Coca-Cola bets on Kobe's sports drink to win where Powerade has lost

Kobe Bryant

On Tuesday, Coca-Cola announced it had purchased a minority stake in the drink.

Coca-Cola just bought the 2nd-largest stake in beverage maker BodyArmor to rehydrate its sports-drinks where Powerade failed to quench consumers' thirst.

Coke last month posted sales and profit that beat analysts' estimates, with a rebranding of Diet Coke and a boost for Coca-Cola Zero Sugar lifting results.

The drink, which was co-founded by Mike Repole who also co-founded smartwater and vitaminwater, is marketed as "natural" and "healthy," which has made it a Gatorade competitor.

For its part, Gatorade is not taking new challenges lying down.

In 2015, Dr Pepper Snapple Group (DPS), now KDP, paid $20 million to acquire an 11.7 percent stake in BodyArmor at a $170 million valuation.


"We have learned that BodyArmor has notified Keurig Dr Pepper that they are terminating their existing distribution agreement", she said. "Although the timing and mechanism by which distribution will transition over to Coca-Cola's bottling system is still uncertain".

A BodyArmor representative did not immediately respond to FOX Business' request for comment on the report.

The joint press release emphasized that BodyArmor contains no artificial colors or flavors and that a diet version of the drink is naturally sweetened.

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.

Coca-Cola, however, has historically stayed away from full-blown acquisitions, settling instead for acquiring partial stakes in companies - a strategy that allows it to test-drive potentially risky bets.

"We would not be surprised if Coca-Cola eventually acquires the remainder of BodyArmor", Wells Fargo's Herzog said.

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