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FRONT PAGE
Just Poured
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Coca-Cola is taking a minority ownership stake in BODYARMOR, a fast-growing line of premium sports performance and hydration beverages, the companies announced today.
Through this strategic relationship, BODYARMOR will remain an independent company and gain access to the expansive Coca-Cola bottling and distribution system.
The initial investment, which will be part of the Coca-Cola North America Venturing & Emerging Brands (VEB) investment portfolio, is structured to create value for both companies and allow Coca-Cola to increase its ownership stake over time. BODYARMOR will continue to operate independently under the leadership of Co-Founder and Chairman Mike Repole and his management team.
Repole has had success co-founding and incubating other brands including smartwater and vitaminwater, which joined the Coca-Cola portfolio in 2007 and have since become billion-dollar brands with global availability.
We caught up with Repole and Coca-Cola North America President Jim Dinkins to learn more about this new relationship.
Jim, it takes a lot of belief and confidence to make an investment in a startup brand. Why is this the right deal for your business now?
JD: James Quincey set a bold business vision for us called “Beverages for Life,” which means that we aspire to give consumers the brands they want, when and how they want them. If you look at the total hydration category, it’s growing at about 6% annually in a big, $20 billion business. And BODYARMOR is well positioned to succeed in that category. It’s the sixth-fastest-growing trademark in retail value in the entire nonalcoholic ready-to-drink (NARTD) beverage industry this year and has posted 100% CAGR growth over the last four years. So we see it as a great addition to our bottlers’ portfolio.
Why not just buy 100% of the brand now?
JD: Consistent with our strategy of incubating bolt-on M&A deals, we believe taking an initial minority stake today, with a clear path to ownership, will allow BODYARMOR to continue to grow the business in a sustainable manner while maintaining the brand’s leadership and edge that have made it so successful.
How will BODYARMOR play alongside your existing hydration portfolio, notably POWERADE?
JD: BODYARMOR competes in the expansive and fast-growing sports performance and premium hydration categories that are much larger than sports drinks. This is where the BODYARMOR brand has been growing exponentially. The Coke North America hydration portfolio – POWERADE, vitaminwater, smartwater and DASANI – will continue to be priorities to our system and have important roles in our overall hydration strategy. There are a growing number of consumer occasions in the hydration category, and we see each of these brands playing a unique role in meeting specific consumer needs in our bottlers’ total portfolio.
The Coca-Cola Company and Mike have a longstanding relationship dating back to the company’s 2007 acquisition of glacéau vitaminwater and smartwater. How did learnings from that deal influence this one?
JD: We were really excited to work with Mike in 2007, and we’re thrilled to be working with him again. That was a unique day and time, and it was a full acquisition on day one. Since then, vitaminwater and smartwater have become global billion-dollar brands. And we believe what we’ve learned through our experiences with VEB has become a competitive advantage as we structure investment deals like this one.
What do you admire about Mike as an entrepreneur, and why did you choose to invest with him again?
JD: Mike and his team have a unique capability to understand consumer needs and develop breakthrough products that meet these needs, and also to create commercial strategies to grow these brands in the marketplace. We’re really excited about working with them and having BODYARMOR part of our bottlers' expanding beverage portfolio.
Mike, you’ve built the BODYARMOR brand via distribution deals with several companies. Why make this move to the Coca-Cola system, and why now?
MR: In 2011, we set out to create a better-for-you sports drink. We built partnerships with many distributors, large and small, over the years. As the years have gone by and the brand is on track to reach almost $400 million in retail sales this year, we now see the Coke system as the best opportunity not only to grow this brand in the U.S., but also internationally.
You’ve been growing this brand at a fast clip. What opportunities does this relationship present for continued growth?
MR: We think this relationship will give us tremendous opportunity through the newly refranchised system of Coca-Cola bottlers – some I haven’t dealt with since 2007 and many who are new – to bring the brand to channels and retailers we haven’t been able to touch so far. And not just nationally but globally. We’re excited to partner with The Coca-Cola Company’s bottling system and leverage their amazing capabilities to launch the brand.
What keeps you up at night as you think about continuing to grow this brand in an era where tastes and trends change so quickly?
MR: The only thing that keeps me up at night is being able to produce enough product to meet consumer demand. There was demand for a product that didn’t exist, and BODYARMOR met that demand. We created a brand in a category that didn’t exist, and we continue to innovate. We’ve been able to stay ahead of consumer trends. We’ve grown over 100% CAGR over the last few years, over a very big base, and we expect to accelerate this growth through our relationship with the expansive Coca-Cola bottling system.
Where do you see the BODYARMOR brand in five years?
MR: Hopefully continuing 100% growth year over year and getting a bigger share of not just the sports drink category but also water and other categories we may play in. We want to become a global brand... we want to be wherever athletes are in need of hydration.
You’ve had the opportunity to work in and lead high-growth businesses. Coca-Cola North America is focused on building an entrepreneurial, growth-oriented culture and breaking down barriers. What does having a 'growth mindset' mean to you?
MR: A mantra my company hears me say every day is “Think big. Dream bigger.” Six years ago, we started this brand focused on the consumer first and developed a better-for-you sports drink that didn’t exist. We built demand for the brand. We got BODYARMOR to retail, and it started to sell.
I’m so impressed with where The Coca-Cola Company is today. I’ve had the opportunity to hear about James Quincey’s vision and spend time with VEB and Jim Dinkins over the last few months. I’m impressed with Jim’s leadership and vision for Coca-Cola North America. There’s a different mindset now. Coke is more equipped than ever before, and the biggest thing for us is finding a way to win together. This is a great opportunity for both companies. It’s surreal for me right now… it’s going from surreal to real. And it’s exciting.
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SUBMIT NOW!
SUBMIT NOW!
What makes an everyday moment a 'Coca-Cola Moment'? Submit your best pics and show us!
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IN THE NEWS
Strong Operating Results for Q3 2018
Organic revenues grew 6% in the quarter
Read the Press Release
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The Power of Food: Operation BBQ Relief Feeds Front-line Heroes in Times of Need
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Coca-Cola Toasts 60 Years of Dreamland Bar-B-Que -
Americans Spill the Beans About What Makes Them Feel Good in Summertime McCafé Survey
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The Varsity at 90: Coke’s North Avenue Neighbor Marks a Milestone
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Sprite Empowers Young Voices With ‘Get Vocal’ Platform
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25 Years After ‘Philadelphia’:
Coca-Cola and (RED)® Release Featurette Charting Progress Made in Fight Against HIV/AIDS -
Flavors that Thrill: Fanta Scares Up Halloween Fun With Spooky Packaging and More
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Desigual and
Coca-Cola Launch Capsule Collection
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‘I’m Not Just Looking Back… I’m Looking Ahead’: New
Coca-Cola Archivist Justine Fletcher Says Company’s Rich History Informs Its Future -
Sprite Empowers Young Voices With ‘Get Vocal’ Platform
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25 Years After ‘Philadelphia’:
Coca-Cola and (RED)® Release Featurette Charting Progress Made in Fight Against HIV/AIDS -
Coca-Cola Tips Cap to Boston Red Sox World Series Win With Commemorative Can
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Coke's One Young World Delegates Ready to Make Their Mark
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Army Inspector General Talks Leadership and More Ahead of Veterans Day Event at
Coca-Cola -
Gallery: 8 Veterans Share Their Service With
Coca-Cola -
Wheels of Happiness: Coke’s Enzo Piscopo Creates Foundation to Help People With Mobility Disabilities in the Underdeveloped World
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‘I’m Not Just Looking Back… I’m Looking Ahead’: New
Coca-Cola Archivist Justine Fletcher Says Company’s Rich History Informs Its Future -
Sprite Empowers Young Voices With ‘Get Vocal’ Platform
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Coca-Cola Tips Cap to Boston Red Sox World Series Win With Commemorative Can -
Big Moves in M&A: Our Perspective on a Busy Time for Deals
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How
Coca-Cola is Growing and Thriving Together With Communities -
Coke's One Young World Delegates Ready to Make Their Mark
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Why Sustainability is Always at the Heart of Our Business
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25 Years After ‘Philadelphia’:
Coca-Cola and (RED)® Release Featurette Charting Progress Made in Fight Against HIV/AIDS
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Coca-Cola Tips Cap to Boston Red Sox World Series Win With Commemorative Can -
Team Bottles,
Coca-Cola Tailgating Supplies Score With College Football Fans -
Olympic Skier Gus Kenworthy On Coming Out as a Public Figure
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DASANI Sparkling Tees Off First-Ever Sports Partnership with PGA TOUR
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‘I’m Not Just Looking Back… I’m Looking Ahead’: New
Coca-Cola Archivist Justine Fletcher Says Company’s Rich History Informs Its Future -
Big Moves in M&A: Our Perspective on a Busy Time for Deals
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Muhtar Kent Talks Sustainable Innovation, Accepts Transformational Leadership Award at University of Vermont
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What’s New and What’s Next in Convenience Retail:
Coca-Cola Shares Innovation Story at NACS Show
COCA-COLA ON SOCIAL