New York (CNN Business)Coca-Cola has acquired sports-drink maker BodyArmor in a bid to steal market share from Pepsico-owned Gatorade. This is Coca-Cola’s largest brand acquisition, according to a company spokesperson.
The beverage giant first took a 15% stake in BodyArmor in 2018. It’s taking control of the remaining part in a $5.6 billion deal, the company said Monday. BodyArmor drinks come in a number of varieties, including a version without added sugar, one with 100 milligrams of caffeine and a zero-calorie sport water. The brand also has some celebrities, such as Jennifer Lopez and Carrie Underwood, in its roster of partners. It counted the late basketball star Kobe Bryant as an early investor.
Coca-Cola has acquired sports drink maker Bodyarmor.Sports drinks are a much smaller market than soda. But the category is “growing at a faster rate,” said Duane Stanford, editor and publisher of Beverage Digest. That makes it an attractive option for soda makers, which have been expanding beyond sugary, sparkling beverages as customers look for options they perceive as healthier.
Research firm Mintel forecasts that sports and performance drinks will be a $13.6 billion market in 2025, up from $10.8 billion in 2020. Read More
Group representing Coke, Kellogg and Campbell Soup has concerns about Biden's vaccine orderCoca-Cola already owns a sports drink brand, Powerade, which is designed to compete directly with Gatorade. Gatorade is the leading sports drink brand by far, with about 65% of the US market by volume in 2020, according to research firm Euromonitor. Both Powerade and BodyArmor trail far behind. But unlike Powerade, BodyArmor has been gaining share in the market. With BodyArmor, Coca-Cola can try to both take share from Gatorade and hedge against Powerade’s losses — if customers switch from Powerade to BodyArmor, that’s still a win for Coke. And the brand could help Coca-Cola chip away at Gatorade’s position, explained Stanford.
“You might see Coca-Cola … using Powerade and BodyArmor to sandwich Gatorade,” Stanford said. With the two brands, Coca-Cola has “an opportunity to siphon off customers from both ends,” he added.Coca-Cola has been rethinking its portfolio during the pandemic. Last year it announced plans to axe 200 underperforming brands, including drinks like Tab, Zico and Odwalla.
Source: edition.cnn.com
