Coca-Cola has acquired minority ownership of BodyArmor, a sports drink company.
The agreement will grant BodyArmor access to Coca-Cola's bottling and distribution system, a move Duane Stanford, the executive editor of Beverage Digest, a publication on the non-alcoholic beverage industry observes will further accelerate the brand's growth.
“Coke’s backing is likely to accelerate that momentum,” said Stanford via email.
BodyArmor, founded in 2011 and partly owned by former NBA superstar Kobe Bryant, says its on track to reach $400 million in retail sales this year.
Company officials say BodyArmor is a healthier alternative to other sports drinks because it contains lower sodium amounts; has higher levels of potassium; and is devoid of artificial flavors and colors.
“I have no doubt it [the agreement] 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,” said Jim Dinkins, Coca-Cola North America president.
Stanford said the deal, whose details have yet to been publicized, makes BodyArmor a formidable challenger to established brands like Gatorade and Powerade.
Gatorade dominates the sports drink and hydration market, commanding 75 percent of it.
Global sports drink forecasts, according to Orbis Reseach, point to an 8.6 percent growth of the industry between 2018 and 2023 with competitiors Coca-cola and Pespi Co. among the key players in the growth.
The study cites increasing demand for healthier options and a growing interest in sports and fitness as contributing factors to the popularity of sports drinks.
“I am extremely excited about this agreement because the Coca-Cola system has an amazing track record of growing explosive brands that consumers love,” said Mike Repole, co-founder of BodyArmor.
Under the agreement which makes Coca-Cola the second largest shareowner of the brand, BodyArmor will continue to operate independently.
“Deals like this are proving to be a great way for Coke to participate in the best of what entrepreneurs create without controlling them to extinction,” said Stanford.
The latest move by Coca-Cola is in line with the company's efforts to become a total beverage company through rebranding and adding new flavors to its existing portfolio in an effort to attract new customers.
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