Breaking: Coca-Cola Set to Acquire Controlling Interest in BodyArmor [Updated]

The Coca-Cola Company has begun the process of acquiring a controlling stake in sports drink brand BodyArmor.

A spokesperson for Coca-Cola confirmed that the company has notified U.S. antitrust regulators of its plans, which was first reported by Beverage Digest. Further details on the timing and terms of the deal were not disclosed.

“We can confirm that The Coca-Cola Company has filed a pre-acquisition notification with the Federal Trade Commission (FTC) relating to its intent to acquire a controlling interest in BodyArmor,” Coke said in a statement shared with BevNET. “In 2018, Coca-Cola became a shareholder in BodyArmor, in a deal that was structured to create value for both companies while also defining a path to ownership in the future. Until closing, both companies will continue to operate independently in accordance with their existing agreement.”

Over the last decade, BodyArmor, named BevNET’s Brand of the Year in 2018, has emerged as the leading challenger brand to sports drinks’ two dominant forces, PepsiCo-owned Gatorade and Powerade. The brand’s profile has been raised through affiliation with athletes like MLB star Mike Trout and the late Kobe Bryant, a growing range of SKUs (including the newly launched BodyArmor Edge with caffeine) and its aggressive positioning as a natural alternative to chief rival Gatorade.

According to data from Nielsen, dollar sales for BodyArmor are up 43.4% year-over-year through February 6, 2021, taking the company past the $1 billion mark. The brand has taken a 13.7% dollar share of the category during that time frame.

In August 2018, Coke, which also owns Powerade, became BodyArmor’s second-largest stakeholder behind co-founder and chairman Mike Repole; the beverage giant also began distributing the brand’s products through its nationwide distribution system. Keurig Dr Pepper, BodyArmor’s previous distribution partner, retains a 12.5% stake in the brand.

If completed, the transaction would consolidate Coca-Cola and PepsiCo’s collective control of the U.S. sports drinks market, which has grown 14.4% year-over-year according to Nielsen. Outside of the two giants, the rest of the category would represent somewhere less than 1% of total dollar share.

Update: In an email statement to BevNET, BodyArmor co-founder and chairman Mike Repole said: “Although Coca-Cola buying a controlling interest in BODYARMOR is a distinct possibility, reports that Coca-Cola is purchasing a controlling interest in BODYARMOR are premature. While this is one scenario for BODYARMOR, there are other potential options for the future of the business.

Our focus continues to be to build BODYARMOR into the #1 brand in active hydration. Our president Brent Hastie, our leadership team, 400+ passionate employees and I remain excited and committed to building this business with the Coca-Cola bottling system for future years to come.”