Coca-Cola just bought the 2nd-largest stake in beverage maker BodyArmor to rehydrate its sports-drinks where Powerade failed to quench consumers’ thirst.
As part of the deal, Coca-Cola will distribute BodyArmor (whose 3rd-largest investor is Kobe Bryant) and eventually have an option to buy the whole company outright.
Coca-Cola’s liquid kryptonite
In the clash for Big Cola’s crown, Coca-Cola still reigns supreme. Coke’s market share rose from 17.3% to 17.8% in the last decade, while Pepsi’s has fallen from 10.3% to 8.4%.
But rival PepsiCo has one star player: Gatorade. Gatorade dominates the sports drink industry with a roughly 74.7% share of the $8B dollar market.
Powerade, Coca-Cola’s sorry attempt to replicate the real ’Rade, has just 17.5% market share. Now, Coca-Cola is finally admitting that if Powerade hasn’t posed a threat to Gatorade since its 1988 launch, it never will.
After losing for 30 straight years, Coke is benching Powerade
None of Coca-Cola’s attempts to make Powerade cool worked (remember Powerade Option? Powerade Zero? Neither do we).
But, Coca-Cola scored in 2007 with the $4.1B acquisition of Glaceau (the maker of Vitaminwater and Smartwater).
Now, it hopes that a fast-growing brand like BodyArmor (which nearly doubled its sales last year) will give the company momentum to challenge G-rade and appeal to consumers’ new preference for natural ingredients like coconut water.
The electrolyte whisperer thinks he’s got what it takes
BodyArmor’s co-founder, Mike Repole, happens to be the same mineral mastermind behind Glaceau. Now, Repole is confident he can create another sports-drink sensation.
“Gatorade is Blockbuster Video, and BodyArmor is Netflix,” Repole boasted. “If you don’t evolve, you’re not going to be around much longer.”
Bold words coming from a company that has less than 6% market share compared to Gatorade’s 74.7% — but hey, anything tastes better than Powerade, right?