founder, BodyArmour was quoted saying that the brand commenced with a consumer first approach and a goal to develop a premium sports drink that didn’t exist. He further added that the demand for the brand was first built, post which it was taken to retail, after which it began to sell.
As per ABC News, this is the second time when Repole has struck a deal with Coca-Cola. Back in 2007, Glaceau – the company that he co-founded with the vitaminwater and smartwater brands, was purchased by the beverage firm for $4.1 billion.
Incidentally, BodyArmor is backed by NBA star Kobe Bryant who bought a 10% stake in the brand back in 2014. Post Coke’s investment Bryant’s initial $6 million financing will shoot up to $200 million.
Apparently, Bryant isn’t the only athlete to invest in BodyArmour. The company’s list of endorsers includes Baseball player Mike Trout, WNBA star Skylar Diggins-Smith, and another NBA star James Harden.
It would not be surprising if Coca-Cola ultimately acquires the remainder of BodyArmor, claim analysts.
Financials of the investment have not been disclosed, but Coke admits it could increase ownership, cite sources.