Coca-Cola’s Investment in BodyArmor Challenges Pepsi’s Stranglehold on the Sports Drink Market

August 14, 2018, 11:17 AM UTC

Coca-Cola is about to become the second-biggest investor in BodyArmor, the sports drink marketed as a healthier alternative to Gatorade and Powerade.

Its acquisition of a minority stake would leave open the possibility of Coca-Cola taking full ownership later, and could give BodyArmor access to Coca-Cola’s distribution network. The move is seen as a bid by Coca-Cola to challenge Pepsi’s stranglehold on the sports drink market. Gatorade, which is owned by Pepsi, currently occupies three-quarters of the market. Coca-Cola’s Powerade has the second-largest market share, and BodyArmor is third.

BodyArmor was launched in 2011 and has enjoyed the backing of athletes, including Kobe Bryant and Andrew Luck, and major players in the drinks industry. It was founded by Mike Repole, who was also behind Glaceau’s vitaminwater and smartwater. Keurig Dr. Pepper was the second-largest investor until Coca-Cola’s buy in. Because it is coconut-water based, includes potassium and vitamins, and doesn’t use high fructose corn syrup or artificial flavors, it is marketed as a healthier alternative to the major sports drinks.

Together, BodyArmor and Coca-Cola could launch a serious challenge to Gatorade, which has long held off competitors. In particular, Coca-Cola’s international distribution infrastructure, especially in China, could help give BodyArmor the competitive edge it needs.

For its part, Gatorade is not taking new challenges lying down. The brand is expected to roll out a slew of new products in the coming months, including a customized sportsdrink.

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