The heat is on against Coca-Cola and PepsiCo.
Coca-Cola has announced that it is buying a minority stake in a sports drink brand backed by basketball star Kobe Bryant. The move helps it have a stronger challenger to Pepsico’s Gatorade.
“Proud of our team at @DrinkBODYARMOR and our new partnership with the @CocaColaCo who believes in our mission of becoming the #1 Global Sports Drink. Thanks @Gatorade, we’ll take it from here,” said Kobe Bryant said on Twitter.
With the investment, Coca-Cola will be the second largest shareholder of the BodyArmor brand. Dr Pepper Snapple is also backing BodyArmor and made a $20 million investment back in 2015 and then increased its ownership to 15.5% in 2016. Coca-Cola has not disclosed how big an investment it has made nor any financial details.
Bryant first invested into the brand in 2013, two years after it had launched. The former Lakers player is the third biggest shareholder. Baseball player Mike Trout and NBA Star James Harden are also endorsing the brand.
Bryant wrote, directed and narrated Body Armor’s first-ever television ad, which debuted last April.
“I enjoy storytelling and have always taken an active role in my campaigns throughout my career,” Bryant told FOX Business last year. “As an investor in BodyArmor, this is additional value I bring to the brand. I’m able to provide a creative voice – as an athlete – to give the product an authentic and credible voice. As a storyteller, I most enjoy finding that one point of differentiation and finding a unique way to get people to understand the message.”
“(BodyArmor) is a positive for Coca-Cola, which is continuing to pursue its product portfolio diversification strategy,” remarked RBC Capital Markets analyst Nik Modi.
Wells Fargo analyst Bonnie Herzog has said, “We have learned that BodyArmor has notified Keurig Dr Pepper that they are terminating their existing distribution agreement. Although the timing and mechanism by which distribution will transition over to Coca-Cola’s bottling system is still uncertain.”
“We would not be surprised if Coca-Cola eventually acquires the remainder of BodyArmor,” Herzog said.
It was last month that PepsiCo revealed that Gatorade was seeing higher demand after it launched versions that are zero-sugar.
Body Armor has a line of low-calorie drinks that use natural sweeteners, natural flavors and coconut water
Body Armor will continue to operate as its own brand and Coca Cola may acquire more shares in the future.