Coca-Cola bought out Bodyarmor for $5.6B — its largest brand deal — to chase Gatorade
Coke bought the remaining 85% of sports drink Bodyarmor for $5.6B, topping its $5.1B Costa purchase, after taking a 15% stake in 2018.
What was changed
On 1 November 2021 Coca-Cola bought full control of sports drink maker Bodyarmor for $5.6 billion — the largest brand acquisition in its history, ahead of the $5.1 billion Costa Coffee purchase in 2018. Coke had bought a 15% stake in 2018, becoming Bodyarmor's second-largest shareholder; Kobe Bryant, who invested in 2013 two years after the brand's founding, was the third-largest, and his estate receives roughly $400 million from the sale, according to the Wall Street Journal.
The logic was category position. PepsiCo's Gatorade led US sports drinks with roughly 70% market share; Bodyarmor, marketed as a healthier option, had surpassed Coke's own Powerade to become the number two. Co-founder Mike Repole — who also founded Vitaminwater, Smartwater and Energy Brands, all now Coke properties — will collaborate on Coke's still beverages portfolio, and he and Bodyarmor president Brent Hastie stay on for the quest to overtake Gatorade.
The buyout extends Quincey's post-pandemic portfolio overhaul, which has killed slow sellers such as Coca-Cola Plus Energy in North America while widening the beverage array. Analysts saw upside: Credit Suisse's Kaumil Gajrawala called the acquisition positive, citing Bodyarmor's brand equity and Coke's potential to distribute it globally, as it does for Monster.
Why it worked
Coke's own Powerade had been overtaken by Bodyarmor, leaving Coke behind in its home sports-drink category.
Gatorade's roughly 70% share was out of reach organically; Bodyarmor was the credible challenger left.
The 2018 minority stake gave Coke an insider's view of the brand before committing $5.6B.
Coke's global distribution can scale Bodyarmor the way it scaled Monster, per Credit Suisse.
What can be applied
If your own brand cannot close the gap, buy the challenger that already passed it — a staged minority stake lowers the risk of paying full price for control.
Aftermath
Repole immediately lobbied for a board seat — 'I wasn't afraid to ask,' he told CNBC — and read his consulting mandate as a sign Coke 'wants to do things differently' on marketing, packaging and innovation. Consumer Edge Research's Brett Cooper wrote that Repole's impact would be hard to quantify but more likely positive than negative given his track record. Coke shares were up 2% in 2021, a market value of $242 billion.