On Coke Purchase Option, BodyArmor Executive Says Outcome “Will Take Care of Itself”
Company Poised to Surpass $1 Billion in Revenue This Year, Exec Says
Sports drink category challenger BodyArmor has launched the brand’s first caffeinated offering. BodyArmor Edge, available nationwide this week, contains 100-mg of caffeine and 1000-mg of electrolytes in a 20.2-ounce bottle. The caffeine content is equivalent to an 8-oz cup of coffee, BD notes. The drink will go head-to-head with Gatorade’s Bolt24 (PepsiCo), which markets an “Energize” variant with 75-mg of caffeine in a 16.9- oz bottle. Edge addresses the growing demand by athletes for caffeine in everything from Sports drink category challenger BodyArmor has launched the brand’s first caffeinated offering. BodyArmor Edge, available nationwide this week, contains 100-mg of caffeine and 1000-mg of electrolytes in a 20.2-ounce bottle. The caffeine content is equivalent to an 8-oz cup of coffee, BD notes. The drink will go head-to-head with Gatorade’s Bolt24 (PepsiCo), which markets an “Energize” variant with 75-mg of caffeine in a 16.9- oz bottle. Edge addresses the growing demand by athletes for caffeine in everything from hydration beverages to energy chews. “You talk to our athletes, and they want something to give them a bit of a kick before they get on the court or work out,” BodyArmor President Brent Hastie said in an interview. “We took out all the stuff that they don’t want and gave them all the hydration and a little bit of caffeine to get you going.” Caffeine is a growing trend in the broader beverage category as well, with the most notable example being still and sparkling waters infused with the stimulant.
DETAILS. BodyArmor Edge debuts in four flavors: Berry Blitz, Tropical Chaos, Power Punch, and Orange Frenzy. The caffeinated drink is built on the same “core chassis” as BodyArmor’s primary sports drink offering, with some tweaks to formulate around the taste of caffeine, Hastie said. The caffeine level was based on insight from athletes who use the ingredient to enhance performance. The product, which comes in a 20.2-oz single-serve package, includes 180 calories and 44g of sugar. There are no other sweeteners. For now, BodyArmor will focus Edge on the convenience and small store channels, as well as select large format retailers including Kroger, Hastie said. Edge will be merchandised with other sports drinks and sold at a premium price to BodyArmor SuperDrink and lower-calorie BodyArmor Lyte. While the approach is similar to that of Gatorade’s Bolt24 offering, Hastie said Edge is not a response. “I don’t view Bolt24 as a target or even something I spend a lot of time worrying about,” he said. “I see a massive opportunity in continuing to source consumers from Gatorade and across the hydration landscape.” BodyArmor Edge
BRAND PERFORMANCE. In 2020, BodyArmor sports drink sales at US retail grew by +41%, down from +90% in 2019 before pandemic-related lockdowns and economic turmoil. Things may be returning to pre-pandemic levels, however. Hastie said January of this year was the company’s best month ever, with revenue growth of more than +80%. Annual combined retail sales of BodyArmor’s sports drinks and SportWater surpassed $1 billion as of late last year, he said. And for the 52-weeks ending Jan. 25, BodyArmor’s sports drink sales alone surpassed $1 billion at retail. So far this year, retail sales for BodyArmor sports drinks through Jan. 25 have for the first time surpassed those of No. 2 Powerade (owned by BodyArmor investor and distributor Coca-Cola), Hastie said. He expects BodyArmor retail sales to pass Powerade on a 52-week basis sometime this year. “We’ll be the largest non-carb brand on Coke trucks,” he said. Hastie expects BodyArmor’s combined sports drink and water business to exceed $1 billion in annual company revenue during 2021. BodyArmor has generated significant incremental sales from consumers coming back into the sports drink category or entering it for the first time, Hastie said, while noting a “massive” increase in shelf space across the retail landscape.
OPTION TO BUY. The biggest question for BodyArmor now is whether minority investor Coca-Cola will exercise an option this year to buy the rest of the company, especially as Coke recovers from pandemic-related disruption globally. “Our No. 1 focus is building BodyArmor into a $1 billion revenue business this year,” Hastie said when asked about the option and any signals from Coke. “Our team’s focus is 100% on that and what happens with the Coca-Cola Company will take care of itself over time.” Coca-Cola is BodyArmor’s primary US distributor. BodyArmor’s prior distributor, Keurig Dr Pepper, still holds 12.5% of the company. Coke’s stake is larger, but the companies haven’t disclosed the exact size. The late Kobe Bryant’s estate holds 10% of BodyArmor, according to media reports. Founder Mike Repole is said to be the largest shareholder. BD also asked Hastie whether BodyArmor’s management team would be retained in the event of a buyout by Coke. “That’s a great question to ask Coke and the bottlers,” he said. “We have built a world class team here and we’re very excited for the potential for this business this year and beyond.
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